Gaskell & Gaskell v Woodall - [2013] SADC 11

District Court of South Australia
(Civil)
GASKELL & GASKELL v WOODALL
[2013] SADC 11
Reasons for Decision of His Honour Judge Beazley (ex tempore)
5 February 2013
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT - DAMAGES - OTHER MATTERS
Building contract - claim by plaintiffs against the defendant builder for defective workmanship - the defendant in breach of contract - the plaintiffs sought order for summary judgment pursuant to 6 DCR 232 - defendant intimates that he did not seek that the plaintiffs call evidence as to quantum from quantity surveyor - he did not wish to cross examine any witness or call evidence in his defence - no material dispute of fact - whether test to be applied is one of "demonstrated certainty of outcome" - or alternatively "no reasonable prospect of defence" - whether the plaintiffs ought receive judgment by default pursuant to 6 DCR 234 as an alternative - the defendant had no defence to the plaintiffs' claim.
Held: The plaintiffs entitled to summary judgment for their claim in the sum of $354,570 together with interest at 8% per annum on that part of their claim namely $16,870 already paid by them. The total interest awarded is in the sum of $8,097.60. Judgment is awarded to the plaintiffs against the defendant in the sum of $362,667.60 inclusive of interest. The defendant must pay the plaintiffs' costs of action on a party/party basis.
Building Work Contractors Act 1995 (SA) s32; 6 DCR 232 and 6 DCR 234, referred to.
Foots v Sth Cross Mine Management Pty Ltd [2007] HCA 56; Estate of Bradman v Allens Arthur Robinson [2010] SASC 71; Davies v Minister for Urban Development and Planning [2011] SASC 87; Spencer v Commonwalth (2010) 241 CLR 118; Ceneavenue Pty Ltd v Martin (2008) 106 SASR 1; Mittiga v Community Corporation [2012] SASC 202; CBFC Ltd v Charitopolous [2009] SASC 30; Krysiak v McDonagh [2012] WASC 270; Edwards v Petterson (1987) 47 SASR 63, considered.

GASKELL & GASKELL v WOODALL
[2013] SADC 11
Introduction

This action arises out of the construction of a double storey residence on land situated at Tailem Bend, being the land comprised in Certificate of Title Register Book Volume 5719 Folio 589 (“the said land”).
In 2002 and 2004 Peter and Kerry Gaskell, (the plaintiffs) as owners of the said land entered into certain agreements with Terry Woodall, (the defendant), a licensed builder, initially for the provisions of landscape works, and subsequently for the construction of the subject dwelling on the said land.
The plaintiffs claim against the defendant is for damages for breach of a written contract dated 20 August 2004 and/or for negligence by the defendant in the construction of the subject dwelling.
Background
I set out the following background facts. None of the following facts were in dispute.
In or about October 2002, the plaintiffs had engaged an engineering group, TMK & Associates Pty Ltd, trading as TMK Consulting Engineers, (TMK), to provide a footings report and structural specifications for the construction of the subject dwelling. The TMK report was provided by the plaintiffs to the defendant to enable him to undertake the building work. The TMK report provided, inter alia, for the insertion of four drop piers in the footing plan.
It also specified a vertical steel reinforcement design with respect to the rear retaining wall. It specified the use of N24 diameter bars. Vertical bars were designed to be installed in each core of the brickwork. Each such core was to be filled with concrete as added reinforcement.
On or about 20 August 2004, the plaintiffs and the defendant entered into a written (HIA) type building contract agreement for the work to commence on 1 September 2004 and be completed on 30 November 2004. Amongst other terms in the written contract, clause 15.3 thereof, obliged the defendant to build the footings and retaining wall in accordance with the specifications in the TMK report.
The defendant commenced the building work on time. He charged an hourly rate of $70. Between 15 April 2004 and 2 May 2005, he rendered an invoice to the plaintiffs totalling the sum of $116,061.38. He has been paid in full for that work.
The defendant did not inform either TMK or the relevant officers of the Coorong District Council that the concrete would be poured. Accordingly neither attended the site. TMK was therefore not in a position to provide the Council with a Certificate of Inspection of the footings, nor a Certificate of Structural Adequacy. The defendant did not provide any Statement of Completion to the Council, and no Certificate of Occupancy was issued by the Council.
Within a relatively short time, the rear external concreted area had substantially subsided causing moisture to flow to the rear of the subject dwelling. An inspection by Council officers in February 2007 disclosed a series of failures. In addition to the deflection of the concrete slab, it was observed that a substantial part of the external wall and floor trusses were left without adequate support.
A non destructive inspection of the works disclosed that the defendant had failed to insert the drop piers which had been specified by TMK. It was assumed that the failure to insert those drop piers was the sole cause of the concrete slab movement.
At that time there had been no more detailed investigation undertaken to determine whether the defendant had failed to implement the other specifications in the TMK report.
In February and March 2007, the Coorong District Council requested the plaintiffs and the defendant to rectify the damaged dwelling. The defendant had undertaken to rectify what he assumed was the damage caused by his failure to insert the drop piers.
From time to time the defendant sought and was granted extensions of time to undertake the remedial work. He submitted a claim form to his insurer and received a payment.
In consequence of the delays, the Council, on 4 May 2007, issued an enforcement notice to the plaintiffs pursuant to s 84 of the Development Act, 1993, obliging them to rectify the damage. The defendant neither undertook the work nor contributed to the cost of that work. He paid nothing to the plaintiffs from the insurance monies he had received.
The plaintiffs were obliged to engage another contractor, Top Property Maintenance, to demolish the concrete slab, and a portion of the steps at the southern end of the house; excavate for and insert additional drop piers and, inter alia, jack up the existing concrete footing to its original position. The plaintiffs paid that builder the total sum of $35,340 in 2007 for that rectification work. There is no dispute as to the reasonable cost of and the necessity for that rectification work.
The 2007 rectification work had stabilised the dwelling for a period. By April 2009 it became clear that there was a lack of adequate support in the retaining wall, which had not been part of the rectification work. The bowing of the concrete block work had distorted and moved the wall framing. This had caused bowing of the plasterboard and cement fibre board wall linings. It required substantial rectification of many of the rooms in the subject dwelling as detailed in an expert report of the Building Consultant Mr Chris Short following an inspection on 3 April 2009.
On 9 July 2009 the plaintiffs commenced proceedings against the defendant for breach of contract, and also against TMK. As against the latter, given the then state of their investigations, the plaintiffs had asserted that the vertical steel reinforcement recommended by TMK must not have been adequate to prevent the bowing. At that time the plaintiff had not been able to determine whether in fact the defendant had erected the retaining wall in accordance with the vertical steel reinforcement design in the report.
By about June 2011 it became apparent, following further investigations, that none of the significant specifications, namely the vertical steel reinforcement specified by TMK; the filling with concrete of every core as specified by TMK; the reinforcing bars as specified by TMK in accordance with AS 3600 – 2001 Concrete Structure Code; and the provision of the drop piers as specified by TMK, had been implemented by the defendant.
Following the receipt of expert building advice, the plaintiffs determined that had the specifications by TMK been complied with, the damage would not have occurred. Accordingly the plaintiffs discontinued the within proceedings against TMK.
The proceedings
The subject proceedings have had a vexed history. Following the said June 2011 investigations, the plaintiffs amended their pleadings, asserting that the damage to the subject dwelling was caused by the defendant’s failure to implement the above specifications in the TMK report.
The plaintiffs obtained and served expert reports from the Building Consultant Chris Short dated 27 April 2009; the Consulting Engineer Richard Liney dated respectively 15 November 2010; 22 June 2011, and July 2011; and the Quantity Surveyor Allen Stanley dated 1 November 2011.
The defendant was represented by Solicitors until about two weeks before the trial. The trial date for 4 February 2013 had been fixed on 24 April 2012. No reports of an expert nature had been obtained by the defendant in answer to the reports provided by the plaintiffs. I do not propose to set out the defendant’s defence in any detail. For the reasons which will become clear there is no basis for any defence by the defendant. Indeed the defendant in his defence had, to a large extent, admitted the relevant facts giving rise to liability for the plaintiffs’ claims, while asserting that “others” had also contributed to the damage.
The Trial
The within action was listed for trial with an estimate of some 10 days. The plaintiffs were represented by solicitors, and by Counsel, Mr Adams. The defendant appeared in person.
At the hearing, as is clear from the transcript, I used my best endeavours to take the defendant through the matters which would be dealt with at the trial. I informed him, in particular, that the trial was estimated to take some 10 days with the costs associated with such a long trial.
I invited him to tell me early in the piece as to whether in fact he disputed any of the matters which were set out in the expert reports. I intimated to him that if in fact there was a dispute about any of the plaintiffs’ claims, then my present inclination was to hear the trial in full. Accordingly all the witnesses including the expert witnesses would be called by the plaintiffs, and he would be able to cross-examine them.
He made it patently clear that he did not intend to do so, and that he did not wish to delay the proceedings. In any event I encouraged him to remain in court while these matters were discussed, and to answer the plaintiffs’ application for summary judgment.
The defendant intimated that he did not intend to cross-examine any of the plaintiffs’ witnesses. He suggested on various occasions that he may ‘simply become bankrupt’. I took that to mean that he may, after taking advice, present his own petition in that respect. It is of course trite that upon a defendant’s bankruptcy, the subject proceedings would become stayed pursuant to s 58(3) of the Bankruptcy Act 1966 (Cwth). It would then fall to the plaintiffs to obtain leave to proceed from either the Federal Court of Australia or the Federal Magistrates Court. The question as to what constitutes a provable debt in bankruptcy was recently affirmed by the High Court of Australia in Foots v Southern Cross Mine Management Pty Ltd.[1]
[1] [2007] HCA 56
Application for Summary Judgment
In opening, Mr Adams brought to my attention that an application had been filed by the plaintiffs and served upon the defendant seeking summary judgment against the defendant pursuant to 6DCR 232 of the Rules of Court. On behalf of the plaintiffs, he sought to argue that application. The defendant, at least initially, elected to remain in Court to hear the plaintiffs’ application.
The principles of law
6 DCR 232 provides as follows:
Part 4 – Summary judgment
232 – Summary judgment
(1) The Court may, on application by a party, give summary judgment for that party.
(2) Summary judgment may only be given if the Court is satisfied that –
(a) if the applicant is a plaintiff – there is no reasonable basis for defending the applicant’s claim; or
(b) if the applicant is a defendant – there is no reasonable basis for the claim against the applicant.
I explained to the defendant the nature of that application.
It is most unusual for a Court to entertain an application for Summary Judgment at the opening of a trial. Mr Adams submitted that the application, if successful, would dispose of all of the plaintiffs’ claims.
As can be seen, 6 DCR 232 is in a substantially different form to that contained in Rule 25 of the former Rules of the Court.
The power to grant Summary Judgment contained in 6 DCR 232, above, has been the subject of recent authority. Those authorities were set out at length by Bleby J in Davies v Minister for Urban Development and Planning.[2] In his reasons for decision, his Honour pointed to, what he described, as a significant distinction between the test employed by the Full Court of the Supreme Court in Ceneavenue Pty Ltd v Martin,[3] and that subsequently employed by the plurality of the High Court in Spencer v Commonwealth.[4]
[2] [2011] SASC 87
[3] [2008] 106 SASR 1
[4] (2010) 241 CLR 118
In the Ceneavenue case, subsequently applied by a single judge in Mittiga v Community Corporation,[5] Debelle J described the test as:
The expression “no real question to be tried” connotes such factors as whether the defendant really has a bona fide defence, and that the defendant does not have an arguable defence which ought to be fairly tried. The defendant must show that he is not wasting the court’s time or abusing the court’s procedures to delay or defeat a just claim by the plaintiff. In this context, the word “real” is intended to distinguish a bona fide defence from one that is fanciful or spurious or an abuse of process seeking to delay and defeat the plaintiff’s just claim. The onus of satisfying the court that the application should be granted lies on the applicant. When considering whether that onus has been discharged, the court will look to the cogency of the defence as raised by the defendant.
[5] (2012) SASC 202
In Mittiga’s case, supra, Stanley J described that test as one of “demonstrated certainty of outcome”.
In the Estate of Late Sir Donald Bradman v Allens Arthur Robinson,[6] the Full Court considered an order for Summary Judgment which had centred upon the application of the Limitations of Action Act, 1936. The court, by a majority, concluded that, despite the narrow confines of the issue to be determined, an order for Summary Judgment ought not to have been granted because ‘subtle factual and evidential considerations were likely to emerge at trial and be the subject of oral testimony, properly to be tested by cross-examination’.
[6] (2010) 107 SASR 1
In Spencer v Commonwealth,[7] the plurality noted the difference between the equivalent of 6 DCR 232 and the former Rule 25 of the former Rules of Court. In their reasons, indicating a somewhat lesser test, the plurality said as follows:
First, the central idea about which the provisions pivot is “no reasonable prospect” (emphasis added). The choice of the word “reasonable” is important. If s 31A is to be seen as deriving from r 24.2 of the Civil Procedure Rules 1998 of England and Wales, its provisions underwent an important change in the course of their translation from that jurisdiction to this. The English rule speaks of “no real prospect”; s 31A speak of “no reasonable prospect”. The two phrases convey very different meanings.
Secondly, effect must be given to the negative admonition in subs (3) that a defence, a proceeding, or a part of a proceeding may be found to have no reasonable prospect of successful prosecution even if it cannot be said that it is “hopeless” or “bound to fail”. It will be necessary to examine further the notion of “no reasonable prospect”. But before undertaking that task, it is important to begin by recognising that the combined effect of subs (2) and (3) is that the inquiry required in this case is whether there is a “reasonable” prospect of prosecuting the proceeding, not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
…
Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.
Likewise, it is dangerous to apply directly what has been said in the United Kingdom about the application of a test of “no real prospect” or what has been said in United States decisions about summary judgment …
How then should the expression “no reasonable prospect” be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is “no reasonable prospect”. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like “no reasonable prospect” is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes, as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt.
[7] (2010) 241 CLR 118 at 139-141
Some discretionary matters
For the reasons which will become clear I do not need to resolve any suggested dispute as to the test under 6 DCR 232. On any view the result, on the facts of this case will be the same. In my opinion the plaintiffs have satisfied the more stringent test of “demonstrated certainty of outcome”.
It is trite that the onus is upon the plaintiffs to show an entitlement to the relief which they seek. The court retains a discretion to refuse the relief, and require the matter to proceed to trial.
I accept that great care must be exercised before granting Summary Judgment. It is clear that ‘the interests of justice are not to be sacrificed to efficiency and expedition’. In particular there must be a proper basis for the grant of such relief. It is not relevant at all to that exercise that the defendant has intimated a possibility that he will seek to petition for his bankruptcy.
I make it clear that I have not taken that last matter into account at all. Indeed I assume that if he were to take that course the plaintiffs would seek leave of the respective courts of Federal jurisdiction to proceed. In any event the defendant remained in Court to hear the plaintiffs’ application.
Before proceeding to hear the application for summary judgment, I considered whether in the exercise of my discretion, I ought treat the conduct of the defendant, namely that of taking no active part in the proceedings before finally excusing himself from the courtroom, as, in effect, an entitlement to judgment by default of attendance with damages to be assessed pursuant to 6 DCR 234,[8] rather than for summary judgment.
[8] See CBFC Ltd v Charitopoulos (2009) SASC 30; and Krysiak v McDonagh [2012] WASC 270; Edwards v Petterson (1987) 47 SASR 63

In my opinion it was appropriate to proceed to hear the application for Summary Judgment. The action related to events in 2004. Admissions had been made by the defendant in his defence. He had intimated that he did not wish to test any of the evidence of the plaintiffs. He had attended Court for the hearing.
The hearing of the application for Summary Judgment
I informed the defendant that I would hear the application by the plaintiffs. He elected to remain during the argument by the plaintiffs’ counsel. The plaintiffs were given leave to tender, for the purpose of the argument:
·An affidavit sworn by Royce Densley on 23 November 2011. Mr Densley was an apprentice at the relevant time engaged by the defendant. He deposed to the work undertaken by the defendant personally on the subject retaining wall. He deposed to the concerns that he had expressed to the defendant as to the rear section of the upstairs portion of the home caving in.
·An affidavit of William Maurice Dunn sworn on 23 November 2011. Mr Dunn deposed to complaining to the defendant, at the time of the concrete pour, that the compaction was inadequate.
·An affidavit of Erika Irene Salna sworn on 21 March 2012. Ms Salna, a Solicitor, deposed to various unsuccessful attempts to obtain details from the defendant’s solicitor as to the nature of any defence, and production of any expert reports they may have on behalf of the defendant.
·A subsequent affidavit of Erika Irene Salna sworn on 30 January 2013 to which was annexed the various expert reports of the plaintiffs, the written contract between the plaintiffs and the defendant and a bundle of other relevant and admissible documents.
I explained to the defendant that although he had not filed any affidavits in response to the application I would permit him to give evidence in response. It must be said that none of the plaintiffs’ documents were in dispute. Indeed I repeat that the defendant did not challenge any of the plaintiffs’ submissions. He expressly disavowed his right to cross-examine any witness. He confirmed that he saw no point in calling, or giving any evidence. He had engaged no experts to provide any answering reports.
I invited him to comment in respect of each matter raised by the plaintiffs. He declined to do so, save for commenting that ‘he thought that others were also at fault’. At the conclusion of the argument the defendant elected to leave the courtroom.
Brief Summary of Findings
·There can be no doubt, in consequence of his admissions in his defence, that the defendant admits that he and the plaintiff had entered into a written building contract by at least 20 August 2004, the terms of which, obliged the defendant to construct the dwelling in accordance with the October 2002 TMK Footings and Structural Report. The said contract contained the implied terms in s 32 of the Building Work Contractors Act, 1995.
·The defendant failed to so construct the said dwelling in accordance with the TMK report, in consequence of which the footings and retaining wall had both failed as set out in the unchallenged evidence of the experts contained in their respective reports being Exhibit E15-19 annexed to the affidavit of Ms Salna sworn on 30 January 2013.
·The failure of the defendant to install the drop piers was admitted by him in his Defence.[9] He did not deny his failure to implement the vertical reinforcement system specified in the TMK report. This could not be in dispute.
·There can simply be no doubt that the failures identified in the expert reports, were the cause of the instability in the footings, the bowing of the retaining wall and the damage to the dwelling detailed in those reports. The only complaint by the defendant was that he should have been given a credit of $17,500 for the cost of the drop piers which had not been inserted by him.[10] The plaintiffs have, with a denial of liability, agreed to give credit to the defendant for that sum of $17,500.
·I am satisfied, particularly from the reports of Mr Short and Mr Liney that firstly, there has been a breach of contract by the defendant, in consequence of his failure to insert the drop piers; to properly erect the retaining wall; and his general failure to comply with the requirements of the TMK report.
·I accept as an inevitable finding that these breaches by the defendant were causative of the losses suffered by the plaintiffs. In this case I have no doubt that they were the sole cause of the damage to the subject dwelling. It is clear that the damage was caused by the failure to properly buttress the retaining wall together with the failure to install the drop piers.
·As to the cost of rectification, the plaintiffs relied upon the unchallenged evidence contained in the expert report of the Quantity Surveyor Allen Stanley being that in Exhibit E15-19 to the affidavit of Ms Salna sworn on 30 January 2013.
·I had invited the defendant to explain whether he disputed the estimates given by Mr Stanley. I was conscious that at a trial the issue of the costs of rectification could raise some ‘subtle issues’. In particular such issues might involve the questions as to whether the costs were reasonable, in light of the reasons of the High Court of Australia in Bellgrove v Eldridge,[11] and whether the proposed rectification work is a reasonable course to adopt in the circumstances.
·It does not however matter whether the plaintiffs have or even will undertake the proposed rectification work.[12]
·The defendant expressly disavowed any request that the Quantity Surveyor Mr Stanley should be called at either a trial or on the subject application to be cross-examined. He did not wish to challenge that evidence at all.
[9] Second Defence (23/2/11) paragraph 17
[10] Second Defence paragraph 45A
[11] (1954) 90 CLR 613
[12] See Unique Building Pty Ltd v Brown (2010) SASC 106
Discussion
This is a most unusual set of circumstances. In the ordinary course of events I may have exercised my discretion to require the action to proceed to trial, at least in respect of the question of the costs of rectification because of the subtle issues that may, in the ordinary course, have been raised at a trial.
In the subject case however the defendant has unequivocally declared that he did not wish that any witness to be called. He did not wish to challenge any witness at a trial.
In my opinion it would be an inappropriate exercise of the discretion to refuse relief to the plaintiffs and oblige them to call the expert evidence as to the reasonable course to undertake in rectifying the premises, and the reasonable cost of doing so.
There was no other evidence to challenge the relevant expert reports of the plaintiffs. I find that the plaintiffs have satisfied the more stringent test of “demonstrated certainty of outcome”. Accordingly I find that it is an appropriate course to proceed to Summary judgment pursuant to 6 DCR 232.
Conclusion
I have found that the defendant has breached the terms of his contract with the plaintiffs dated 20 August 2004. I have found that the said breaches are causative of the plaintiffs’ losses as claimed. I find that the work specified by the expert witnesses in respect of rectification are necessary and reasonable. I find that the costs of that work as detailed in the report of Mr Stanley are reasonable. The plaintiffs are entitled to the following:
·The reimbursement of the sum of $34,340 paid by them for the rectification work undertaken by Top Property Maintenance in 2007. They have very properly given a credit to the defendant in the sum of $17,500 as pleaded by him in his defence – leaving a balance of $16,870.
·It is clear that the plaintiffs are entitled to interest on that sum of $16,870 paid by them in 2007. I award interest to the plaintiffs at the rate of 8% p.a. for 6 years. That sum is $8,097.60 which I award to the plaintiffs.[13]
[13] S 39 District Court Act, 1991
See Aro-Allan Veneer Pty Ltd v Public Trustee (1978) 18 SASR 428
·The costs of rectification in terms of the assessment by the Quantity Surveyor Allen Stanley in the sum of $337,700.
·I repeat that, in my opinion, on his unchallenged evidence, Mr Stanley’s assessment is reasonable. I do not award any interest on the sum of $337,700 as assessed by Mr Stanley.
Judgment sum
·The total sum I award to the plaintiffs is the sum of $362,667.60, inclusive of interest, as above.
·I enter judgment for the plaintiffs in the sum of $362,667.60 against the defendant.
Costs
·The plaintiffs seek an order for costs. There can be no dispute about the question of costs in relation to this matter. I award to the plaintiffs the costs of action on a party/party basis.
Formal Orders
1.   The Summary Judgment application by the plaintiffs is granted.
2.   Judgment be entered for the plaintiffs against the defendant in the sum of $362,667.60 inclusive of interest.
3.   The defendant to pay the plaintiffs costs of action.
4.   These orders dispose of the action in its entirety.