Gianni v Bettio
[2020] SADC 71
•10 June 2020
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
GIANNI & ANOR v BETTIO & ANOR
[2020] SADC 71
Decision of His Honour Judge O'Sullivan
10 June 2020
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - PARTICULARS - FURTHER AND BETTER
The plaintiffs as owners contracted with the defendants as builder to construct a residential dwelling.
In constructing the dwelling, the defendants used a product known as “Thermacell”. The defendants engaged the third party, SCA, to provide structural engineering design services, including the design and documentation for the use of Thermacell block walls for the dwelling.
The plaintiffs plead breach of contract and breach of the statutory warranties implied into the contract pursuant to section 32 of the Building Work Contracts Act 1995.
The defendants have filed a Third Party Claim against SCA in which they claim indemnity and/or contribution in respect of certain defects claimed by the plaintiffs against them. The defendants allege that SCA is in breach of its contract, in breach of its duty of care, in breach of a statutory guarantee, or that SCA has engaged in misleading or deceptive conduct.
SCA seeks orders that the plaintiffs file and serve a Sixth Statement of Claim providing further and better particulars in relation to the cause of a number of defects for which the defendants claim contribution or indemnity from SCA.
SCA also seeks an order that the defendants file and serve a Second Third Party Claim incorporating the particulars contained in a letter from the defendants' solicitors to its solicitors and that the defendants provide further and better particulars of the defects for which they claim indemnity and/ or contribution from it in the Third Party Claim.
The defendants support the application made by SCA insofar as it seeks orders that the plaintiffs provide particulars.
Held:
1. The plaintiffs are not required to provide the particulars sought. It is for the defendants, as the party who chose to join SCA alleging various defects due to SCA’s breach of contract, breach of duty of care, breach of statutory guarantee and/or misleading or deceptive conduct, to provide the particulars sought by SCA.
2. Orders made that the defendants provide further and better particulars and incorporate particulars contained in a letter from the defendants’ solicitors to SCA’s solicitors dated 28 February 2020.
Building Work Contracts Act 1995 (SA); Trade Practices Act 1974 (Cth), referred to.
GIANNI & ANOR v BETTIO & ANOR
[2020] SADC 71Introduction
The third party (“SCA”) seeks orders by Interlocutory Application:[1]
1. …
2. That the Plaintiffs file and serve a Sixth Statement of Claim providing further and better particulars identifying the extent to which it is (or is not) to be alleged at trial that the defects alleged in Items 5, 15, 23-27, 70, 71 and 73 of Annexure A to the Fifth Statement of Claim are causally attributable to defective compaction (or other some other breach of contract or duty) by the Defendants in undertaking the construction of the Thermacell walls (and where applicable, the precise nature of the alleged breach or deficiency by the Defendants in the construction of such walls);
3. That the Defendants file and serve an Amended (Second) Third Party Claim:
a. incorporating, in accordance with DCR 102(4), the particulars contained in the letter from Fenwick Elliot Grace to Gilchrest Connell dated 28 February 2020; and
b. providing further and better particulars of paragraph 23 of the Third Party Claim dated 4 February 2020 (TPSOC), and in particular, identifying the material facts to be relied upon in support of any allegation (whether in the alternative or otherwise) to the effect that the intrusion of moisture into either (i) the Thermacell walls; or (ii) internal parts of building (as alleged by the Plaintiffs at Items 5, 15, 23-27, 70, 71 and 73 of Annexure A to the Fifth Statement of Claim) is causally attributable to a breach by the Third Party of the SCA Contract (para 27 of the TPSOC), or the negligence of the Third Party (para 28 of the TPSOC).
[1] FDN 36.
Background
These proceedings concern the construction of a residential dwelling (“Works”) in Darlington, South Australia (“Site”). The defendants as builder contracted with the plaintiffs (“Contract”) to construct the dwelling on the Site. There is no issue that the Works are Domestic Building Works and that the Contract was a Domestic Building Work Contract as defined in s 3 of the Building Work Contracts Act (1995) (“the Act”).
A central issue in this matter concerns the use in the dwelling of a product known as “Thermacell”. As I understand it, Thermacell is a proprietary product in which a cavity wall is built using polystyrene blocks. Once placed, the reinforcement is placed in the cavity and then filled with concrete. The exterior faces of the polystyrene blocks are rendered or clad to protect them and provide a final finish.
The plaintiffs plead breach of contract and breach of the statutory warranties implied into the Contract pursuant to s 32 of the Act, namely:
i.That the Works would be performed in a proper manner to accepted trade standards and in accordance with the plans and specifications;
ii.That all materials to be supplied would be good and proper;
iii.That the Works would be performed in accordance with all statutory requirements; and
iv.That the Works would be performed such that the home constructed by the defendants would be reasonably fit for human habitation.
The plaintiffs allege that as a result of the defendants’ breach of the statutory warranties and breach of contract, there are defects in the Works. Those defects are attached at Annexure A to the Fifth Statement of Claim.
SCA is a company carrying on business providing structural engineering design services.
The defendants filed a Third Party Claim against SCA[2] in which they claim indemnity and/or contribution from SCA in respect of certain of the defects claimed by the plaintiffs against them.
[2] FDN32.
The defendants plead that SCA was engaged to provide structural engineering design services including to design and document the use of the Thermacell block walls for the dwelling.
The defendants allege that:
i.SCA breached its contract in designing and documenting the Thermacell walls in various respects;[3]
ii.They were consumers within the meaning of the Trade Practices Act 1974 and that pursuant to that Act, SCA gave a statutory guarantee pursuant to s 74(1) that its services would be rendered with due care and skill. The defendants allege that by reason of the breaches of contract alleged, SCA has breached that guarantee;
iii.SCA owed them a duty of care to carry out its services with due care, skill and diligence[4] and by reason of the same matters as alleged to have breached the contract, SCA is in breach of its duty of care; and
iv.By issuing the structural design, SCA represented to the defendants that:
· The structural design of the Thermacell block walls was structurally adequate;
· The design of the Thermacell block walls complied with the guidelines set out in the Thermacell Design Manual;
· The design of the Thermacell block walls was such that upon construction of the design by a builder following the Thermacell construction guidelines, it would not result in voids and/or honeycombing within the concrete; and
· The structural design of the Thermacell block walls was compliant with Australian Standards.
[3] Third Party Claim [27].
[4] Third Party Claim [16]-[18].
The defendants allege that the Thermacell walls are:
i.Structurally inadequate due to the presence of honeycombing and voids in the concrete with the consequence that the steel reinforcement is visible and rusting;
ii.There is freestanding water trapped in the voids and/or honeycombing;
iii.The water ingress has caused rotten timber packing in the walls; and
iv.There is water ingress into the internal areas of the house causing various internal defects;[5]
[5] Third Party Claim [23].
The defendants continue in the Third Party Claim[6] by alleging that insofar as the Works are affected by the alleged Thermacell defects identified above, the Works:
i.Were not performed in accordance with all statutory requirements;
ii.Were not performed properly and skilfully; and
iii.Were not performed such that the property would be reasonably fit for human habitation.
[6] At [24].
Defects
The defects in relation to which SCA seeks further and better particulars are those alleged in the following items in Annexure A to the Fifth Statement of Claim.
Item no. Item Location where defect identified Description of defect 5. Internal timber floors Upper level: kitchen, dining and living areas · Cupping and separating of floor boards
· Mottled finished coating
15. Internal linings Rumpus Room High moisture levels detected in the walls caused by leaks 23. Carpets and skirting Lower level rumpus room Carpet is water-stained and mouldy and skirtings are damaged due to water leaks and/or moisture ingress 24. Carpets and skirting Home Theatre Floors are wet/have high moisture level readings and are mouldy/decaying and skirtings are damaged due to water leaks and/moisture ingress 25. Carpets and skirting Bedroom 4 Efflorescence is present on concrete floor, carpet is water-stained and mouldy, skirtings are damaged including a split mitre joint and are coming away from walls due to water leaks and/or moisture ingress 26. Carpets and skirting Study Carpet is mouldy and skirtings are damaged including a split mitre joint and are coming away from walls due to water leaks and/or moisture ingress 27. Carpets and skirting Bedroom 1 Skirtings are damaged and are coming away from the walls due to water leaks and/or moisture ingress 70. Thermacell wall Bedroom 4 · An area of structurally inadequate reinforced concrete fill in the Thermacell blocks due to honeycombing and voids in the concrete and visible and rusting reinforcement
· The construction method used by the Builder for the Thermacell wall was inadequate in that:
o The Builder failed to ensure the concrete fill was fully and/or adequately compacted with all entrapped air removed
· Other defects in the Thermacell wall identified included:
o Rotten timber packing
o Rusting of steel columns
o Relatively high moisture levels detected from the internal side of the external wall
71. All Thermacell walls Entire residence · Structural inadequacy of the entire residence pertaining to the Thermacell walls due to:
o Honeycombing and voids in the concrete
o Visible and rusting steel reinforcement and rusting structural steel members
· The construction method used by the Builder for the Thermacell walls was inadequate in that:
o The Builder failed to ensure the concrete fill was fully and/or adequately compacted with all entrapped air removed
o The Builder used, at least in some instances, concrete for the Thermacell walls that:
§ Did not meet the Thermacell specification in terms of slump and aggregate
§ Was spoiled
· Other defects in the Thermacell walls including:
o Rotten timer packing
o Rusting of steel columns
o Freestanding water trapped in the voids/honeycombing of the concrete fill
o Relatively high moisture levels have been detected in the internal face of the external walls throughout the residence
73. Thermacell wall External wall of the laundry (downstairs) · An area of structurally inadequate reinforced concrete fill in the Thermacell blocks due to honeycombing and voids in the concrete and visible and rusting reinforcement
· The construction method used by the Builder for the Thermacell walls was inadequate in that:
o The Builder failed to ensure the concrete fill was fully and/or adequately compacted with all entrapped air removed
· Other defects in the Thermacell wall including freestanding water trapped in the voids/honeycombing of the concrete fill
The conduct of the Application
This matter proceeded on the papers.
SCA submissions
In support of its Application, SCA reads the affidavits of Jamie Lee Ling sworn 20 March 2020, 25 March 2020 and 1 April 2020
In its written submissions, SCA identifies three issues:
1First, the extent to which SCA is entitled to know, in advance of the trial, the substance of the case which the plaintiffs propose to present;
2Second, that proper pleading practice requires the proper pleading of particulars which have previously been supplied informally to SCA’s solicitors from the defendants’ solicitors; and
3Third, what SCA describes as a mirror of the first issue in that it submits that unless the plaintiffs provide the particulars which are sought, the defendants will not be in a position to properly articulate the nature of the breach of contract or breach of duty which is being alleged against SCA.
Plaintiffs’ submissions
The plaintiffs oppose an order that they provide particulars and submit that DCR 102 only authorises a Court to make orders against the plaintiffs in respect of particulars that are material to their case. They submit that the request is in relation to the defendants’ case and is aimed at assisting SCA to meet the defendants’ case.
The plaintiffs observe that the particulars sought require the plaintiffs to respond to questions to which they do not know the answer nor need to know the answer in order to make out their case against the defendants. They submit that they did not join SCA to the proceedings and it is for the defendants to particularise and prove how SCA is liable to contribute to any loss they may sustain or alternatively indemnify them against that loss.[7]
[7] Plaintiffs’ Written Submissions [2].
The plaintiffs characterise SCA’s request as an interrogatory rather than a request for particulars or alternatively a request for evidence and not material facts.
I do not consider the particulars requested to be in the nature of an interrogatory, nor a request for evidence although I accept that sometimes the line between evidence and particulars can be a fine one.
The plaintiffs say that if required to provide the particulars sought, they will need to spend time and expense obtaining further reports, which will cause delay.
Defendants’ submissions
The defendants read and rely upon the third affidavit of Jordan Schutz sworn 31 March 2020.
The defendants support the application by SCA and adopt its submissions. They point out that they have been seeking further information from the plaintiffs since September 2016, which appear from the defendants’ written submissions to relate mainly to landscaping and path work.
The defendants submit that the lack of particularity in the plaintiffs’ claim in relation to causation and liability has been an issue for over three years without adequate provision of particulars which they say might shed some light on the causal relationship between the genesis of the alleged moisture ingress and the claim for the damage allegedly suffered as a result.[8]
[8] Defendants’ Written Submissions [12].
The defendants submit that neither they nor SCA should be placed in a position of learning for the first time in the plaintiffs’ opening at trial the basis upon which the plaintiffs seek to attribute cause or responsibility to the defendants and correspondingly SCA. They conclude by submitting that the appropriate course is for the plaintiffs to provide the particulars requested and to file a further Statement of Claim, such that the defendants can then file an amended Defence and Third Party Claim and SCA can file its Defence to the Third Party Claim.
Consideration
Putting aside for the moment whether SCA can apply for particulars from the plaintiffs, the key issue in this aspect of the dispute is the identification, in a causal sense, of why damage had been caused to the dwelling. That is an important consideration at a number of levels.
First, it will allow the parties to focus on the alleged cause of the particular defects/damage in question.
Second, to that extent it will minimise the risk of a party being taken by surprise and will allow the party in question to concentrate on the real issues. As part of that consideration it is fundamental that SCA is entitled to know the case it has to meet at trial.
However, it has to be borne in mind that it is the defendants who have joined SCA, alleging that they are entitled to contribution or indemnity from it on the basis of causes of action pleaded against it. As a consequence, SCA seek particulars[9] as to the alleged cause of certain defects so the nature or scope of any alleged rectification process which may be required to cure the defect can be understood, tested and if necessary be made the subject of expert evidence.
[9] See [5].
The plaintiffs complain that they have had a house built by the defendants which contains a number of defects as set out in Annexure A to the Fifth Statement of Claim. I will deal with those defects the subject of the particulars request below but the defendants have chosen to join SCA, alleging at paragraph 23 of the Third Party Statement of Claim various problems with the Thermacell walls for which it says SCA bear some responsibility. Although the defendants submit that unless the plaintiffs provide the particulars which are sought, they will not be in a position to properly articulate the claims against SCA, with respect that ignores the fact that the plaintiffs have not joined SCA.
If the defendants have pleaded a claim for contribution/indemnity against SCA on the basis of the matters in paragraph 23 of the Third Party Statement of Claim they must know why.
I consider that the plaintiffs are not required to provide the particulars sought but as the party who joined SCA, it is the defendants who should provide them.
As to each of the alleged defects about which particulars are sought:
Item 5 – Internal timber floors – cupping and separating of floorboards. Mottled finished coating.
There is no reason identified by the defendants why it is that from a causation perspective, they are entitled to contribution or indemnity from SCA if this defect is made out. The plaintiffs are entitled to allege that this is a defect with the allegation directed at breach of the Contract between them and the defendants and breach of the statutory warranties. If the defendants say that the defect is as a result of SCA’s breaches of contract, duty of care, statutory guarantee or misleading or deceptive conduct then it is incumbent upon the defendants to plead why. Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to this defect.
Item 15 - Internal linings of the rumpus room - High moisture levels detected in the walls caused by leaks.
Again, the plaintiffs allege a breach of contract and breach of statutory warranty. In this case they also plead breach of the relevant contract documents including Australian Standards and the Building Code of Australia. For the same reason as set out in relation to item 5 above, if the defendants allege that they have been put into breach of contract, alternatively in breach of the statutory warranties, alternatively in breach of the Building Code of Australia by reason of the actions of SCA then it is incumbent upon the defendants to identify why that is so.
Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to this defect.
Item 23-27 – Carpet and Skirtings – Carpet is water stained and mouldy and skirtings are damaged due to water leaks and/or moisture ingress.
Items 23, 24, 25, 26 and 27 all deal with substantially the same complaint albeit in different locations and with different defects.
The plaintiffs allege breaches of contract and/or statutory warranties and relevant contract documents/Australian Standards/Building Code of Australia provisions.
The same observations as I have made in relation to items 5 and 15 apply.
Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to these defects.
Item 70 – Thermacell wall – Bedroom 4 – An area of structurally inadequate reinforced concrete fill in Thermacell blocks due to honeycombing and voids in the concrete. Visible and rusting reinforcement.
The plaintiffs allege breaches of contract and/or statutory warranty and/or relevant contract documents/Australian Standards/Building Code of Australia. If the defendants allege that these defects are due to SCA’s breach of contract, breach of duty of care, breach of statutory guarantee and/or misleading or deceptive conduct then it is incumbent upon the defendants, as the party joining SCA and seeking contribution and/indemnity, to identify why it is that is the case.
Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to this defect.
Item 71 – All Thermacell walls – Entire residence – Structural inadequacy of the entire residence pertaining due to the Thermacell walls as a result of honeycombing and voids in the concrete, visible and rusting steel reinforcement and rusting structural steel members. Defective construction method used by the builder.
This particular alleged defect highlights the point made in relation to the other defects, in particular, the allegation by the plaintiffs that the construction method used by the builder for the Thermacell walls was inadequate. If the builder denies that is the case then it is for the builder to establish that at the trial. If on the other hand the defendants either admit that is the case or say that if it is found to be the case it is due to the acts or omissions of SCA, such that SCA is in breach of its contract or its duty of care or its statutory guarantee or that it engaged in misleading or deceptive conduct, then it is incumbent on the defendants to identify why that is so.
Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to this defect.
Item 73 – External wall of the laundry downstairs.
The defect is the same in general terms as for item 71 but this time the defect relates to an area of alleged structurally inadequate reinforced concrete, a defective or inadequate construction method. A further defect is identified in the Thermacell wall including freestanding water trapped in the voids/honeycombing of the concrete in-fill.
The same considerations as I have set out above apply with equal force.
Accordingly, I will make an order in terms of paragraph 3(b) of SCA’s interlocutory application in relation to this defect.
Conclusion
For the reasons set out above:
1I dismiss SCA’s application for the order sought in paragraph 2 of its application;
2I order that the defendants:
File and serve an Amended (Second) Third Party Claim:
a.incorporating, in accordance with DCR 102(4), the particulars contained in the letter from Fenwick Elliot Grace to Gilchrest Connell dated 28 February 2020; and
b.providing further and better particulars of paragraph 23 of the Third Party Claim dated 4 February 2020 (TPSOC), and in particular, identifying the material facts to be relied upon in support of any allegation (whether in the alternative or otherwise) to the effect that the intrusion of moisture into either (i) the Thermacell walls; or (ii) internal parts of building (as alleged by the Plaintiffs at Items 5, 15, 23-27, 70, 71 and 73 of Annexure A to the Fifth Statement of Claim) is causally attributable to a breach by the Third Party of the SCA Contract (para 27 of the TPSOC), or the negligence of the Third Party (para 28 of the TPSOC).
3I will hear the parties as to the question of costs. I direct that any party that seeks an order for costs identify the amount sought by way of costs and the basis upon which those costs are sought ie. on a solicitor client or party party basis and the reasons why.
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