Hooper v Coolwater Constructions Pty Ltd

[2019] NSWDC 253

District Court

New South Wales

Medium Neutral Citation:	Hooper v Coolwater Constructions Pty Ltd [2019] NSWDC 253
Hearing dates:	11 June 2019
Date of orders:	12 June 2019
Decision date:	12 June 2019
Jurisdiction:	Civil
Before:	Gibson DCJ
Decision:	(1) The plaintiffs to file and serve a schedule identifying each part of the evidence which is claimed to be in reply by 25 June 2019. (2) The defendant to file and serve a response to the plaintiffs’ schedule by 9 July 2019. (3) The experts attend a conclave and prepare a joint expert report by 22 July 2019. (4) Plaintiff’s notice of motion filed on 24 May 2019 dismissed. (5) Plaintiffs pay the defendant’s costs of the notice of motion on an indemnity basis. (6) Confirm the hearing date in the sittings commencing 29 July 2019. (7) Any request for cross-examination of the experts is to be made two days within receipt of the conclave report, and if the experts are to give evidence by AVL, the court must be informed.
Catchwords:	PRACTICE AND PROCEDURE – case and trial management in circuit courts - plaintiffs bring application to rely on late-served lay and expert evidence in proceedings set down for trial in next country circuit sittings – parties previously agreed only lay evidence in reply permitted – plaintiff seeks to go behind the agreement noted by the court as the basis for the hearing date allocation – no evidence of “exceptional” circumstances warranting late service of expert report – notice of motion dismissed with costs on an indemnity basis
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 61 Uniform Civil Procedure Rules 2005 (NSW), r 31.28
Cases Cited:	Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Oshlack v Richmond River Council (1998) 193 CLR 72
Category:	Procedural and other rulings
Parties:	First Plaintiff: Angela Louise Hooper Second Plaintiff: Phillip John Hooper Defendant: Coolwater Constructions Pty Ltd (ACN 141 648 115)
Representation:	Counsel: Plaintiffs: Mr M Weightman Defendant: Ms M Skinner (solicitor)   Solicitors: Plaintiffs: Keystone Lawyers Defendant: O’Hearn Lawyers
File Number(s):	2018/227001
Publication restriction:	None

Judgment

1. These proceedings were listed for hearing in the sittings commencing on 29 July 2019 in circumstances described in more detail below. Notwithstanding the imminence of the hearing, the plaintiffs by notice of motion filed 24 May 2019 seek orders to be allowed to file extensive further affidavit material, including an expert report:

1. The plaintiffs be given leave to rely on the:

1. Affidavit of Angela Hooper sworn 9 April 2019;

2. Affidavit of Phillip Hooper sworn 9 April 2019;

3. Affidavit of Sean Hersee sworn 10 April 2019;

4. Supplementary Expert Report of Aaron Kyle dated 2 April 2019; and

5. Affidavit of Phillip Hooper sworn 20 May 2019.

2. The defendant serve any evidence in reply by 12 June 2019.

3. The plaintiffs pay the defendant’s costs thrown away by reason of Order 1.

4. The costs of the motion be costs in the cause.

2. The plaintiffs rely upon the affidavit of Bryce Richards sworn 21 May 2019 in support.

3. The defendant opposes the application by reason of the following grounds:

1. the imminent trial date;

2. the plaintiffs’ history of amendments;

3. the plaintiffs’ non-compliance with court orders; and

4. the absence of any explanation and the circumstances in which the application effectively goes behind the agreement upon which the proceedings had been given a hearing date.

4. Although not referred to in the submissions, I assume that the 12 June date for the defendant to file affidavits in reply (order 2 above) must be an error, as that is today’s date. However, on any reading of the orders, the defendant is given very little time to respond to so many affidavits, only some of which deal with material in reply.

The circumstances leading to this application

5. These proceedings were commenced on 13 July 2018. The plaintiffs entered into a contract with the defendant to perform residential building works in 2016. The parties fell into dispute and on 30 November 2017 the Fair Trading NSW issued a rectification order which the plaintiffs complained the defendant refused to comply with. The claim is defended and both sides rely upon expert as well as lay evidence.

6. The proceedings were case managed by timetables. On 19 March 2019, the Deputy Registrar made the following orders and notations:

1. Defendant to file and serve its motion and any evidence in support of the motion by 25 March 2019.

2. Plaintiff to file and serve its evidence in respect of the motion by 8 April 2019.

3. Motion to be listed for hearing on 16 April 2019.

4. Listed for further status conference on 16 April 2019.

7. On 25 March 2019, orders were made by consent for the defendant to file and serve its Amended Defence by 1 April 2019. It is not in dispute that this Amended Defence reflected matters which had been set out in the affidavit evidence beforehand.

8. The matter came before the Deputy Registrar on 16 April 2019, when the Registrar set the matter down for hearing, but with an important notation:

1. This matter is listed for Hearing on 29 July 2019 10:00 AM before the District Court - Civil at Newcastle.

2. Court to determine what evidence is strictly in reply and any evidence not in reply will not be read.

9. This notation is the difficulty. The plaintiffs had served these three additional affidavits and a further expert report between 10 and 11 April 2019, and the defendant had advised the plaintiffs that this was not reply evidence and it would be objected to. The hearing date was allocated on the basis that the trial judge would determine, from this material, what was properly evidence in reply at the final hearing, and any further evidence that was not in reply would not be read. The plaintiff is effectively seeking to take this task away from the trial judge and to go behind the notation upon which the listing for hearing was based.

10. There was an exchange of correspondence between the parties about what this notation meant, in which the initial position taken by the solicitors for the plaintiff was:

“We note your intention to object to our client’s lay evidence. In this respect, given that the matter is not listed for hearing for over three months from now, we fail to see what prejudice your client could possibly suffer.”

11. On 21 May 2019 the plaintiffs served a further affidavit. This created real difficulties as the defendant was already warning that the hearing date would need to be vacated (letter dated 23 April 2019), as the defendant could not respond to evidence served so late in the day.

12. It was in these circumstances that the application for leave to rely upon the whole of the additional affidavit material, notwithstanding the prior agreed notation restricting its use, was brought before the court.

13. Mr Weightman concedes that this application is brought to “go behind” (to use his words) the notation made when these proceedings were set down for hearing by the Deputy Registrar on 16 April 2019. His clients’ position is that the notation should never have been made and is “a mistake”. This is explained in the affidavit of Mr Richards at paragraphs 11 to 13 as follows:

“11. On 16 April 2019 orders were made listing the matter for hearing on 29 July 2019. On this occasion a notation was also made that the Judge would determine at the hearing whether the evidence was strictly in reply and what could be relied on.

12. This notation should not have been consented to. The solicitor who appeared on 16 April 2019 did not have carriage of the matter and misunderstood the position concerning evidence.

13. It was the Plaintiffs [sic] position that it was entitled to serve further evidence given the Defendant had filed an Amended Defence and that given the proceedings were not listed until 29 July 2019 there was ample time for the Defendant to serve any further evidence in response and there would be no prejudice suffered by the Defendant.”

The relevant provisions

14. Section 61 Civil Procedure Act 2005 (NSW) sets out general directions as to practice and procedure, a number of which are reflected in the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). The additional affidavits upon which the plaintiffs seek to rely have been served in breach of those rules (see s 61(3)(e)). As to the expert report, I note that UCPR r 31.28(1)(a) provides that expert evidence must be served in accordance with orders of the court, and, if it is not, it is only admissible by leave or with the opponent’s consent.

15. Paragraph 12.1 of District Court Civil Practice Note 1 provides:

“At any stage, the Court may refer a case to a directions hearing before the Civil List Judge or the Judicial Registrar. If a case is not ready for hearing at the status conference it will be referred for directions. Any order to provide statements or file affidavits must be strictly complied with. Generally, the Court will not accept statements, affidavits or submissions which have not been provided in accordance with an order.”

16. The late expert report is of particular concern. Rule 31.28(4) UCPR provides that leave should only be granted by the court where there are exceptional circumstances.

The relevant principles of law

17. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the High Court stated at [94]:

“94. It will be recalled that in J L Holdings the plurality said that nothing in Sali v SPC suggested that principles of case management might be employed “except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable”. Their Honours said that case management was not to be seen as an end to itself and that the ultimate aim of the court remained the attainment of justice, even in changing times. In Gale v Superdrug Stores Plc Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd, said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants” (Footnotes omitted)

18. These concerns are of particular importance in circuit courts, where time during the circuit sittings needs to be carefully case managed.

The explanation for the lateness of the application.

19. The defendant draws to my attention that the proposed new affidavit evidence includes documentary material nearly all of which was available prior to 19 October 2018, when the plaintiff’s evidence was served, and refers to the absence of explanation for this late application, given that the material was already in the plaintiff’s possession.

20. I note there is a general kind of explanation given in Mr Richard’s affidavit, which is that “the amendments to the defence and further reconsideration of the evidence required in the proceedings” was the triggering factor (see the affidavit of Mr Richards, paragraph 19). However, those amendments reflected the defendant’s evidence and were made after the plaintiff’s legal representatives pointed this out. If the affidavits now sought to be relied upon contained only material in reply, this material would be permissible in reply because that is the effect of the notation. The problem is that a significant part of this material is new.

21. This explanation (namely having to answer the new claims in the amended defence) has now been abandoned. The explanation now put before the court is that the plaintiff’s legal representatives are unhappy with the “deal” they made with the defendant in exchange for the hearing date being allocated. That is not a satisfactory explanation for the reasons explained by the High Court in Aon Risk Services Australia Ltd v Australian National University at [103]:

“103. The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.” (Footnotes omitted)

22. I also note the High Court’s observations at [106]:

“106. Given the requirements of the Rule and the effects associated with delay, it was incumbent upon ANU to tender an explanation as to why the matter had been allowed to proceed to trial in its existing form. It needed to explain why it was seeking leave to amend at the time of the trial, when the two insurer's defences had identified the issue central to the claim it sought to bring against Aon more than 12 months earlier. None was given. His Honour was in error in accepting that ANU had provided a satisfactory explanation. The statements made by counsel foreshadowing leave to amend were not evidence. The ANU's solicitor's later affidavit did not support them. In addition to the defences, the letters written by Chubb in 2003 showed that ANU was told of the importance of the valuation of the property to the insurers long before the receipt of more recent documentation. ANU's solicitor did not suggest that the defences, raising the same matter in connection with the misrepresentations, were misunderstood in their potential relevance to Aon. He did not say that ANU was first alerted to Aon's possible involvement as a result of what was said in mediation.”

23. Another problem for the plaintiffs is that *The defendant’s complaint (written submissions, paragraph 13) is that this is the fifth time that the plaintiffs have redefined and broadened their case. The previous occasions included provisions of limited particulars, the initial evidence in chief, further evidence served on 10 and 11 April, the evidence served on 21 May and the application before the court today. On each occasion, the defendant complains, it has been forced to reassess its position in order to meet the new evidence, incurring additional costs each time. This has impacted upon all aspects of the defendant’s preparation for trial to date, including the mediation and negotiations, which Ms Skinner says have been conducted differently having regard to the evidence relied upon by the plaintiffs at the time.

24. It is clear that much of the problem arises from the plaintiffs’ unreadiness at the time proceedings were commenced, and this has been worsened by inadequate preparation for trial since that time. However, the answer is not necessarily always a blanket refusal of leave to rely upon the evidence involved, but to seek to accommodate those parts of the evidence which the defendant is able to meet, namely the evidence in reply to its own evidence, as this was the basis for the notation being made on 16 April 2019. Accordingly, while I do not propose to grant unfettered leave to the plaintiffs to rely upon the lay affidavits in question, they will be permitted to rely upon those parts of the affidavit evidence which are in fact in rely, conformably with the agreement as reflected in the notation of 16 April 2019. To make the task of the trial judge easier, I have set out a timetable for the parties to identify those parts of the evidence which are asserted to be in reply in schedules which are to be exchanged before the hearing. This will make the determination of this issue easier for the trial judge.

25. The problem with the expert report is in a different category. There is no material before me to enable me to determine whether “exceptional circumstances” for the purpose of UCPR r 31.28(4) have been made out. The report is self-described as “supplementary”, but Ms Skinner states that it includes largely new material. It would appear that leave to rely on this report was not separately sought before the registrar and it is similarly caught by the agreement that only material in reply could be relied upon at the trial. This could create real difficulties during the hearing, not least because the material in this report could cause difficulties if they surface in cross-examination.

26. The solution in my view is for a conclave report to be prepared by the experts, conformably with the expectation in District Court Civil Practice Note 1 at paragraph 5.7, as well as the Standard Orders for Hearing as contained in District Court Civil Practice Note 1 at paragraphs 6-9. In circumstances where both parties intend to require cross-examination of the experts, these steps should be taken as a matter of course, as Practice Note 1 makes clear. In practical terms, this may well resolve many of the expert evidence issues and the parties have the benefit of a report identifying what the remaining issues at the trial will be, which should include the material in reply in the supplementary expert report, conformably with the agreement between the parties as to material in reply being available for use at the trial..

27. Accordingly, I propose to dismiss the plaintiffs’ notice of motion filed on 24 May 2019, but to make case management orders designed to ensure that those parts of the material which are genuinely in reply in the lay affidavits are still able to come before the court, and that issues in dispute between the experts can be resolved in a practical fashion, which will hopefully overtake the problems resulting from late service under UCPR r 31.28(4).

Costs

28. Ms Skinner seeks an order for costs to be paid on an indemnity basis. She draws to my attention the following:

1. The plaintiffs failed to comply with court directions to file and serve their evidence in accordance with the timetable;

2. There is a prior history of breach of court orders by the plaintiffs, including breaches of District Court Civil Practice Note 1, including a history of enlarging and changing its case over most of the conduct of the proceedings;

3. The circumstances in which the plaintiffs sought to “go behind” the agreement upon which the listing of the matter for hearing was made; and

4. The breach of UCPR r 31.28.

29. Delays of this nature are frequently met with costs orders but, as Ms Skinner points out in her helpful written submissions, costs orders are no longer seen as a salve for the stress of the party subjected to the delay, even where that other party is a corporation rather than an individual (Aon Risk Services Australia Ltd v Australian National University at [101]).

30. Indemnity costs should not be used as a form of punishment, but where there has been a significant failure to comply with the relevant rules and practice notes, an order for indemnity costs is a useful case management tool. As the High Court explained in Oshlack v Richmond River Council (1998) 193 CLR 72 at 89:

“It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a “solicitor and client” basis or an indemnity basis. The result is more fully or adequately to compensate the successful party the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.”

31. The bringing of such an application a matter of six weeks before the hearing, in circumstances where that hearing was set down on specific terms from which the plaintiffs now seek to resile is, in my view, sufficient to warrant the ordering of indemnity costs.

Orders

1. The plaintiffs to file and serve a schedule identifying each part of the evidence which is claimed to be in reply by 25 June 2019.

2. The defendant to file and serve a response to the plaintiffs’ schedule by 9 July 2019.

3. The experts attend a conclave and prepare a joint expert report by 22 July 2019.

4. Plaintiffs’ notice of motion filed on 24 May 2019 dismissed.

5. Plaintiffs pay the defendant’s costs of the notice of motion on an indemnity basis.

6. Confirm the hearing date in the sittings commencing 29 July 2019.

7. Any request for cross-examination of the experts is to be made two days within receipt of the conclave report, and if the experts are to give evidence by AVL, the court must be informed.

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Decision last updated: 12 June 2019