Kane Constructions Pty Ltd v Sopov
[2002] VSC 218
•12 June 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 6897 of 2001
| KANE CONSTRUCTIONS PTY LTD (ACN 007 354 396) | Plaintiff |
| v | |
| COLE SOPOV AND ORS and | Defendants |
| BRENDAN ARCHER | Third Party |
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JUDGE: | Byrne J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 May 2002 | |
DATE OF JUDGMENT: | 12 June 2002 | |
CASE MAY BE CITED AS: | Kane Constructions Pty Ltd v Sopov | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 218 | |
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Practice and procedure – discovery – self-executing order – non-compliance with order – whether party should be relieved of consequences of self-executing order.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mrs S.M. Crennan QC with Mr M.J. Stirling | Deacons |
| For the Defendants | Mr J.G. Bolton | John L. Pilley |
| For the Third Party | Mr R. de Brouwer | Minter Ellison |
HIS HONOUR:
In this Building Case the plaintiff, Kane Constructions Pty Ltd, entered into a contract dated 20 August 1999 with the defendants, Cole Sopov, Norma Walker and Stacks Properties Pty Ltd, whereby it agreed to convert commercial premises in Oxford Street, Collingwood into residential apartments. In September and October 2000 a flurry of notices was exchanged between the parties under which it is contended that the builder suspended the work pursuant to cl. 44.9 for proprietor’s breach; the proprietor took the work out of the hands of the builder pursuant to cl. 44.4(a); and the builder accepted the proprietor’s repudiatory conduct and terminated the contract. As may be supposed, the right of each party to take each of these steps is contested as are the circumstances relied upon as giving rise to these rights. One thing appears to be clear: the contract is at an end notwithstanding that the work is incomplete. Contested, too, are the consequences said by each party to flow from this termination.
So described, this is a fairly unremarkable building dispute. There is a claim by the builder for about $2.5M together with the return of securities which have been called upon and a counterclaim including a claim for over $100,000 for sums overpaid to the builder. Less conventional is the proprietor’s third party claim addressed to the solicitor for negligent advice when the notices were given and the securities called upon. The proceeding is fixed for trial to commence on 4 August 2003 on an estimate of two months’ duration.
The present application before me arises out of the suggested non-compliance by the proprietor of a self-executing order for discovery made on 27 March 2002. The history of discovery by the proprietor is a lamentable one. The proceeding, as is proper for one concerning a domestic building, started its life in the Victorian Civil and Administrative Tribunal. It found its way into this Court in July 2001 and since that date it has been managed by me in the Building Cases List. On each of the five occasions that it has come before me for directions, questions of the proprietor’s discovery have been raised. The first was on 27 July 2001. It would seem that, before the Tribunal there had been some discovery by list because on that date I ordered that the parties make discovery by affidavit in lieu of the existing list. This was to be achieved by 10 September 2001. The proprietor did not comply with this order.
On 26 October 2001 the time for discovery was extended by consent to 30 November 2001. The proprietor did not comply with this order.
On 8 February 2002 I directed the proprietor make discovery by 22 February 2002. The proprietor did not comply with this order within time. On 25 February 2002, according to John Lindley Pilley, the solicitor for the proprietor, he forwarded to the solicitors for the builder a copy of what was called the proprietor’s supplementary affidavit of documents. A copy of this document is exhibited to the plaintiff’s affidavit; the original does not appear to have been filed with the Prothonotary.
Complaint was made about the form of this affidavit which describes the documents simply by file description and bundle. By 27 March 2002, the next directions day, the matter had been resolved between the parties. They consented to an order in the following terms:
“4.The Defendants file a further affidavit of documents, including documents already discovered, such affidavit to comply with the Rules and in particular to identify each document in the files referred to by Coles Sopov in his affidavit dated 25 February 2002 by its proper description and unique number, by 12 April 2002.
5.In the event that the defendants do not comply with the preceding order, then:
(a)their counterclaim be dismissed; and
(b)their defence be struck out and the Defendants be placed in the position as if they had not defended the proceeding; and
(c)the Plaintiff forthwith be entitled to enter or apply for judgment against the Defendants in accordance with Order 21.”
At the time I expressed apprehension about the difficulties which the proprietor might bring on itself by consenting to such an order but I was informed by counsel that this had been agreed. And so the order was made.
Mr Pilley says that on 11 April 2002 he prepared and forwarded a further affidavit of documents sworn on that day to the solicitors for the builder. It will be recalled that the order requires that the document be filed. In response to my enquiry whether it had in fact been filed on that day or at all, I was told by counsel that it had been filed on 12 April 2002. The document is not on the court file and enquiry at the office of the Prothonotary has not disclosed it. Argument before me, nevertheless, proceeded on the basis that the affidavit had been filed by the due date.
There followed correspondence between the solicitors for the builder and the solicitors for the proprietor in which the former alleged and the latter denied that the affidavit was defective in form. On 14 May 2002 the solicitors for the builder sent a fax informing the solicitors for the proprietor that they proposed to exercise their rights under paragraph 5 of the 27 March 2002 order and that they would do so after 12 noon on 17 May 2002.
On 16 May 2002 the solicitors for the proprietor forwarded to the solicitors for the builder a further affidavit of Mr Pilley and a summons returnable in the Practice Court on 17 May 2002. This has been referred to me by the judge in the Practice Court having regard to Chapter II Rule 3.02. This summons and affidavit also do not appear to have been filed.
Three deficiencies in the affidavits of documents were pressed in argument.
(1)The affidavit does not comply with form 29B for it contains no assertion such as that in paragraph 5 of the form, stating that the deponent has not and has not had documents in its possession other than those scheduled.
(2)The proprietor has failed to include documents which have been shown to exist and which are in its possession. Mention was made of documents in the custody of the superintendent.
(3)Notwithstanding the specific direction contained in the order, the individual documents are not properly identified.
The first contention is clearly made out. The answer offered on behalf of the proprietor is that such a paragraph is inappropriate in a case such as this where documents, including those with respect to rectification and completion, are still being received and will be received by the proprietor in the future. This misconceives the terms and function of the paragraph in question.
An examination of the affidavit of documents shows that the third contention also is made out. While the proprietor has condescended to much greater detail than in the previous affidavit, each document is not described and given a unique number.
It was accepted, too, that some documents relating to issues in the proceeding which were in the possession of the proprietor had escaped inclusion in the affidavit. There may be doubt about the documents held by the superintendent but other omissions have been demonstrated. Whether this is a breach of the order is more uncertain. In any event, in a case of this type, it will often happen that documents are missed in the discovery process. Apart from the documents presently with the superintendent, it could not be put on behalf of the builder any higher than that those responsible for collating the documents were less than careful.
It follows from this that the proprietor is in breach of the order so that the consequences which it accepted on 27 March 2002 might follow. Counsel on his behalf then threw himself on the mercy of the Court seeking to be permitted to file and serve yet another affidavit to cure the deficiencies. He pointed out that this is not a case of contumelious disregard of the court order, but merely, to use my words and not his, an inept and ineffective attempt at carrying out a significantly large task. He added, as will be apparent from my brief summary of the case, that this is a case where there is a genuine dispute between the parties and that the Court should not lightly deny his client its day in court.
Counsel for the builder reminded me that the proprietor had voluntarily taken upon itself the risk which has now become reality. They referred to the history of non-compliance on the part of the proprietor.
In the end, my decision must be guided by my perception of where the interests of justice lie. The builder suffers no prejudice by reason of the defective affidavit. The trial is a long way in the future and there is ample time for the proprietor’s documents to be gathered and inspected. It is a hard thing to deprive a party with an arguable case of the right to present that case in court. It is a course which I would not visit, even upon a delinquent party, unless I was satisfied that there was contumely present or that some serious prejudice would otherwise be caused to the other party. I will therefore relieve the proprietor of the consequences of the self-executing order.
I will, however, make such order as I can to ensure both that the builder suffers no loss by reason of the proprietor’s failure to comply with the order and that the proprietor makes proper discovery without delay.
I, therefore, propose the following orders:
(1) That paragraphs 4 and 5 of the order of 27 March 2002 be vacated.
(2)Direct that the defendants by 14 June 2002 file and serve a third affidavit of discovery in lieu of that delivered on 11 April 2002 in a form which complies with the Rules and which identifies each document by its proper description and unique number.
(3)The costs of the plaintiff occasioned by the failure of the defendants to comply with the orders referred to in paragraph 1, including the costs of correspondence following 12 April 2002 dealing with the deficiencies in the affidavit of discovery and including the costs of this application and any reserved costs be taxed on an indemnity basis and paid by the defendants.
(4)The summons for directions will be adjourned to a date to be determined.
(5)There will be liberty to apply.
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