Matthies Property Investments Pty Ltd v Stosius and Staff Constructions Pty Ltd and Anor
[2020] VCC 483
•26 May 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-05697
| Matthies Property Investments Pty Ltd | Plaintiff |
| v | |
| Stosius and Staff Constructions Pty Ltd | First Defendant |
| Sun Installations Pty Ltd | Second Defendant |
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JUDGE: | His Honour Judge Woodward | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers, final submissions dated 24 April 2020 | |
DATE OF RULING: | 26 May 2020 | |
CASE MAY BE CITED AS: | Matthies Property Investments Pty Ltd v Stosius and Staff Constructions Pty Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 483 | |
REASONS FOR RULING
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | B Reid | Giannakopoulos Solicitors |
| For the first defendant | J M Forrest | Whitelaw Flynn Lawyers |
HIS HONOUR:
Summary and outcome
1 The plaintiff (“Matthies”) is the registered proprietor of the property at 22 - 24 Gellibrand Street, Kew. By an ABIC MW-1 2003 standard form building contract made on or about 9 July 2008, Matthies engaged the first defendant (“Stosius”) to construct an aged care facility at the property for a contract sum of $15,289,903.20. The contract described the aged care facility as a new 100 bed double storey aged care facility lower ground floor car park and associated works. The scope of works included in the contract required Stosius to carry out the installation of the roof of the building.
2 Matthies brings this proceeding against Stosius (“2019 Proceeding”) for breach of the building contract. Matthies alleges defects in the roof of the building, as identified in an expert report by Robert Coghlan dated 18 September 2018 (“Coghlan Report”). More precisely, it alleges defects and non-compliant works with respect to box gutters, flashings and cappings. The damages claimed against Stosius are the costs of rectification of the “Roof Defects” in the sum of $625,906.60.
3 In this application by summons dated 17 February 2020, Stosius seeks summary judgment, relying on estoppels arising from claims brought by Matthies against Stosius in an earlier proceeding (County Court proceeding CI-17-01050 of 2017) (“2017 Proceeding”) and the terms of the settlement of that proceeding by Deed of Settlement dated 16 August 2017 (“Deed of Settlement”). With more than a little hesitation, I have determined that the application must be dismissed. In my view, Stosius’ arguments have considerable force. But on the current evidence and exercising the necessary caution, I cannot be satisfied that Matthies’ claim has no real prospect of success.
The evidence
4 The affidavit material sworn in this application is extensive. It comprises affidavits in support of the application of John Stosius sworn 17 February 2020 (“first Stosius affidavit”), 17 April 2020 (“second Stosius affidavit”) and 24 April 2020 (“third Stosius affidavit”) and an affidavit of expert building consultant Simon Brownhill affirmed on 17 April 2020 (“Brownhill affidavit”). There are three affidavits in opposition to the application. Two by Edward Matthies sworn 10 March 2020 (“first Matthies affidavit”) and 8 April 2020 (“second Matthies affidavit”) and one by expert building consultant Antony Croucher sworn 10 March 2020 (“Croucher affidavit”).
5 In the first Stosius affidavit, Mr Stosius deposes that on 8 December 2010, the nominated architect under the contract issued a defects list that included alleged leaks to the ceiling in the dining room, in a light fitting, between a handrail and tile, to the soffit lining to the terrace and to the ceiling in the dining room. Further, between April and June 2012, Stosius received complaints about water ingress from the roof into the aged care facility at various locations. Stosius responded to these complaints in a letter to the architects dated 1 June 2012, advising that many of the problems with water leakage were caused by leaf litter and suggesting ways to reduce the risk of water ingress.
6 By letter dated 14 July 2016, Matthies wrote to Stosius, asserting that various defects had arisen in the works to construct the aged care facility since completion and noting that it had engaged the services of building expert Tony Croucher to prepare a report outlining the defects. The report was dated 12 April 2016 (“Croucher Report”). The Croucher Report is a critical document in this application. It sets the parameters of the claims in the subsequent 2017 Proceeding and informs the construction of the Deed of Settlement. In the first Stosius affidavit, Mr Stosius deposes that Croucher Report stated:
· on page 9, that evidence of water ingress could be seen around the penetrations to the concrete slab forming the ceiling of the basement car park below courtyards one and two;
· on page 10, that further testing may be required, but that water was leaking from the planter boxes at the perimeter of courtyards one and two;
· on page 14, that water ponding was occurring on the north facing balcony (terraces 2 and 3);
· on page 17, that water ingress via the roof was occurring in the area of the north facing balcony (terraces 2 and 3) and was affecting the plaster ceiling lining;
· also on page 17, that the cause of the water ingress:
“could not be identified however it will be necessary for a roof plumber to carry out extensive flood testing to identify the source of water. As a general statement, it appears there is little or no overflow provision in the concealed box gutters and is something that should be addressed as a back-up measure”; and
· on page 18, that the roof terrace outside room 5 was suffering water ingress and required detailed investigation and repair by a roof plumber.
7 Matthies commenced the 2017 Proceeding on 27 February 2017. The statement of claim asserted that Stosius’ alleged defective workmanship was particularised by the Croucher Report and claimed damages of $314,543.80. Stosius’ defence is dated 1 May 2017. By the Deed of Settlement, the parties settled the 2017 Proceeding. The Deed of Settlement relevantly provided:
§ in recital A, that:
“On or about 9 July 2008, the Plaintiff and the Defendant entered into a contract pursuant to which the Defendant would construct an aged care facility at the Site described as a ‘new 100 bed double story aged care facility Lower ground floor car park and associated works’ (the ‘works’) in consideration of $15,289,903.20 including GST.”
§ in recital C, that: “The works were alleged to be defective by the Plaintiff, as outlined in the [Croucher Report] (the ‘defective works’)”.
§ that Stosius pay Matthies $170,000 “in full satisfaction of the claim, interest and costs” (clause 2);
§ that “[t]he parties agree to mutually abandon any rights, entitlements or liabilities arising from this action” (clause 9); and
§ in a handwritten addition to the Deed of Settlement that:
“Upon payment under clause 3 of this Deed of Settlement, the Plaintiff agrees to release and forever discharge the Defendant from any and all liability which it may have or but for this Deed of Settlement would have had in relation to all of the defects alleged in this proceeding, including, without limitation, all of the defects alleged in the report of Mr Tony Croucher filed in the proceeding” (clause 10).
8 Mr Stosius deposes that Stosius paid the $170,000 to Matthies pursuant to the Deed of Settlement and that: “I did not expect after executing the Deed of Settlement that the Plaintiff would be free to make another claim against Stosius in respect of the aged care facility”. He adds that if he had known that Matthies would commence proceedings two years later again alleging that Stosius’ work was defective, he would not have given instructions to settle the 2017 Proceeding but would instead have sought advice about defending all claims. He says that:
“By the Plaintiff commencing the 2019 Proceedings, Stosius has lost the strategic advantage it thought it had secured by paying the sum of $170,000 where a resolution of the claims of defective workmanship in both the Coghlan and Croucher Reports may have produced a better outcome for Stosius than separate resolutions of each of the two claims.”
9 According to Mr Stosius, by a letter dated 14 May 2019, Matthies’ solicitors sent a letter of demand to Stosius asserting that there were roofing defects in the building and referring to an expert report by Robert Coghlan dated 18 September 2018 (“Coghlan Report”). Mr Stosius says that the Coghlan Report identified defects and non-compliant works relating to the box gutters, roof penetrations, flashing and cappings. Mr Stosius deposes that he believed that the alleged defects referred to in the Coghlan Report existed at the time of Matthies’ complaints in 2009 and 2013, and at the time of the Croucher Report and the Deed of Settlement.
10 Finally, Mr Stosius confirms that Matthies commenced the 2019 Proceeding and that he believes that the same facts concerning the cause of water ingress into the building will arise for consideration in the 2019 Proceeding as arose in the 2017 Proceeding. He references a report by Simon Brownhill dated 19 August 2019 (“Brownhill Report”), an expert building consultant retained by Stosius, which (he says) establishes that “many of the items listed in the Coghlan Report were included in the Croucher Report”. To illustrate this, he sets out in chart form six discrete defects that Mr Brownhill says are identified in both the Croucher Report and the Coghlan Report.
11 In the first Matthies affidavit, Mr Matthies commences with a summary of the factual background, in similar terms to the summary in the first Stosius affidavit. In relation to the claim in the 2017 Proceeding, Mr Matthies notes that the particulars of the damages of $314,543.80 claimed in that proceeding comprised $243,618.80 “as per the Croucher Report”, with the balance made up of other rectification works. In relation to the execution of the Deed of Settlement he deposes that this was executed following an on-site mediation attended by the directors and legal representatives of both parties. He notes that clause 10 of the Deed of Settlement was “handwritten by one of the legal representatives” for Stosius.
12 Mr Matthies then sets out in some detail the circumstances of the 2010 defects list (including that recent enquiries had established that the author of the list had retired many years earlier and had a poor memory). He then comments on the content of the letter dated 1 June 2012 sent by Stosius to the architects, referring to leaks above certain rooms and the “[v]erandas on the north side of the building”, suggesting that “a lot of the problems with the roof have been caused by leaf litter” and proposing a solution involving cutting back overhanging foliage and the “installation of an additional 4 off overflow pops above the verandas on the north side of the building”.
13 The first Matthies affidavit next refers to and comments on the Croucher Report and Croucher affidavit. I deal with those below. He asserts in substance the Croucher Report commented only on specific defects “and did not comment on the other defects that were identified in the Coghlan Report, including the extensive defects in the Main Roof Structure”. He continues:
“I acknowledge that the Croucher Report recommended that the Plaintiff engaged a roof plumber to investigate the North Facing Balcony (Terraces 2 & 3) and the Roofed Terrace outside Room 5… As at 17 August 2017…the Plaintiff was only aware of the limited roofing defects identified in the Croucher Report, which are marked in the exhibits to the Croucher affidavit”.
14 Mr Matthies then refers in detail to two water ingress events before the date of the Deed of Settlement (17 August 2017), being on 9 September 2014 and on 20 and 21 March 2017, including by referring to insurance claims in respect of those two events. Mr Matthies attributes those events to extreme weather, and asserts that the second event “was purely in the North Terrace Area, as identified in the Croucher Report”. After again referring to the asserted limits to the Croucher Report, Mr Matthies deposes that: “In light of the above matters, I dispute the allegation that the Plaintiff knew about the extensive roof defects identified in the Coghlan Report, or that we had any way of being altered [sic] to such defects”.
15 The first Matthies affidavit concludes by referring to a further water ingress event in December 2017, and a report later prepared by Bay Building Services that identified issues with the box gutters. In particular, the report by Bay Building Services stated (among other things) that:
“On arrival, we were shown a box gutter on the northern elevation where it was suspected water had entered from. This box gutter is only 20mm deep in some areas (non-compliant) and it appears that during heavy rain it has overflowed into the building. There is also a lack of overflow provision in this box gutter. It is our understanding this box gutter is approximately 6-7 years old.”
16 Mr Matthies deposes that the receipt of the report from Bay Building Services was “the first occasion where the Plaintiff became aware that we may have a problem with the Main Roof Structure”. He continues:
“After receiving and reviewing the Bay Building Services Report, we deemed it appropriate to engage a roof plumber to carry out an overall review of all of the Main Roof Structure in the Aged Care Centre, so we can have an understanding of the full extent of the roofing defects.”
17 In the Croucher affidavit, Mr Croucher briefly sets out the circumstances of his engagement by Matthies in late 2015. He deposes that: “on 12 January 2016, I carried out an inspection of the Aged Care Facility”, and that he prepared the Croucher Report on 16 April 2016. Mr Croucher then exhibits various plans of the aged care facility and an aerial photograph and by reference to these identifies what he describes as the “North Balcony Area”, which he describes as a “flat metal roof which protrudes out from the building structure”. He then states that:
“The main roof structure sits on top of the First Floor (the “Main Roof Structure”). Based on the Coghlan Report, I understand that the main roof structure is constructed from concrete tiles.”
18 Mr Croucher next identifies the roofing issues as described in the Croucher Report, which he deposes related to the entry portico, the north facing balcony (terraces 2 and 3) and the roofed terrace outside room 5. He states that these were the only roofing issues which he was asked to inspect and which he in fact inspected on 16 January 2016. He deposes that he was able to observe these areas either by viewing them from a room within the aged care centre or by inspecting damage to the ceilings, and that: “I did not climb onto any roofs during my inspection… I was not asked to inspect the Main Roof Structure, and I did not inspect the Main Roof Structure”.
19 Finally, Mr Croucher refers to the recommendations in the Croucher Report concerning further investigation and repair by a roof plumber. He asserts in substance that those recommendations were “limited to recommending that the plaintiff engage a roof plumber to investigate the roofs above the North Facing Balcony (Terraces 2&3) and the Roofed Terrace outside Room 5”.
20 In the second Matthies affidavit, Mr Matthies summarises and exhibits various reports by loss adjusters Cunningham Lindsay into the water ingress event on 9 September 2014. He extracts from those reports sections that confirm that the damage from the water ingress was caused by a localised storm during which 25mm of rain accompanied by hail fell in a short period, blocking box gutters and stormwater downpipes. He deposes that attempts to obtain further documents from loss adjusters in respect of the water ingress events on 20 and 21 March 2017 and on 3 December 2017 have been unsuccessful.
21 The Brownhill affidavit refers to the Brownhill Report that had earlier been exhibited to the first Stosius affidavit. Mr Brownhill deposes that he has read the first Matthies affidavit and the Croucher affidavit and the exhibits to those affidavits and that the opinions he expressed in the Brownhill report “do not require change as a result of the contents of” those affidavits. He adds that:
“The roof of the Building is a single roof comprising different elements and materials including pitched concrete roof tiles and lower metal roofing with box gutters designed to give the appearance that the concrete roof tiles were installed across the entire roof by hiding the metal roofing and roof plant from street and neighbouring houses. All these elements of the roof are interrelated as they collectively perform the function of keeping the Building and occupants protected from the natural elements. These elements also interconnect with each other. An example of this is where the disbursement of rainwater travels down and across the concrete tiles and the metal roof into the box gutters-such as at the northern elevation of the Building on the first level.”
22 Mr Brownhill further deposes that when he inspected the aged care facility in 2019 he accessed the metal roof via a roof access hatch and that he was able to walk along the metal roof and inspect the roof generally, including the metal roof and the box gutters. He says that he “inspected the location of the metal roof described as the ‘Northern Balcony Area’ and the Roofed Terrace outside Room 5 in Mr Croucher’s Affidavit and as Mr Coghlan has apparently done in photo 13 on page 24 of the Coghlan report where water was leaking”. Mr Brownhill concludes:
· from the Croucher affidavit, the first Matthies affidavit, and the Coghlan Report that the water ingress in the location described as the “Northern Balcony Area” was a similar location as the location of water ingress occurring apparently in March 2017, as referred to in Bayside Building Services report in February 2018 and as referred to in the Coghlan Report and photograph 13 on page 28 of that report (“photo 13”);
· had a roof plumber been engaged in accordance with the recommendations in the Croucher Report, that roof plumber “could have made similar allegations about the cause of water ingress into the Building from the box gutter and metal roof (and concrete tiles) in the ‘Northern Balcony Area’ and could have made similar allegations about the non-compliant roofing system and the defective works as have been made” in the Coghlan Report.
23 Like the Brownhill affidavit, the second Stosius affidavit is primarily concerned with describing the roof system for the aged care facility. Mr Stosius says that while there are discrete sections of roofing on the building, these discrete sections of building comprise the entire roof system design and “[i]t would not be correct to conclude that each section is a separate and independent roofing system to the entire roof system of the building”. Mr Stosius deposes that the entire roof system was designed by Matthies’ architect, but that the roof plan prepared by the architect was not exhibited to either the first Matthies affidavit or the Croucher affidavit. Mr Stosius exhibits that roof plan.
24 Mr Stosius describes the roof system in terms similar to Mr Brownhill and deposes that the drainage of the roof system was designed by the architects in section 5300 of the Specifications and it included, among other things, “box guttering on the metal roof sections, rain heads, roof guttering, spreaders and downpipes”. Mr Stosius then makes a series of observations and expresses his belief about aspects of the roofing system, primarily by reference to the aerial photograph of the aged care facility exhibited to the Croucher affidavit and photo 13.
25 Among other things, he states in substance that:
· photo 13 is a photograph of the metal roof and box gutter of the western most northern balcony on level 1 of the building (and thus part of what is described in a number of the affidavits as the “Northern Balcony Area”);
· as is evident from photo 13, there is no guttering located at the base of the concrete tiles where they overlap the metal roofing and therefore rainwater hitting and falling down the concrete tiles in this northern section of the roof drains to the metal roofs and across the metal roofs to the box gutter to be drained away from the roof;
· his email of 1 June 2012 to the architect referred to roof leaks resulting from the leaves falling from neighbouring trees overhanging the metal roofs over the north balcony area, and recommended cutting back the overhanging trees and installing an additional four overflow pops above the verandas on the north side of the building (emphasis added);
· the email further explained that the reason for this recommendation was because the box gutter is continually blocking up with leaves;
· the only box gutters along the northern perimeter of the aged care facility are those installed the northern side of the metal roofs over the northern balconies on the first floor of the building;
· the area of water leaks referred to in that email was the same area where water leaks were identified in the Croucher Report as the “North Facing Balcony Terraces 2&3” and in the Croucher affidavit as “North Balcony Area”;
· the report by Bay Building Services following their inspection in February 2018 appears to refer to the same box gutter on the northern elevation as those referred to in the email of 1 June 2012 and the Croucher Report;
· the Coghlan Report includes numerous references to defects in the metal roof sections of the aged care facility and the non-compliance of every box gutter bracket including the box gutter depicted in photo 13;
· it appears that no investigation by a roof plumber as recommended in the Croucher Report was carried out before the settlement of the 2017 Proceeding;
· he believes that such an investigation would have revealed the same issues about a non-compliant roofing system as identified by Bay Building Services and in the Coghlan Report;
· the concept of a “Main Roof Structure” being distinguished from the metal roofs over the north balcony area as referred to in the Croucher affidavit, is not adopted in the Coghlan Report, which refers to:
“The roofing system provided to this building is a combination of concrete tile roofing and metal deck roofing. There are extensive installation of roof gutters servicing the main metal roof deck and to a far leer [sic] extent areas of the concrete tile roofing… My inspection will be divided into separate sections; one dealing with metal roof installations and the second dealing with concrete tile roof installations”; and
· the roof of the aged care facility “comprises many sections of different materials, all of which work together as a roofing system providing shelter for the Building occupants and dispersing rain water away from the roof system – there is no ‘Main Roof Structure’ as such”.
26 The third Stosius affidavit provides details of Mr Stosius’s qualifications and experience, and confirms that he “regularly visited the aged care facility building at Gellibrand Street Kew during its construction” and is very familiar with the design and construction of the building and its roof. He deposes that his familiarity with the roof enables him to identify what is depicted in the various photographs in evidence in this application (which includes photo 13).
The submissions
27 The parties agreed that the application would proceed by way of written submissions. The submissions filed in the application were also extensive. There are three sets of submissions on behalf of Stosius and two on behalf of Matthies. In its primary submissions, Stosius identifies the grounds for its application as follows:
· an Anshun estoppel prevents Matthies from bringing the 2019 Proceedings;
· alternatively, the claims of defective workmanship in the 2019 Proceedings are captured in the release contained in the Deed of Settlement;
· a res judicata arises from the settlement of the 2017 Proceedings and the application of the Onerati principle; and
· alternatively, it would be an abuse of process to allow Matthies to claim damages for the costs of rectification of defects in the 2019 Proceeding if they were included in the 2017 Proceeding.
28 Stosius next sets out the test to be applied under ss62 and 63 of the Civil Procedure Act 2010 (Vic) (“CPA”) as stated by Warren CJ and Nettle JA in in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 (“Lysaght”) and repeated on numerous occasions since. It is unnecessary to do so again, except to emphasise that:
· on the one hand, that “the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel”;
· but, on the other, that “it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried”.
29 Matthies also includes lengthy submissions on the test, including a discussion of the history of ss63 and 64 of the CPA and the Queensland authorities that formed the basis of the reasoning of the Court of Appeal in Lysaght. It asserts that the interests of justice do require the matters in the 2019 Proceeding to be investigated and proceed to trial, thus invoking the court’s discretion under s64 of the CPA. However, its submissions on the test do not otherwise differ materially from those advanced by Stosius. I note that in its reply submissions, Stosius rejects the suggestion that it would be in the interests of justice to allow the 2019 Proceeding to go to trial, given Matthies “entirely unreasonable conduct” in effectively bringing the same claims twice.
Anshun estoppel
30 Stosius submits that three elements must be satisfied in order to establish an Anshun estoppel (citing Solak v Registrar of Titles (No. 2) [2010] VSC 146 at [8] – [12]), as follows:
· the cause of action which a party seeks to assert in a later proceeding must be one that could have been raised in the earlier proceeding;
· it must appear that the same, or substantially the same, facts will arise for consideration in the second, as in the first, proceeding;
· it must have been unreasonable for the party seeking to raise an issue in later proceedings to not have raised the issue in the earlier proceeding, which assessment necessarily will depend almost entirely on the circumstances of the case.
31 Stosius then discusses each of these elements in turn. First, it argues that the same cause of action arises in the 2019 Proceeding as it did in the 2017 Proceeding; namely Stosius’ alleged breach of the building contract causing the water ingress into the aged care facility and Matthies’ loss and damage in the nature of the costs of rectification. In this regard, it emphasises the passages on pages 17 and 18 of the Croucher Report extracted above, referring to the need for “extensive flood testing” and other “further investigation” by a roof plumber. It then asserts (in substance) that engaging a roof plumber as recommenced by Mr Croucher and as is commonplace in cases like this, would have identified the very matters alleged in the Coghlan report and on which the 2019 Proceeding relies.
32 Second, Stosius lists a total of nine matters that it asserts arise for consideration in both proceedings. These include the building contract, the scope of works, the roof design, the performance of the roof plumbing works, defects or non-compliance of flashings, overflows, drains and box gutters leading to water ingress and the cost of rectification. Third, that based on these matters, it was unreasonable for Matthies not to have included in the 2017 Proceeding the claims it now makes in the 2019 Proceeding. In supporting this third element, it again references concerns about water ingress dating back to 2010 and Matthies’ failure to engage a roof plumber during the course of the 2017 Proceeding as recommended by Mr Croucher, despite having ample opportunity to do so.
33 In its submissions in response, Matthies asserts that the defects in the 2017 Proceeding are “unrelated” to the defects in the 2019 Proceeding. It says that the evidence shows that:
“The roof (main roof) was not inspected at the time and there were no events that necessitated and [sic] inspection of the roof (main roof). The concern with “the roof” in the 2017 Proceeding were the balcony / terraces with corresponding portico. The terrace areas may have functioned as a roof (providing shelter to the area under the extended balconies), they are not part of the general roof.”
34 This distinction between the roof over the terrace areas and portico, on the one hand, and what Matthies variously terms the “main roof”, “main roof structure” and “general roof”, on the other, is central to this and the other arguments it makes in opposition to Stosius’ application. In the context of the Anshun estoppel argument, it first cites a passage from the decision of Hollingworth J in Equuscorp Pty Ltd & Anor v Acehand Pty Ltd & Ors [2010] VSC 89 at [83] (which, to my mind, is to the same effect as the authorities cited by Stosius). The passage is as follows:
“An Anshun estoppel may arise where a matter sought to be raised by way of claim or defence in a later proceeding is so closely connected with the subject matter of an earlier proceeding, that it was to be expected that it would have been relied upon in that earlier proceeding. No such estoppel arises unless it appears that the matter relied upon in the later proceeding was “so relevant to the subject matter of the first action that it would have been unreasonable not to rely upon it.”
35 Matthies then asserts that the defects in the 2019 Proceeding are not closely connected, or so closely connected to the 2017 Proceeding, that it would be expected that such matters would be included in the earlier proceeding, relying on the following five features of the defects identified in the 2019 Proceeding:
· they were never inspected prior to 2018;
· they did not “reveal themselves” until after the settlement of the 2017 Proceeding:
· Matthies had no reason to suspect that the “Main Roof Structure” was defective until 3 December 2017;
· Matthies had no knowledge that the “Main Roof Structure” was defective until 18 September 2018; and
· Stosius advised Matthies of failures to adhere to a maintenance schedule and gutter cleaning relating to the terraces on the northern side of the building (which were part of the 2017 Proceeding).
36 Matthies then asserts that:
“Having regard to the principle of Anshun estoppel the relevant enquiry in relation to the 2017 Proceeding requires an analysis of the defects known at the time, whether it was unreasonable not to have known about the roof defects the subject of the 2019 Proceeding in 2017 and, whether these defects fell within the defects included in the 2017 Proceeding and or ought to have been detected by the Plaintiff and or the, the Plaintiff assumes, the expert engaged by it at the time of the 2017 Proceeding… As revealed by the Matthies Affidavit and the Croucher Affidavit, the defects in the 2019 Proceeding are unrelated to the 2017 Proceeding defects.
37 Stosius makes a number of points in reply to these submissions, which it says clearly demonstrate that claims arising on the 2019 Proceeding are so connected to the 2017 Proceeding, that it was unreasonable for them not to be raised in that earlier proceeding. In summary, those point are:
· the subject matter of both proceedings concerned the ingress of water into the building and its cause by the metal roof on the building;
· leaks and the location of the defects in the box gutters and metal roof over the level 1 north facing balconies were identified in Stosius’ email sent on 1 June 2012, the Croucher Report, the March 2017 water ingress incident, the Bay Building Services Report and the Coghlan Report;
· the suggestion that metal roofs over the level 1 north facing balconies were not part of the “general roof”, is contradicted by the roof plan, photo 13, the photos in the Coghlan Report and Mr Stosius’ affidavits, which show that these roofs and the concrete tile roof are connected in their design, their construction and their function and performance;
· in particular, photo 13 and the roof plan show that rainwater runs off the concrete tiles onto the metal roof and to the perimeter box gutters;
· the development in the Matthies affidavits of the distinction between the “Main Roof Structure” (or the “main roof”) and the metal roofs over the level 1 north facing balconies is not supported by the physical evidence and design of the roofs;
· the roofs of the level 1 north facing balconies form part of the entire roof and they perform in conjunction with the concrete tiles on the roof – an inspection and detailed investigation by a roof plumber as recommended by Mr Croucher would have enabled Matthies to see the operation and performance of the roof in its entirety and determine the cause of the ingress of water, as identified in the Croucher Report;
· Matthies was thus put on a train of inquiry by Mr Croucher’s recommendation to investigate the cause of water ingress at the building generally;
· there is no evidence confirming whether or not Matthies acted upon Mr Croucher’s recommendation before the settlement of the 2017 Proceeding;
· doing so would have informed and disclosed to Matthies all of the alleged defects referred to in the Coghlan Report before settlement of the 2017 Proceeding and led to those defects being claimed in that proceeding; and
· Matthies’ conduct in failing to include the defects in the Coghlan Report in the 2017 Proceeding could lead to Stosius’ consequential claims for apportionment and contribution being statute barred.
38 In its responsive submissions, Matthies begins by objecting to various paragraphs of the second Stosius affidavit and the Brownhill affidavit. Its particular objections are listed in a schedule to its submissions, and include matters such as Mr Stosius “asserting conclusions of fact” as to the meaning of “entire roof system” and the location of leaks and photographs. Matthies then submits that, relying on inadmissible evidence, Stosius asserts an Anshun estoppel on the basis that the roof of the aged care facility “should be deemed a single roofing system, rather than a number of discretely identifiable components”. It argues that Stosius is asserting:
· meanings (both factual and technical) as to the term “roof system”; and
· that, “when a defect is identified in a discretely identifiable separate component of the roof system, such a defect means there is knowledge of defects in the roof system as a whole”.
39 It concludes on this issue by submitting that on the question of Matthies’ knowledge of defects as at the time of the settlement of the 2017 Proceeding, Mr Matthies’ evidence should be preferred and that:
“At its highest, the First Defendant’s material now seeks to assert that the Plaintiff should have been aware of circumstances to enquire as to the quality of the Main Roof Structure. This is a matter for trial, not for summary determination.”
40 In its final submissions, Stosius takes issue with Matthies’ evidentiary objections (particularly in relation to Mr Stosius identifying the location of photographs). It says that (omitting citations):
“Where Anshun estoppel is in issue, a broad merit based judgment that takes account of all the facts of the case is required and involves a wider ambit of evidence than the evidence relevant to res judicata or issue estoppel. The First Defendant’s application was simply put and was based on the leaking roof of the aged care building due to allegedly defective workmanship of the First Respondent. There is only one roof and there is only one building as is evident from the evidence before the Court.
41 Stosius concludes by submitting that the evidence clearly establishes what would have been apparent upon a detailed investigation of the roof as recommended by Mr Croucher in 2016 and that Matthies has “elected not to put on any evidence about that issue despite it being critical to the reasonableness of its conduct in not acting upon Mr Croucher’s recommendation”. It submits that (citations omitted):
“Indeed, the Plaintiff’s failure to act on Mr Croucher’s evidence and undertake a detailed investigation of the roof has never been explained and the Court should readily conclude that the Plaintiff’s failure to include the defects in Mr Coghlan’s report in the 2017 Proceeding arose from the Plaintiff’s “negligence, inadvertence, or even accident” as referred to in the judgment of Sir James Wigan VC in Henderson v Henderson which was approved in Anshun by the High Court”.
Deed of Settlement
42 There is considerable overlap between the matters relied on by both parties in relation to the Anshun estoppel ground summarised above and the submissions on the remaining three grounds, so I will deal with these more briefly. This ground essentially depends on the proper construction of the release provision in the Deed of Settlement. In its primary submissions, Stosius argues that “the context of the circumstances leading up to the execution of the Deed of Settlement, is an important indicia to the correct interpretation of the Deed of Settlement”. After referring to aspects of that context (including that the settlement was a once and for all resolution of allegations of defective workmanship), it argues that:
“It is clear from the express language of clause 10 that the parties did not understand the meaning of the words “in relation to all of the defects alleged in this proceeding” was limited to the Croucher Report as the sentence then included reference to the Croucher Report. The proper interpretation of clause 10 is that the “defects” captured by the release were broader than those defects specifically referred to in the Croucher Report – otherwise, if the “all of the defects alleged in this proceeding” was limited to the Croucher Report then it was unnecessary to include the inclusionary words “including, without limitation all the defects alleged in the report of Mr Tony Croucher filed in the proceeding.”
43 For its part, Matthies points to examples of language that was not used in the Deed of Settlement (and the release in clause 10 in particular), to argue that the “clear intention of the parties” was to release Stosius only in respect of the items specified in paragraph 9 of the statement of claim and the defects identified in the Croucher Report. It asserts that the release clearly did not extend beyond these discrete identified items and, consequently, “it cannot be said that the release was a ‘final decision’ in relation to the roof (general roof) the subject of the 2019 Proceeding”.
44 Matthies sets out at length the principles applicable to construing releases, including that (citations omitted):
“Although there are no special rules of construction, such as a contra proferentem requirement, in the absence of clear language courts have been slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware.”
And:
“[I]t may well be appropriate to imply an obligation upon the beneficiary of such a release to disclose the existence of claims of which it actually knows and which it also realizes might not be known to the other party.”
45 Matthies next refers to what it asserts is the “relevant background knowledge for the construction of the [re]lease”, being the matters in the 2017 Proceeding, which are “clearly different to the 2019 Proceeding”. It submits that, in the absence of clear words to the contrary, general words in a release are limited to what was specifically in the contemplation of the parties at the time the release was given. It says that the indicia of such contemplation in this case is the clear difference between what was included within the 2017 Proceeding when compared with the 2019 Proceeding.
46 In this context, Matthies asserts that the defects that are the subject of the 2019 Proceeding were “latent defects” that Matthies was not aware of “as the roof was never inspected and further there was no cause and or reason to inspect the roof”. Therefore, it cannot be said that the causes of action relied on in the 2019 Proceeding were in contemplation and thus merged in the Deed of Settlement. I would add that, at present, the evidence of what was in the contemplation of the parties is limited to the contemporaneous documents and the curated and selective affidavits on behalf of both parties.
47 Matthies also observes that Stosius’ material is silent regarding its knowledge as at the execution of the Deed of Settlement of any issues or concerns it knew of and/or suspected concerning the roof, its construction and/or performance. Further, there is no evidence of Stosius communicating such concerns to Matthies. Rather, Stosius was essentially communicating maintenance issues. Matthies submits that depending upon Stosius’ knowledge “which will only be revealed at trial”, this may be a case where Stosius as the beneficiary of such a release, had an obligation to disclose the existence of claims of which it knows and which it also realises might not be known to Matthies.
48 In its reply submissions, Stosius asserts that Matthies’ argument about Stosius’ knowledge of more extensive defects in the roofing system as at the execution of the Deed of Settlement, are “irrelevant to the construction of the release”. The later submissions of both parties otherwise add nothing of substance to the arguments on this ground in the parties’ primary submissions.
Res Judicata
49 Stosius submits that a settlement of an earlier legal proceeding can create a res judicata in respect of a later proceeding between the same two parties in respect of the same cause of action, citing Wells v D'Amico [1961] VR 673 and Dugonjic v Stegbar Pty Ltd [2014] VCC 799 at [79], per Macnamara J. It then submits that, to determine whether a res judicata is created by the execution of the Deed of Settlement, it must be established that the cause of action relied upon by Matthies in the 2019 Proceeding is the same as the one it relied on in the 2017 Proceeding. This, in turn, engages essentially the same arguments concerning the alleged overlap of the claims in both proceedings as are canvassed above in discussing the Anshun estoppel ground.
50 Stosius then develops a gloss on its broader res judicata argument, which it labels the “Onerati principle”, based on the decision of Giles J of the NSW Supreme Court in Onerati v Phillips Constructions Pty Ltd (In liq) (1989) 16 NSWLR 730. This case involved alleged defects in the construction of five home units. The builder commenced an arbitration and in the arbitration the owner cross-claimed for defective work. After the arbitration, the owner discovered additional defects. Giles J held that the doctrine of res judicata was a bar to the owner commencing a second arbitration. As Stosius has submitted, Giles J summarised the law as follows (at p746):
“1.In curial proceedings, for the purposes of the principle of res judicata there is but one cause of action for breach of contract founded upon breach of a promise such as to carry out work in a workmanlike manner. There are not a number of causes of action according to particular defects or classes of defect resulting from the breach.
2.Accordingly, judgment in one proceeding will be a bar to second proceedings to recover damages with respect to defects or classes of defect not the subject of the first proceedings.
3.This will be so even where the defects or classes of defects the subject of the second proceedings were not apparent to the plaintiff at the time of the first proceedings.
4.The same position obtains for arbitrations unless on the proper construction of the agreement for reference the parties have agreed that the award shall determine their rights and obligations only with respect to the defects or classes of defect referred while leaving their rights and obligations with respect to other defects or classes of defect unaffected.”
51 Stosius submits that Giles J found that there was a res judicata “because the owners had attempted in the second proceedings to litigate a cause of action which had merged into judgment in the prior proceedings”. It then goes on to discuss both the origins of Giles J’s analysis, and references to the principle in later cases, including in the NSW Court of Appeal and in the Victorian Supreme Court.
52 Matthies argues that the effect of Stosius’ submission on res judicata is that the Deed of Settlement was a final determination of the rights between the parties giving rise to (citations omitted):
“a cause of action estoppel in accordance with principles governing res judicata (literally the "thing", the cause, having been decided), and what the First Defendant describes as the application of the Onerati principle (the Plaintiff submits that there is no ‘principle’ established by Onerati, rather it is an example of the application of the doctrine of res judicata.”
53 Unsurprisingly, Matthies’ response to Stosius’ general res judicata submission otherwise relies on essentially the same arguments that it advances in response to the Anshun estoppel ground. After setting out a lengthy passage from the decision of the High Court in Rogers v The Queen [1994] 68 ALJR 688 at 699, it submits that:
“For the reasons specified above the 2017 Proceeding and Terms of Settlement was not a final decision concerning the matters in the 2019 Proceeding. The 2017 Proceeding is limited to the matters described within, or reasonably related to, it. Since the defects the subject of the 2019 Proceeding could not reasonably have been discovered at the time of the hearing of the first claim, there appears to be no basis for an estoppel and as the 2019 Proceeding matters are not related to the 2017 Proceeding, the Plaintiff is not ‘re-litigating’ an issue that has already been determined. Consequently, res judicata does not apply.”
54 In its reply submissions, Stosius repeats the assertion that a settlement of a proceeding can create a res judicata and that, in this case, the cause of action relied upon by Matthies in the 2019 Proceeding is the same as the one upon which Matthies relied in the 2017 Proceeding. Stosius also asserts that Matthies “has not provided any submission to rebut the application of the principles enunciated in Onerati’s case”. In response, Matthies submits that the principles of res judicata do not arise because the 2017 Proceeding and subsequent Deed of Settlement were not a final determination of rights. It then in substance repeats its arguments concerning what it says were the express limits to the defects alleged in the 2017 Proceeding and released under the Deed of Settlement.
55 In its further reply submission, Stosius seeks to frame Matthies’ submissions as an argument that:
“res judicata only arises where all of the rights of the parties have been determined in the earlier proceeding – not just some of their rights. And, therefore, a plaintiff building owner is free to commence repeated legal proceedings against a builder in the 10 year limitation period for different defects or different breaches of the building contract…for whatever reason.”
56 After referring again to authority discussing the history of res judicata and the operation of the “three inter-related but conceptually distinct estoppels arising in res judicata (i.e. cause of action estoppel, issue estoppel and Anshun estoppel)”, Stosius submits that:
Applying the principles of cause of action estoppel correctly, the Plaintiff’s cause of action in the 2017 Proceeding is the same as the cause of action in the 2019 Proceeding – the discrete and specific defects in the Croucher Report do not create a different cause of action in the 2017 Proceeding to the cause of action in the 2019 Proceeding which refers to the defects in the Croucher Report… Further, the causes of action in both proceedings are the same because the Plaintiff has only one cause of action according to the principles enunciated in principle in Onerati…As a consequence, the solitary cause of action available to the Plaintiff was the subject of the 2017 Proceeding and was settled by the Deed of Settlement. Its settlement creates a res judicata”.
Abuse of Process
57 As I understand this ground, it is limited to the particular defects identified in the Croucher Report which Stosius alleges are repeated in the Coghlan Report. Thus a finding in favour of Stosius on this ground would not dispose of the entire proceeding. Having said that, Stosius’ description of the defects said to be covered by both reports is very general (focussing in particular on the box gutters). On one view, it leaves little if anything from the Coghlan report that is untouched by the Croucher report. In reply, Matthies repeats its assertions that the two reports cover discrete defects and, as Matthies is not re-litigating a previously resolved matter, there is no abuse of process.
Analysis
Summary
58 The determination of this application has been far from straightforward. The evidence is technical and the legal arguments are detailed and complex. Sometimes that is reason enough to conclude that a summary determination is not appropriate. However, the CPA mandates the efficient, timely and cost-effective resolution of the real issues in dispute in a proceeding, and complexity alone should not be treated as a bar to summary determination where sufficient grounds are established. I have therefore given earnest consideration to the arguments on both sides. There seems to me to be real difficulties with Matthies’ claims in this proceeding for the reasons advanced by Stosius, as discussed further below. However, despite the adoption of a more liberal test since Lysaght, the threshold for summary determination is still high. With more than a little hesitation, I have concluded that I cannot be satisfied that Matthies’ claim has no real prospects of success.
59 Having reached that conclusion, it is well established that it is undesirable for a court to give detailed reasons: Becton Corporation Pty Ltd v Tricontinental Corporation Ltd (VSC O'Bryan J, 11 February 1991, unreported), cited with approval by the Full Court in Hills v Sklivas [1995] 1 VR 599 at 609. In that case, Batt J held that: “...the nature of the procedure under O.22 makes it undesirable if the Court gives the defendant leave to defend that it should give detailed reasons for doing so”. Clearly this applies equally to where the court permits a plaintiff’s claim to proceed to trial. But in deference to the detailed submissions of the parties and because it is relevant to the question of costs (and should the application go further), I propose to identify the factors that led me to that conclusion, and make some brief observations about the competing arguments.
Anshun estoppel
60 In my view, Stosius’ arguments in support of its defence based on Anshun estoppel have considerable force. There is no real dispute between the parties as to what Stosius must show to make good that defence. Further, Matthies does not assert that the defects alleged in the 2019 Proceeding did not arise at the time of the 2017 Proceeding. And, with the exception of the debate about the “Main Roof Structure” discussed below, Matthies does not argue against Stosius’ assertions about a substantial factual overlap in the two proceedings. Thus, the success of the defence turns essentially on whether Stosius can establish that it was unreasonable for Matthies not to have raised the claims in the 2019 Proceeding as part of the 2017 Proceeding. Indeed, Matthies appears to concede that Stosius will succeed if it can show that:
· it was unreasonable for Matthies not to have known about the roof defects, the subject of the 2019 Proceeding in 2017;
· these defects fell within the defects included in the 2017 Proceeding; and/or
· the defects ought to have been detected in 2017 by Matthies or by Mr Croucher.
61 Matthies maintains that these are not established because “the defects in the 2019 Proceeding are unrelated to the 2017 Proceeding defects”. Stosius argues that the relationship is established by the fact that both proceedings concerned water ingress involving the metal roofs on the building, and notably the box gutters forming part of those metal roofs. Stosius also points to potential defects causing that water ingress being identified in Stosius’ email sent on 1 June 2012, the Croucher Report, the March 2017 water ingress incident, the Bay Building Services Report and the Coghlan Report. But Matthies asserts that these factors do not create the necessary relationship in substance because:
· the defects alleged in the 2019 Proceeding relate to the so-called “Main Roof Structure”, whereas the 2017 Proceeding concerned different and distinct roofing elements, namely, the metal roofs over the north facing balconies and the entry portico that “are not part of the general roof”; and
· Matthies had no reason to inspect the “Main Roof Structure” before settlement of the 2017 Proceeding and therefore had no knowledge or reason to suspect the alleged defects in that “Main Roof Structure”.
62 As to the first of these matters, Stosius submits that the distinction between the “Main Roof Structure” and the metal roofs over the level 1 north facing balconies is not supported by the physical evidence and design of the roofs. It refers in particular to photo 13 and the roof plan showing that rainwater runs off the concrete tiles onto the metal roof and to the perimeter box gutters. Matthies has objected to aspects of the affidavit evidence supporting that submission. In my view, most of those objections are without substance, particularly as they relate to Mr Stosius’ identification of the location of the photographs. Further, to the untrained eye, photo 13 does appear to show no discernible separation (at least from a drainage perspective) between the concrete tiles and the metal roof over the north facing balcony roof leading to the allegedly defective box gutter.
63 However, and notwithstanding the evidence of Mr Stosius and Mr Brownhill about these matters, I cannot exclude the possibility that there is a factually sound basis for distinguishing between the roofing elements discussed in the Croucher report and the so-called “Main Roof Structure”. It seems to me that forming a concluded view on this would at least require cross-examination of Mr Croucher and Mr Brownhill about their respective positions, aided by either an inspection of the roof or more comprehensive photographic evidence. It would also be assisted by evidence from Mr Coghlan, who notably does not appear to subscribe to the concept of “Main Roof Structure” as distinct from the metal deck roofs over the north facing balconies. At most he refers to the roof being made up of concrete tiles and metal deck roofing. Indeed, definitive evidence from Mr Coghlan (or an independent roof plumbing expert) that the box gutter design faults that he identifies in the Coghlan Report extend to the box gutters at the northern edge of the north facing balconies, could be decisive.
64 Turning to the second matter, Stosius argues that there were several factors that should have put Matthies on a train of enquiry before the settlement of the 2017 Proceeding that would have led to discovery of the defects now alleged in the 2019 Proceeding. The most compelling of these is Mr Croucher’s recommendation that Matthies engage a roof plumber to investigate the leaks that he observed in the ceilings of the north facing balconies, including by carrying out “extensive flood testing”. Given Mr Coghlan’s findings, it is difficult to imagine how a competent roof plumber so engaged would have overlooked (at least) the alleged defects in the box gutters over the north facing balconies and then sought to ascertain if box gutters elsewhere were similarly affected. Again, however, I cannot exclude the possibility that cross-examination of Mr Brownhill or independent expert evidence from a roof plumber could support a finding that the investigations proposed by Mr Croucher would not have revealed design faults of the kind referred to in the Coghlan Report.
Deed of Settlement
65 This ground is more easily disposed of for the purpose of this application, although that is not to say that Matthies’ answer to it is any more persuasive. Rather, it is clear that it turns on the proper construction of the release provisions in the Deed of Settlement. And it is also clear (and both parties effectively concede) that the construction exercise will necessarily involve examination of the context and surrounding circumstances. Much of that is supplied by the contemporaneous documents, and notably the pleadings in the 2017 Proceeding and the Croucher Report. However, it is possible that more may be supplied by the evidence of those involved in the negotiation and drafting of the Deed of Settlement. Not, of course, to ascertain their subjective intent, but to identify any objective factors that may have influenced particular drafting choices. For example, why did the drafter of the release in clause 10 not use the term “defective works” defined in recital C and instead adopt an apparently non-exhaustive definition, which Stosius argues extends the release beyond the defects identified in the Croucher Report?
66 To my mind, this is sufficient to preclude a finding that Matthies has no real prospects of success on this ground. For example, I cannot exclude the possibility that evidence could be adduced to the effect that the parties specifically contemplated the need to ensure that the release did not go beyond the particular defects identified in the Croucher Report. I also cannot exclude the possibility (as submitted by Matthies) of evidence being adduced that Stosius had knowledge of more widespread defects. That in turn may enliven an argument on behalf of Matthies that the release should not be construed as applying to something of which Matthies was ignorant. Finally, examination of the construction question will also raise at least some of the same technical issues discussed above about precisely what defects the Croucher Report covers.
Res judicata
67 The determination of this ground is confounded by the fact that the 2017 Proceeding did not resolve by a final determination by a court of the issues in that proceeding, but by the execution of the Deed of Settlement. I agree with Stosius that a settlement of an earlier legal proceeding can create a res judicata in respect of a later proceeding between the same two parties in respect of the same cause of action, and I did not understand Matthies to submit otherwise. Rather, as I understand it, Matthies’ argument is to the effect that the terms of the settlement set the parameters of the application of the principles in a particular case. In other words, an earlier proceeding resolved by a settlement agreement only determines rights of the parties to the extent provided by that agreement.
68 Although not part of Matthies’ submissions, it seems to me that this argument draws some support from Giles J’s summary of the law in Onerati. His Honour observes that judgment in one proceeding will be a bar to a later proceeding “even where the defects or classes of defects the subject of the second proceedings were not apparent to the plaintiff at the time of the first proceedings”. He then states:
“The same position obtains for arbitrations unless on the proper construction of the agreement for reference the parties have agreed that the award shall determine their rights and obligations only with respect to the defects or classes of defect referred while leaving their rights and obligations with respect to other defects or classes of defect unaffected”.
69 In my view, the same can be said of a proceeding determined by a settlement agreement, where on the proper construction of that agreement, the parties have agreed that the settlement applies only to specified defects, leaving other classes of defects unaffected. For that reason, it seems to me at least reasonably arguable that the res judicata ground raises for determination the same questions as arise for determination of the Deed of Settlement ground. I have explained above why I cannot be satisfied on the evidence as it stands that Matthies has no real prospects of success in arguing that its claims in the 2019 Proceeding are foreclosed by the Deed of Settlement.
Abuse of process
70 I have noted above that, as I understand it, even on Stosius’ case this ground does not provide a defence to all of the claims in the 2019 Proceeding. For those that it does, in my view, it does not rise higher than the arguments based on Anshun estoppel. Accordingly, for the reasons discussed in relation to that ground, I cannot be satisfied that Matthies has no real prospects of success in opposing Stosius’ abuse of process arguments.
Costs and orders
71 I have considered carefully all of the competing arguments on costs on applications by a defendant for summary judgment pursuant to s62 of the CPA canvassed by Derham AsJ in Towercom Pty Ltd v Fahour (No 4) [2013] VSC 585, with his Honour’s usual thoroughness and clarity. I would, with respect, adopt without repeating his Honour’s analysis of the applicable law, most notably his Honour’s cautionary statement that it must be steadily borne in mind that my discretion is not confined by any practice. In particular, I do not adhere to the view that the “usual order” in applications for summary judgment is that costs be costs in the cause. Rather, the order depends on the circumstances of each case.
72 I began this part of my ruling by observing that the determination of this application has been far from straightforward. I also noted that, to my mind, there are real difficulties with Matthies’ claims for the reasons advanced by Stosius. Further, the arguments raised on this application will all arise again in largely the same terms at trial. Accordingly, the substantial work the parties have done in advancing those arguments before me will no doubt be refined and supplemented as a result of the evidence at trial, but need not be repeated.
73 In the circumstances, I am satisfied that Stosius cannot be said to have known the application had no reasonable chance of success. On the contrary, as I have observed, there is considerable force in a number of the arguments it has advanced. Accordingly, unless either party can bring to my attention any matter relevant to the question of costs that is not apparent from the pleadings, affidavits and submissions, or from Derham AsJ’s analysis of the applicable law, I propose to order that:
· The first defendant’s application by summons dated 17 February 2020 is dismissed.
· The costs of and incidental to the application are the plaintiff and first defendant’s costs in the cause.
Certificate
I certify that these 31 pages are a true copy of the ruling of His Honour Judge Woodward delivered on 26 May 2020.
Dated: 26 May 2020
Claire Findlay
Associate to His Honour Judge Woodward
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