McCloskey v Nexis Accountants Pty Ltd
[2023] ACTSC 41
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | McCloskey v Nexis Accountants Pty Ltd | ||
| Citation: | [2023] ACTSC 41 | ||
| Hearing Date: | 23 February 2023 | ||
| Decision Date: | 23 February 2023 | ||
| Before: | McCallum CJ | ||
| Decision: | (1) The hearing listed on 6 March 2023 at 10 am is vacated. (2) Each party is to bear their own costs of the application and those thrown away as a result of the hearing being vacated. (3) The plaintiffs are to file and serve expert evidence in reply by 30 April 2023. (4) List the matter at 9:30am on 5 May 2023 before the Registrar in the civil directions list. | ||
| Catchwords: | CIVIL LAW – CIVIL PROCEDURE – Expert evidence – Service of expert reports – where leave was granted for the defendant to serve an expert report out of time – where the plaintiff seeks to have hearing date vacated for time to serve an expert report in reply – history of breach of orders by defendant – whether the hearing date should be vacated | ||
| Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 1205, 1241, 1401 | ||
| Cases Cited: | Glover v Fuller [2022] ACTSC 144 Pryce v Dunlap [2016] ACTSC 338 Smith v Children Australia Inc [2022] ACTSC 310 | ||
| Text Cited: | Practice Direction No 2 of 2014, ACT Supreme Court | ||
| Parties: | Steven McCloskey (First Plaintiff) SM Precision Building Services Pty Ltd (ACN 144 883 652) (Second Plaintiff) Nexis Accountants Pty Ltd (ACN 108 623 338) t/as Nexis Accountants and Business Advisors (Defendant) | ||
| Representation: | Counsel C Erskine SC (Plaintiffs) M Wells (Defendant) | ||
| Solicitors Aulich (Plaintiffs) Kanther Law (Defendant) | |||
File Number: | SC 175 of 2021 |
McCALLUM CJ:
These proceedings were listed for hearing commencing on 6 March 2023 with an estimate of 5 days. On 23 February 2023, the plaintiff filed an application to have the hearing date vacated. I heard brief argument on the application and proposed to rule on it later in the day after the conclusion of other business of the Court.
In the meantime, the parties resolved the application; the defendant consenting to application and the parties agreeing that each party was to bear their own costs of the application and those thrown away as a result of the hearing being vacated.
I nonetheless wish to record my reasons for indicating, as I did in relatively strong terms before the application was resolved, that the hearing date had to be vacated.
The plaintiffs served an expert report on 12 July 2022. That report had been served about three weeks late and accordingly the plaintiffs consented to a reciprocal extension of time for the defendant to serve any expert evidence. Thereafter, three deadlines for service of the defendant’s expert evidence were missed. The third deadline was 4 October 2022.
The direction permitting the defendant to serve expert evidence by that date was made after the plaintiffs relisted the proceedings in accordance with Practice Direction No 2 of 2014.
Before the matter was relisted, the plaintiff had warned the defendant that they would be preparing affidavit material based on any expert report served by the defendant. In light of that indication, when the third deadline was fixed, the Deputy Registrar also made a peremptory order that, if the defendant did not file its expert evidence by 4 October 2022, it would have to seek leave of the Court to file such evidence.
The defendant did not even commission an expert report until 7 November 2022, over a month after the third deadline. That report was served on 24 November 2022, shortly before the parties were due to participate in a mediation. Following the failure of the mediation, the defendant of course required leave to rely on the expert report that had been served.
For reasons that remain unexplained, the application for leave was not provided to the Court until 13 December 2022, the last week of the law term. It was accepted by the Registry on 19 December 2022. The application was heard by Loukas-Karlsson J on 10 February 2023. Her Honour granted leave to the defendant to rely on the report. Her Honour evidently reserved her reasons.
Contrary to a remark I made at the brief hearing of the application to vacate the hearing date, I accept that the application determined by Loukas-Karlsson J was not governed by r 1241 of the Court Procedures Rules 2006 (ACT). That is because the order of the Deputy Registrar imposed no more than a requirement for leave. To the extent that I suggested otherwise during argument, I was mistaken.
The history I have recorded nonetheless shows a disregard on the part of the defendant for the purpose of the rules governing the service of expert reports. The conduct of the defendant in failing to seek leave to rely upon its very late report had the inevitable result that the hearing date had to be vacated.
To be clear, any party seeking to rely on expert evidence in proceedings in this Court should be mindful of the following principles.
First, any expert opinion, at least as to liability, should ideally be obtained before a plaintiff even makes a decision to commence proceedings, although that is not always achievable: cf Smith v Children Australia Inc [2022] ACTSC 310 at [12].
Secondly and in any event, directions as to the service of expert evidence should be sought, as contemplated by r 1205 of the Court Procedure Rules, at an early stage and certainly well in advance of the listing hearing.
Thirdly, a party that has failed to serve an expert report in accordance with a direction of the Court may seek a further direction for the service of expert reports under rr 1205 or r 1401 of the Court Procedure Rules: see Pryce v Dunlap [2016] ACTSC 338 at [7]; Glover v Fuller [2022] ACTSC 144 at [7]; Smith v Children Australia Inc at [9]. However, where (as here) the application is brought at a time when it is likely to kybosh the hearing, the Court should be slow to grant leave having regard to the clear purpose of the special rules about the service of expert reports (considered in Smith v Children Australia Inc).
Fourthly, where a party seeks after the commencement of a hearing to rely on a report that has not been served in accordance with r 1205, it will be necessary for that party to establish the existence of exceptional circumstances that justify giving leave (unless the report only updates the earlier version of a report served in accordance with the rule): r 1241(4).
The orders made by consent were:
(1) The hearing listed on 6 March 2023 at 10:00am be vacated.
(2) Each party is to bear their own costs of the application and those thrown away as a result of the hearing being vacated.
(3) The plaintiffs are to file and serve expert evidence in reply by 30 April 2023.
(4) List the matter at 9:30am on 5 May 2023 before the Registrar in the civil directions list.
Had the matter not been resolved, I would have called upon the defendant to say why it should not pay the plaintiff’s costs thrown away by reason of the vacation of the hearing date.
| I certify that the preceding seventeen [17] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice McCallum Associate: Date: 14 March 2023 |
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