Novawest Contracting Pty Ltd v Altona Industrial Centre

[2010] VCC 1804

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
COMMERCIAL LIST

BUILDING CASES DIVISION

Case No. CI-09-05262

NOVAWEST CONTRACTING PTY LTD	Plaintiff
(ACN 056 379 929 )
v
ALTONA INDUSTRIAL CENTRE PTY LTD	First Defendant
(ACN 003 737 424)
and
CPG AUSTRALIA PTY LIMITED	Second Defendant
(ACN 050 029 365)

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JUDGE:	HIS HONOUR JUDGE GINNANE
WHERE HELD:	Melbourne
DATE OF HEARING:	24 November 2010
DATE OF JUDGMENT:	3 December 2010; Revised 16 December 2010
CASE MAY BE CITED AS:	Novawest Contracting Pty Ltd v Altona Industrial Centre Pty Ltd and CPG Australia Pty Limited
MEDIUM NEUTRAL CITATION:	[2010] VCC 1804

REASONS FOR JUDGMENT

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Catchwords: PRACTICE – failure of counterclaim to plead relevant date – extension of date for practical completion of building contract – issue of notice to produce to obtain documents that may contain date – whether notice to produce valid – fishing – oppressive – County Court Rules of Civil Procedure, Rule 1.14, 35.08.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr K P Hanscombe SC and	Patrick J Cannon Coburn &
Mr T Cordiner	Associates
For the Defendants	Mr M Settle	HorseForce Legal
HIS HONOUR:

1          There are two summonses before the Court, both issued on behalf of the plaintiff/defendant by counterclaim, the first of which, dated 27 October 2010, seeks that the defendants’ counterclaim be struck out, and the second of which, of 8 November 2010, seeks an order that the defendants’ Notice to Produce dated 3 November 2010 be set aside.

2          The relevant parts of the Further Amended Counterclaim which is sought to be set aside deal with pleading the date for practical completion of work.

3          The proceeding concerns building work carried out at the Altona Gardens Estate in Kororoit Creek Road, Altona, by the plaintiff, Novawest Contracting Pty Ltd (“Novawest”). Novawest sues on a primary contract dated October 2003 which is said to be a contract for the provision of road and drainage works, reticulation works for the first three stages of the development. There is a further contract for the fourth stage of the development. Novawest sues for amounts said to be due under the contract as varied, on a quantum meruit and for damages for breach of contract.

Attack on the Counterclaim

4          The defendant, Altona Industrial Centre Pty Ltd (“Altona”) by further amended counterclaim dated 21 September 2010 (“the Counterclaim”), seeks liquidated damages, particularly in the case of the primary contract, in respect of the period between the date for practical completion, or the extended date and the date of practical completion. In the case of the further contract for Stage 4, the works are alleged to have not been completed.

5          In paragraph 324 of the Counterclaim, Altona pleads that the Superintendent extended the date for practical completion of Stages 1 to 4 to a date earlier than 25 March 2008. In paragraph 325, it pleads that in breach of the primary contract, the contractor did not bring the works to practical completion until 20 August 2008. Then paragraph 326 pleads breaches of the further contract and a failure to complete the works, and paragraph 327 pleads the debt, which is alleged to be owing.

6          It was not really disputed, as I understood it, by Altona, that as a matter of appropriate pleading, it was necessary to specify a date in a more precise manner than occurs in paragraph 324. I proceed on the basis that paragraph 324, in its present form, is not an adequate pleading. Because I have accepted that paragraph 324 needs to specify a date, paragraph 326, which depends on paragraph 324, is also inadequately pleaded.

The Notice to Produce

7          The particulars to paragraph 324 refer to an affidavit of Mr J O’Donahue which was filed on behalf of Altona. That affidavit gives some context to the dispute and how it has led to the issuing of the Notice to Produce. Mr O’Donahue states that he was appointed Superintendent under the contract, ultimately by a company called Coomes Consulting Group Pty Ltd, in January 2007, and that he was made redundant on 16 November 2009. He then swears that:

“Under the primary contract the date for practical completion of Stages 1

to 3 of the Project was 7 May 2004.

From time to time, pursuant to requests from the Plaintiff for extension of time I extended the date for practical completion of Stages 1 to 3 of the Project. I am not able to presently recall, and have been unable to locate after due search and inquiry, any material which assists me to recall the date to which I extended the date for practical completion. I believe the Plaintiff will have in its possession my correspondence extending time for practical completion of the work.

I refer to paragraph 324 of the Defendant’s counterclaim which states that I extended the date for practical completion until 28 March 2008. This is an error on the part of the Defendant’s solicitors. This date was the date of the final progress payment certificate for all stages of the works. The date to which I extended the date for practical completion was earlier than 28 March 2008.”

8          Mr O’Donahue then stated that he had located an email that he sent to Novawest on 13 July 2007 expressing his concerns with its delays in completing the works and disbelief that inclement weather would justify a delay of some three years. He states:

“The contracted date for practical completion of Stage 4 of the project was 15 July 2005. I am not able to presently recall and have been unable to locate after due search and inquiry any material which assists me to recall the date to which I extended the date for practical completion. I believe that the Plaintiff will have in its possession, my correspondence extending time for practical completion of the works.

On the date that I was made redundant by the acting Superintendent, Coomes Consulting Group Pty Ltd I had not issued a certificate of practical completion with respect to the primary and further contracts.”

9          Faced with that situation, and with attacks on the Counterclaim by the first summons, Altona then issued a Notice to Produce dated 3 November 2010 under Rule 35.08 of the County Court Rules of Civil Procedure, seeking production before the Court by 10 November 2010 of:

(i)	requests made by the plaintiff to the Coomes Consulting Group Pty Ltd (Superintendent) for extension of the dates for practical completion of Stages 1, 2, 3 and 4 of the building works;
(ii)	notification by the Superintendent to the plaintiff of the grant or refusal of the plaintiff’s request for extension of the dates for practical completion of Stages 1, 2, 3 and 4 of the buildings work.

10        Rule 35.08, which deals with notices to produce, states:

“(1) A party to a proceeding may serve on any other party a notice requiring that other party to produce the documents mentioned in the notice on any application in or at the trial of the proceeding.”

11        I was assisted by the clear submissions of the parties and the written submissions with which I was provided, and I will summarise them briefly.

Submissions of the Parties on the Notice to Produce

12        Novawest submitted that the counterclaim of Altona was deficiently pleaded, because it did not allege a proper factual foundation for the debt claimed. Altona’s pleading apparently attempted to require Novawest to identify the date for practical completion. The Counterclaim did not properly allege the date for practical completion under the contract. Under the contracts a debt for a liquidate damages arises only when both the date for practical completion and the date of practical completion are identified.

13        In oral submissions, Novawest argued that the Notice to Produce should be set aside; in particular, that it was fishing, and that it was not required to provide information to Altona to assist it remedying the defect in the pleading. Novawest argued that with an unspecified date for practical completion, it could not know what defence it needed to plead and what documents it ought to discover.

14        In response, Altona submitted that Novawest should be ordered to produce the documents required, and it then be given leave to insert a date for practical completion. Altona argued that the Rules of Court, and indeed the orders of the Court, required the parties to co-operate and that Novawest had not disputed that the date for practical completion was extended beyond the date stipulated in the contracts. The Notice to Produce was being used in an attempt to ascertain with precision the date for practical completion.

15        It is clear from Mr O’Donahue’s affidavit, and I did not hear it to be really disputed, that the date for practical completion was extended beyond the date stipulated in the contracts. The question then becomes whether the Court, having accepted that the pleading in paragraph 324 is not satisfactory, should permit the use of a notice to produce to enable Altona to ascertain if it can remedy the defect as a result of the documents thereby obtained.

Timing of Notice to Produce

16        A point, which did not receive a great degree of separate submission from the parties, was whether it is appropriate to allow the issuing of a notice to produce at this point in the litigation, bearing in mind that discovery has not yet occurred. There are some authorities that do discuss the timing of the service of a notice to produce,[1] but none state that a notice to produce cannot be used at an early stage of the litigation, although, it is not a common occurrence.

[1] Williams, ‘Civil Procedure Victoria’ (Vol 1) pp 4091 - 4092

17        I also take into account that this is commercial litigation in the Commercial List, Building Cases Division of the Court, in which a standard direction is that the parties shall co-operate in completing the interlocutory processes so that the action is brought to trial as quickly as is reasonably practical. Under Rule 1.14, the Court, in exercising power under the Rules, is to endeavour to ensure that all questions in the proceeding are effectively, completely, promptly and economically determined.

18        Having taken these matters into account, I do not consider that the timing of the notice to produce, in itself, is a ground for setting it aside.

Is the Notice to Produce Fishing?

19        The next question is whether the notice to produce is defective because, to use the shorthand expression, it is ‘fishing’. It is necessary to keep clearly in mind what exactly a ‘fishing’ notice to produce or subpoena is. The parties accepted that the general principles relating to notices to produce were analogous to, if not identical to, those applying to subpoenas. In the oft-cited case of Commissioner for Railways v Small, [2] Jordan CJ, made the following statement of general relevance:

“In the absence of special circumstances, a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories for the purpose of fishing, i.e. endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all or to discover the nature of the other side’s evidence.”[3]

(authorities omitted)

[2] (1938) 38 SR (NSW) 564

[3]             supra at p.575

20        I propose to apply this test in determining whether the Notice to Produce is “fishing”. The authorities to which I was referred by the parties, in one form or another, apply the principle stated by Jordan CJ: see Crown Joinery Pty Ltd v Lyleho Pty Ltd per Maxwell P.[4] I therefore ask, is the Notice to Produce endeavouring to obtain evidence to support Novawest’s case, or is it seeking to discover if it has a case at all or, to discover the nature of Novawest’s case?

[4] [2007] VSC 214 at [31] –[32] cf Seven Network Ltd v News Ltd ( No 11) [2006] FCA 174 at [6]

21        Considering the matter in the context provided by Mr O’Donahue’s affidavit and the pleadings, Altona, through the use of the Notice to Produce, is seeking to obtain evidence to support its case, and indeed evidence of quite a confined character, namely relevant dates. It is not attempting to discover whether it has a case at all. Mr O’Donahue’s affidavit, when read in the context provided by the pleadings, establishes the probability, that the date for practical completion was extended. Altona is trying to obtain that date. Thus viewed, I do not consider that the notice to produce is ‘fishing’.

Is the Notice to Produce Oppressive?

22        The next question, which is raised in the affidavit of Mr H Parth, is whether the compliance with the Notice to Produce would be oppressive. Mr Parth has been a director of the plaintiff since 1993, and states:

“The files that Novawest holds for the works performed under the contracts are numerous, and constitute 12 manila folders which have been paginated and contain at least 3000 pages and a further 17 manila folders which have not been paginated but I believe contain a similar number of pages. Furthermore, it may be that Novawest has misplaced or did not receive correspondence from the Superintendent regarding extensions of time which correspondence the Superintendent or Defendant is more likely to have in their control. ”

23        The oppressiveness of a subpoena, or a notice to produce, is a relevant consideration to take into account. Of relevance to the determination of this issue is the decision of the Full Court of the Federal Court in Lucas Industries Ltd v Hewitt[5] in which Smithers J, with whose judgment Bowen CJ and Nimmo J agreed, stated:

“Assessment of the reasonableness of burdens involved in complying with a subpoena must take account, inter alia, of the desirability that justice be administered effectively. The capacity of a party to collect and produce the documents referred to is a relevant circumstance. Large business entities may be thought to be highly organized and well staffed. What may be burdensome to lesser entities may be of small significance to a large one.”[6]

[5] (1978) 18 ALR 555

[6]             supra at 570

24        In this case, the contracts are reasonably substantial in monetary terms. The documents which are sought under the notice to produce appear to be documents that would have been of particular importance to both Novawest and Altona. It is reasonable to assume that notices of that sort from the Superintendent would be amongst the more important documents that Novawest possessed for these contracts. I therefore do not consider, in the context of these particular contracts and in view of the nature of the documents sought, that the requirement to produce the documents is oppressive.

25        I therefore dismiss the summons seeking to set aside the notice to produce. I propose to extend the time for compliance with it.

26        I am conscious of the fact that the notice to produce may not reveal any further relevant information to Altona. If that be the case, then Altona will have to decide what it does about this important aspect of the case. However, I do not see that as a reason for setting aside the notice to produce.

Remaining Issues concerning the Pleadings

27        Novawest attacked paragraphs 331 to 333 of the Counterclaim. They were referred to as the ‘stay’ paragraphs and contain a Notice of Dispute regime. Altona indicated that they were not being pressed, so I say no more about them.

28        Novawest also criticised the wording of paragraph 325 of the Counterclaim, in particular the words “until 20 August 2008”. However, I consider that, read in context, the meaning of those words is clear enough.

29        There was then a further attack made on paragraphs 328 to 330 of the Counterclaim. Paragraph 328 pleads various terms of the contract. Paragraph 329 then pleads breaches of those terms in words, which do not replicate the wording of the terms pleaded in paragraph 328. I do not accept that criticism of those paragraphs. It is open to a party to allege a breach of a contractual term in words different from the exact terms of the provision said to have been breached. Here the breach is pleaded to be that wrongfully in breach of the primary and further contracts, the contractor did not perform the works in accordance with the drawings and specifications, and not in a proper workmanlike manner. When read with the particulars that are given, and perhaps subject to the need to provide further particulars, I consider that paragraph 329 pleads an arguable breach of the terms pleaded in paragraph 328.

30        I will make orders to give effect to these reasons.

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