Palermo Nominees Pty Ltd v Broad Construction Services Pty Ltd

[1999] WASC 233

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PALERMO NOMINEES PTY LTD & ANOR -v- BROAD CONSTRUCTION SERVICES PTY LTD & ANOR [1999] WASC 233

CORAM:   MASTER BREDMEYER

HEARD:   8 NOVEMBER 1999

DELIVERED          :   26 NOVEMBER 1999

FILE NO/S:   CIV 2439 of 1996

BETWEEN:   PALERMO NOMINEES PTY LTD

MIRCO BROS PTY LTD
Plaintiffs

AND

BROAD CONSTRUCTION SERVICES PTY LTD
Defendant

THE ARCHITECTURAL PARTNERSHIP PTY LTD
Third Party

Catchwords:

Particulars - Application for further and better answers to defendant's request

Legislation:

Nil

Result:

Application allowed in part

Representation:

Counsel:

Plaintiffs:     Mr A Metaxas

Defendant:     Mr P G Clifford

Third Party                   :     No appearance

Solicitors:

Plaintiffs:     Arthur Metaxas & Co

Defendant:     Hollingdales

Third Party                   :     No appearance

Case(s) referred to in judgment(s):

Palermo Nominees Pty Ltd & Anor v Broad Construction Services Pty Ltd & Anor, unreported; SCt of WA; Library No 980202; 17 April 1998

Case(s) also cited:

Bailey v Federal Commissioner of Taxation (1977) 136 CLR 214

Charlie Carter Pty Ltd v The Shop, Distributive & Allied Employees' Association of WA (1987) 13 FCR 413

Duke & Sons v Wisden & Co (1897) 77 LT 67

H 1976 Nominees Pty Ltd v Gallic & Apex Quarries Ltd (1979) 30 ALR 181

John Holland Construction & Engineering Pty Ltd v Kvaerner RJ Brown Pty Ltd (1997) 13 BCL 262

Sachs v Speilman (1887) 37 Ch D 295

Silverstone Holdings Pty Ltd v American Home Insurance Co (1997) 18 WAR 516

State of Western Australia v Bond Corporation Holding Ltd, unreported; FCt SCt of WA; Library No 8793; 3 April 1991

Zierenberg v Labouchere (1893) 2 QB 183

1. MASTER BREDMEYER:  This is an application by the defendant for further and better particulars of the plaintiffs' amended statement of claim for loss and damage filed 3 December 1998 (the statement of claim). 

2. The background to this application is that a separate trial on liability was heard by Parker J in November 1997 and resulted in a judgment for the plaintiffs against the defendant on liability.  The Judge published a 66 page judgment, Palermo Nominees Pty Ltd & Anor v Broad Construction Services Pty Ltd & Anor, unreported; SCt of WA; Library No 980202; 17 April 1998. 

3. I quote from various parts of the judgment as follows:

   "Page 9

   After the night club was opened the acoustics proved to be unsatisfactory.  Whether that was apparent when the night club opened or merely came to the attention of the plaintiffs and others a little later is the subject of some conflict in the evidence.  There was more than one cause of difficulty.  The evidence suggests that apart from the issue of the acoustic qualities of the building itself, the acoustics of the night club were adversely affected inter alia by misuse of the sound system by different disc jockeys, the inappropriate characteristics of some components of the sound system originally installed, inappropriate placement of some loud speakers and defective or inappropriate wiring of different components from time to time.  As will appear it is accepted that the defendant has no liability in respect of any of these matters except for the acoustic qualities of the building itself.

   Page 10

   As part of this testing process the sound system was set to operate at a maximum volume or SPL of 95 decibels.  At this level the noise breakout, ie the noise level outside the night club, met the legislative requirements.  Mr Herring reported to the plaintiffs that the sound system should not be operated at any higher level of volume or SPL than 95 decibels because of the need to satisfy the requirements regarding sound breakout.  The equipment then installed was capable of operating at a higher level of sound pressure, namely up to 110 decibels.  I am satisfied from the evidence that very soon after opening, the sound system came to be operated at that level rather than the level set by Mr Herring in association with the local authority inspectors.

   Page 16

   Having regard to these various matters I am satisfied on the evidence that the night club as designed and constructed had the acoustic characteristic that, when empty, average reverberation times within the building at medium frequencies were in excess of 2 seconds and that this level of reverberation is excessive for the intended use of the building as a night club.  In particular the effect of this excessive reverberation time is to make amplified speech difficult to understand and recorded or live music played through a sound system would have an undesirable lack of clarity. 

   I am not persuaded that the building should have been designed so that when empty the average reverberation times at medium frequencies was 0.7 second or less.  It is sufficient for present purposes to say that I am persuaded by the evidence that such average reverberation times in the order of 1.0-1.3 seconds at medium frequencies would have produced an acceptable acoustic environment for the intended use as a night club and that had the acoustic qualities of the building achieved such a result this aspect of the obligation of the defendant to the plaintiff for the design and construction of the night club would have been fulfilled.

   I am thus satisfied that the building as designed and constructed did not have internal acoustic qualities which were appropriate and suitable for the intended use as a night club.  Subject to, and in light of what follows in these reasons, there was a failure in this respect to satisfy the contractual obligation undertaken by the defendant to the plaintiffs.

   Page 17

   In reaching those views I am well aware of the evidence as to the deficiencies as to design, performance and operation of the sound system originally installed in the night club and of the very significant changes made to that system under the guidance of Mr Harwood and of the potential for both versions of the system to aggravate reverberation problems.  I am of the view that factors such as these aggravated the difficulties experienced with the acoustics in the night club, but I am equally persuaded that problems such as those cannot be said to be the sole cause of the acoustic difficulties experienced by the plaintiffs.  The evidence clearly establishes, in my appreciation of it, that the structure as designed and constructed had inherent acoustic qualities which had the effect, no matter what sound system was used, that there would be an inappropriate and unsatisfactory level of reverberation including some echoes which had the effect that speech over the amplification system was difficult to understand, as was live singing, and that music had an unacceptably high level of reverberation which adversely affected its clarity."

4. Referring to the evidence of Mr Herring:

   Page 35

   Not only was he not asked during the hearing, but neither was he asked at the relevant time.  The evidence indicates that nobody from the defendant spoke to him after his 15 August 1995 report about the internal acoustics and there is no evidence to indicate that either the third party or Mr Palermo, or anyone else for the plaintiffs, raised the issue with him.  He was never asked for a detailed report on internal acoustics during the design and construction of the night club.  My own conclusion is that had he been asked to report on the internal acoustics or to comment on the Bose proposal in 1995, his reservations as expressed in his report of 15 August 1995 would not have been displaced by the Bose proposal, at least without some calculations of the acoustic characteristics of the night club and enquiries as to the nature of the assessment made in the formulation of the Bose proposal.  His concerns would have led him to make more enquiry of the Bose assessment because of his special expertise in that field.  Such detailed enquiry would not, in my view of the likelihoods, have displaced the reservations expressed in the 15 August 1995 report or changed the view he expressed in January 1995 as to the need for an acoustic treatment to the ceiling.  His report in April 1996 in my view reveals calculations of the type he would have made and the views he would have formed had he been retained to review the internal acoustics in 1995.

   Pages 42 - 43

   Given the importance of the acoustic qualities of the interior of the night club to the project, the expressed opinion of Herring Storer in January and the specific contractual obligation of the defendant to have expert advice as to interior acoustics and finishes, it is my view that the defendant fell short of its contractual duties and undertakings by failing to recommend to the plaintiffs the appointment of an expert consultant to report on internal acoustics, especially after the matter had been specifically raised and its importance emphasised by the architect Mr Davies at the 6 June meeting.  I see that this view is substantially in accordance with the evidence of Mr Silver, an experienced project manager who gave evidence before me.

   Pages 46 - 47

   For these reasons I am satisfied that the plaintiffs have made out their case against the defendant of breach of contract both by virtue of events related to the 6 June 1995 design meeting and following the 15 August 1995 report by Herring Storer."

5. Following that judgment I understand the defendant filed and served an appeal and that the hearing of that appeal has been stayed pending the trial on loss and damage, so that, if there is to be an appeal on that, the two appeals can be heard together.

6. The defendant applied to strike out parts of the plaintiffs' initial statement of claim for loss and damage and Parker J struck out par 1 and par 6 on 13 November 1998.  The transcript of his brief oral reasons at the time include these passages:

   "Firstly, there has been some narrowing by that process of trial and decision of the possible bases of liability but, perhaps more importantly, the time is now reached where attention is focussed on the detail of causation and the result and question of the measure of whatever damage may shown truly to have flowed from the breaches established.

   In my view, it will of value to the efficient and proper final disposition of this action if the pleadings gave … more adequate notice of the causative links to be relied upon by the plaintiffs between the contractual breaches that have been found and the damages, the actual damages which they now seek to pursue."

7. Since then the paragraphs of the pleading struck out, par 1 and par 6, have been repleaded.  Although liability has been decided in the plaintiffs' favour the various causative links can be explored in the trial on loss and damage and if the defendant succeeds on its case there, the quantum of damages will be reduced.

8. Particulars by a plaintiff are designed to inform the defendant of the case it has to meet, as distinct from the plaintiff's mode of proof.  They prevent the defendant from being taken by surprise at trial.  They limit and define the issues to be tried and they tie the hands of the plaintiff so that he cannot, without leave, go into any matters not included.  Unlike interrogatories, particulars are not designed to advance the defendant's case. I turn now to the particular requests for particulars which the defendant says have not been answered properly. 

Request 1 re par 1 of the statement of claim

1. I consider the particulars given are adequate.

Request 3 re par 4 and par 5 of the statement of claim

1. This request will be refused.  I consider it is not necessary to give the defendant full particulars of each and every disc jockey employed by the plaintiffs to play recorded music over the Bose system to understand the plaintiffs claim. 

Request 5 re par 7 of the statement of claim

1. Re request 5(a), I do not consider it is necessary to understand the plaintiffs case for the defendant to be supplied with particulars of each and every complaint made.  A request for the substance of the complaints might be reasonable but that is not asked.  I will amend the request to ask the substance of the complaints.

2. Re request 5(b), I do not consider those particulars are necessary.  The pleading is clear.  Following certain complaints, Jones was requested to take remedial action and in the course of the ensuing two or three weeks he re‑located some of the speakers in the Bose system within the nightclub but this did not effect any improvement in sound quality.  It is obvious from that that he was asked to make changes to improve the quality of the sound. 

3. Request 5(c) was amended in the course of argument to refer to par 8 of the statement of claim.  I do not think it needs be answered.  The reference to "the ensuing 2 to 3 weeks" is clear enough.

Request 6 re Par 8 of the statement of claim

1. Re request 6(a), I consider the request in that form is unnecessary.  I would allow the request in an amended form "where were the speakers moved to".  A plan of their location in the nightclub would be helpful.  Re 6(b) and 6(c), I consider these requests are unnecessary.  The pleading is clear enough.  No doubt Jones will be called by the plaintiffs to say that he moved the speakers but this did not effect any improvement in the sound quality.  The defendant can cross‑examine him on that.  The quality of sound that should have been achieved, but was not achieved, is the subject of express findings by the Judge.

Request 7 re par 9 of the statement of claim

1. Request (a) seeks particulars of the higher volume the equipment was operated at including what higher volumes the equipment was operated at in terms of sound, pressure levels and frequencies.  I consider this request is unnecessary in view of Parker J's findings which I have quoted that the sound system came to be operated at 110 decibels shortly after opening.

2. Request 7(b) seeks particulars of each and every complaint made.  I consider that is unnecessary for the defendant to understand the case which it has to meet.  I will allow the request in an amended form to give the substance of the complaints.

3. I consider request 7(c) unnecessary.  The pleading is clear enough and is the subject of express findings of fact that there was an inappropriate and unsatisfactory level of reverberation including some echoes which had the effect that speech over the amplification system was difficult to understand and that music and live singing had an unacceptably high level of reverberation which adversely affected its clarity. 

Request 8 re par 10 of the statement of claim

1. Re request 8(a), I allow this request.  I consider the plaintiffs should give the name of "Viscosity Man" and should give details of his engagement, eg how many hours he worked and at what rate (if he was paid on an hourly basis) so that the defendant has some basis to possibly challenge the charge of $2400 for his work.  Re request 8(b), I do not consider particulars of that are necessary.  The problem with the sound is the subject of specific findings of fact which cannot now be challenged. 

Request 9 re par 11 of the statement of claim

1. I consider these requests are unnecessary.  The plea is clear enough.  Also the request for the names of any who were present when the plaintiffs made their request to Harwood for advice is an attempt to find the names of potential witnesses and is not permissible.

Request 10 re par 12 of the statement of claim

1. Request 10(e) has been conceded.  I will allow 10(d) in an amended form to ask: what was the substance of the complaints.  I consider that the other requests in 10 are unnecessary.  What was wrong with the sound is the subject of specific findings of fact.  The "marginal" improvement in the sound quality means that it was still unsatisfactory.  The trial Judge found that a proper reverberation time would have been between 1.0 - 1.3 seconds at medium frequencies.  So clearly, excessive reverberation means more than that.

Request 11 re par 13 of the statement of claim

1. Request (a) has been conceded.  Request (b) is unnecessary for reasons given earlier. 

Request 12 re par 14 of the statement of claim

1. I refuse requests 12(a) and (b) but would amend the plea in par 14 to read:

   "and all efforts to remedy the problem to that time (as pleaded above) having failed …" 

   The new words are underlined.  This will assist the defendant. 

2. I will allow 12(c).  I consider it is reasonable for the defendant to know what became of the replaced Bose systems.  The equipment may have some value and that could be offset against the plaintiffs' damages.

3. I will allow 12(d) in an amended form: the location of the new equipment in the nightclub.  This is relevant.  Knowing that, the defendant may wish to lead evidence that the new equipment was incompetently positioned and that contributed to the poor sound.

Request 13 re par 15 of the statement of claim

1. I consider the request is unnecessary.  For reasons given earlier the pleading is clear enough that the installation of the new equipment did not improve the sound quality within the nightclub.  What is meant by that is the subject of detailed findings by the trial Judge. 

Request 14 re par 16 of statement of claim

1. This request is unnecessary.  The pleading is clear enough.  Steve Palermo contacted Alan Herring for advice as to the cause of the excessive reverberation.  The extent to which the reverberation is said to be excessive is the subject of findings by the trial Judge. 

Request 15 re par 17 of the statement of claim

1. Request 15(a) I refuse.  The substance of the advice given by Herring is in the plea.  Also his advice is the subject of a report which was tendered at the trial.  I allow request 15(b).

Request 16 re par 19 of the statement of claim

1. I allow request 16(a), that has been conceded.  I will also allow 16(b) and 16(c).  The latter is similar to request 15(b) which I also allowed.

Request 17 re par 20 of the statement of claim

1. Request 17(a) is conceded.  Request 17(b) is refused.  The plea as to Howe's advice is clear enough.

Request 18 re par 21 of the statement of claim

1. Request 18(a) is conceded.  Requests 18(b) and (c) are refused for reasons given earlier in relation to similar questions.  The plea is clear enough and the details of the excessive reverberation are the subject of findings by the trial Judge.

Request 19 re par 22 of the statement of claim

1. I consider requests 19(a), (b) and (c) are unnecessary.  The acoustic problems are set out in the judgment as are the findings that the problems were caused by lack of sound absorptive materials on the walls and ceiling.  I refuse request (d).  The defendant's failure to install the same is pleaded in par 19.

2. Request (e) is refused as unnecessary.  What work was done and the approximate dates are stated in the pleading.  It is not necessary to state who did the work.  If the defendant wants to assert that the work was not done it can inspect the ceiling and lead evidence on that.

3. I will allow 19(f).

Request 20 re par 23 of the statement of claim

1. I will allow this request.  Names of witnesses are not required but rather, how many staff.  I note that the work was carried out over 11 months which seems an excessive time. 

Request 21 re par 26.1 of the statement of claim

1. I will allow this request.  The answer given is helpful but not complete.  I consider it reasonable for the defendant to know what average reverberation times at medium frequencies were achieved after the fitting of the fibertex bats. 

Request 22 re par 26.2 of the statement of claim

1. I allow this request.  I consider it reasonably necessary for the defendant to know how many people amounted to reasonable patronage at the nightclub and when that was achieved.  The plaintiffs are claiming loss in the form of reduced patronage for a certain period.  In order to measure this it is necessary to know what is reasonable patronage and when that was achieved.

Request 23 re par 27.5 of the statement of claim

1. I allow this request.  The plea is that due to the closure of the nightclub for two weeks in November 1997 to complete the coverage of the ceiling with the bats, the plaintiffs suffered loss.  The income for that period, it is stated, should have been $60,000 for a net loss of $30,000.  This contrasts with the actual income received from the nightclub for the month of November 1997 of $38,338 on page 10 of the pleading.  Presumably that represents two weeks trading, so the trading loss of the closure of the nightclub for two weeks should be $38,338 and on a 50 per cent profit margin the actual loss would be $19,169. 

Request 24 re par 27.7.2 of the statement of claim

1. I allow this request.  It is reasonable to know if the loss is based on the loss of use as a nightclub or as a nightclub plus other uses referred to in par 2.

Request 25 re par 27.7.3 of the statement of claim

1. I refuse this request.  The trading losses based on projected revenue less actual revenue, are pleaded.  The basis for the projected trading results will be revealed in the plaintiffs' expert report which will be given to the defendant.  The defendant knows what the plaintiffs will be trying to prove and what it will have to disprove.

2. In summary, I propose to allow the following requests:

   5(a) as amended

   6(a) as amended

   7(b) as amended

   8(a)

   10(d) as amended

   10(e)

   11(a)

   12(c)

   12(d) as amended

   15(b)

   16(a), (b) and (c)

   17(a)

   18(a)

   19(f)

   20, 21, 22, 23 and 24

   I also amend par 14 of the statement of claim to add the words "(as pleaded above)" in line 2.