Pavlovic v Punt Road Hostel Pty Ltd & Anor (No.2)
[2021] VCC 1116
•12 August 2021
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised (Not) Restricted Suitable for Publication |
Building Cases List
Case No. CI-19-05231
| Robert Pavlovic t/a Robert Pavlovic & Associates (ABN 23949236100) | Plaintiff |
| v | |
| Punt Road Hostel Pty Ltd (ACN 609 496 602) | First Defendant |
| and | |
| Brittany McGuire | Second Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 August 2021 | |
DATE OF RULING: | 12 August 2021 | |
CASE MAY BE CITED AS: | Pavlovic v Punt Road Hostel Pty Ltd & Anor (No.2) | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 1116 | |
RULING
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Subject:Building and Construction - pleadings – case management - amendment – delay - fresh cause of action – strike out
Catchwords: overarching obligations - whether court should allow amendments during trial – fresh cause of action – delay – prejudice – prevention
Legislation Cited: Civil Procedure Act 2010 (Vic) ss 7, 8, 9(1)
Cases Cited:Northern Health v Robert Kuipers [2015] VSCA 172; Aon Risk Services Australia Ltd v ANU [2009] 239 CLR 175; Traffic Technique Pty Ltd v Burgmann & Anor [2020] VSCA 319; Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters [2011] VSC 370
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms K Weston-Scheuber | Logie-Smith Lanyon |
| For the Defendant | Mr B Mason | GBX Law |
HER HONOUR:
1On the first day of trial, I made orders granting leave to the plaintiff to file and serve an amended statement of claim and provided a timetable by which the defendants file and serve their defence, and the plaintiff an opportunity to put in a reply to the second further amended defence. That timetable was enlarged on the second day of trial to give the plaintiff more time to obtain instructions to settle the reply to the second further amended defence and that time was extended to 10.00am today, being day four of the trial.
2The defendants raised an objection in relation to five paragraphs of the reply filed, purportedly pursuant to my orders made on 9 August 2021 and extended on 11 August 2021, those paragraphs being paragraphs 10E, 10F and 10G, and paragraphs 43 and 44. Mr Mason of counsel for the defendants submitted that the order made by the court when read correctly, provided that the reply was to be responsive to the amended pleading and did not give the plaintiff a right at large to amend to include fresh pleadings.
3He submits that paragraphs 10E, 10F and 10G give rise to a fresh claim, being an allegation of prevention, that is:
'[T]he Owners by their conduct prevented the Builder from complying with the provisions of the Contract that required the participation of an Architect, including clause Q.'
4The particulars are said to be that:
'The conduct of the Owners was:
(a)a failure to appoint an Architect at all; or
(b)alternatively, failing to appoint an architect after Mr Pozzebon withdrew from the project on or about 6 September 2018;
in breach of clause A6 of the Contract.
(ii) [that by reason of the aforementioned conduct,] [t]he Owners … [were] prevented from taking advantage of their own breaches to insist on the Builder's compliance with the provisions of the Contract that required the participation of an architect, including clause Q.'
5At the opening of the trial it was noted that Ms Weston-Scheuber made reference to clause A4.1(d), that: 'The Owner was to appoint an Architect to administer the Contract' and that Mr Pavlovic says that where the defendants failed to appoint an architect, it was impossible for him to comply with the provisions in the contract that rely on an architect being appointed.
6Mr Mason, in his opening, made reference to that submission and argued that Mr Pavlovic had not pleaded a prevention case in this proceeding and that there was no express or implied term setting out a duty to cooperate or that there was a breach of the term of the contract by failing to appoint an architect. He then opened on the mechanisms in the contract that provided for the process for the plaintiff to crystallise the debt and for the owners to remedy the default.
7Ms Weston-Scheuber submits that the case law provides that there is an overlap with the doctrines of prevention, estoppel and waiver and that, in her view, the reply that was extant on the file, dated 29 January 2021, at paragraphs 4 and 6 did clearly give rise to the prevention doctrine. Those paragraphs state:
'Further, he says that there was no Architect appointed for the purposes of the Contract.'
8The particulars refer to:
'The Architect, the person shown in item 2 of schedule 1 of the Contract. Item 2 of schedule 1 is blank and there was therefore no Architect appointed for the purposes of the Contract.’
9At paragraph 6 the pleading reads:
'Further and in the alternative to paragraphs 4 and 5, if Pozzebon was the Architect appointed under the Contract (which is denied):
(a)compliance with the procedures set out in the Contract for the Builder to be paid was waived by the Architect as the Owner's agent, or alternatively by the Owners; and
(b)Pozzebon ceased to act as the Architect under the contract some time around September 2018 and no further Architect was appointed under the Contract.'
10Ms Weston-Scheuber further refers to the reference back to paragraphs 4 and 6 at paragraph 7 for the pleading as to the “assumption” and the particulars at paragraphs 11, 12 and 13 of the reply.
11Mr Mason for the defendants submits that what is set out in paragraphs 4 and 6 is put on a basis of waiver and estoppel and not a prevention doctrine; and that the plaintiff is now seeking to recast its case on day four of the trial. These matters do not, he submits, flow on from the amendments set out in the second further amended defence at 10C. He submits that there would be prejudice suffered by the defendants if paragraphs 10E, 10F and 10G were allowed in circumstances where the trial is now at day four; where he has completed cross examination of the plaintiff's main witness, Mr Pavlovic, and that he has not put all matters in cross examination to Mr Pavlovic to rebut a prevention claim.
12Further, he submits that there may be further discovery arising from these additional issues because it was not clear on the pleadings or the settled summary of key issues of fact and law to be determined by a court in this case as to whether in fact the plaintiff was prevented in all the circumstances from compliance with the Contract. He further submits that further searches would need to be made in relation to emails and other documents that may go to the prevention principle and indeed, the plaintiff himself would also need to conduct further searches in relation to those documents because in his evidence, he said that he had not conducted any further searches because his solicitors had all the relevant documents.
13Mr Mason submits that if the amendments are allowed at paragraphs 10E, 10F and 10G, that his clients would seek leave to further cross examine Mr Pavlovic, but also to seek an adjournment of the trial to enable further discovery to occur, for him to take instructions from his clients in relation to the prevention principle and evidence and arguments that may flow from that, and also to provide any supplementary witness statements from his witnesses in relation to whether there is any additional evidence about whether in fact Mr Pavlovic was prevented in all the circumstances.
14Although it was conceded by Mr Mason that there may be overlap in relation to prevention, estoppel and waiver, that is not this case. He submits that it is the plaintiff's case that there may be a binary point but in his view, there are separate and distinct elements and evidence and legal arguments going to the doctrines of prevention, waiver and estoppel in the present case, that is, he had been conducting the case on the basis of waiver and estoppel, of whether in fact he did rely on the said representations and circumstances and not on whether the plaintiff was in fact prevented in all the circumstances.
15In such case management applications, the Court of Appeal in Northern Health v Robert Kuipers [2015] VSCA 172 (“Kuipers”) considered the principles of Aon Risk Services Australia Ltd v ANU [2009] 239 CLR 175 (“Aon Risk”) and ss7, 8 and 9 of the Civil Procedure Act 2010 (Vic) (“the CPA”). The Court of Appeal also most recently considered such case management principles in respect of amendments and adjournment in Traffic Technique Pty Ltd v Burgmann & Anor [2020] VSCA 319.
16In Kuipers, the Court of Appeal found that the trial judge must take into account the mandatory considerations pursuant to ss7–9 of the CPA and to give effect to the overarching purpose of facilitating the just, efficient, timely and cost effective resolution of issues in dispute under ss7–9 of the CPA.
17The case stands as an important reminder to consider the provisions of the CPA and particularly the mandatory considerations of s9(1) before making any order in relation to whether leave to amend is granted or prohibiting reliance on late filed material. Section 9(1) of the CPA lists a number of matters which the court is obliged to have regard to in furthering the overarching purpose. It must take into account:
(a) the just determination of the civil proceeding;
(b) the public interest in early assessment of disputes;
(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial administrative resources;
(e) minimising any delay between commencement of the civil proceeding and its listing for trial beyond that which is reasonably required for any interlocutory steps that are necessary for—
(i) the fair and just determination of the real issues in dispute; and
(ii) the preparation for the case for trial;
(f) the timely determination of the civil proceeding;
(g) dealing with a civil proceeding in a manner proportionate to—
(i) the complexity or importance of the issues in dispute; and
(ii) the amount in dispute.
18According to their Honours, the “main focus” of the considerations of s9 of the CPA is “forward looking and in particular, in ensuring a just and fair determination of the real issues in dispute” (see Kuipers at [89]).
19A trial judge must also adequately consider the circumstances of the particular case, including the prejudice to the parties (Kuipers at [96]-[101]) and the reasons for any breach (Kuipers at [102]-[107]).
20Their Honours concluded the emphasis of the outcome of the case reflected “its special circumstances” (Kuipers at [118]) and “Parties conducting proceedings in a managed list…must do all they can to comply with the Court’s timetabling orders. If they do not, they face the risk that orders will be made which may affect the manner in which, and the extent to which, they can conduct their case” (at [119]).
21Their Honours also refer to Forrest J's summary in Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters [2011] VSC 370 (“Ultra”) and in particular at paragraph 8, the factors that the High Court considered in AonRisk, that is:
(a) whether there will be a substantial delay caused by the amendment;
(b) the extent of any wasted costs;
(c) whether there is an irreparable element of unfair prejudice caused by the amendment;
(d) concerns of case management arising from the stage of the proceeding when the amendment is sought;
(e) whether the grant of the amendment will lessen public confidence in the judicial system; and
(f) whether a satisfactory explanation has been given for seeking the amendment at the stage which it has been brought.
22In my view, taking into account the mandatory considerations of the CPA and the case management principles set out in Aon Risk, I am satisfied that there would be a substantial delay caused by the amendment in circumstances where Mr Mason has opened on the basis of estoppel and waiver only, and that if the amendments at paragraphs 10E, 10F and 10G are allowed, that the case would need to be adjourned in order for there to be further discovery and witness statements and the re-opening of cross examination of Mr Pavlovic would also be required.
23There would be an extent of wasted costs thrown away by reason of any adjournment and the costs of a rejoinder that would be required because the prevention principle is now being sought to be raised explicitly in reply in the new paragraphs which would need to be met by the defendants in a responding pleading. There would also be irreparable unfair prejudice caused by the amendment, given that Mr Mason has concluded his cross examination of the principal witness of the plaintiff and it is day four of the trial.
24If the amendment were allowed and Mr Mason granted leave to further cross examine Mr Pavlovic, it has provided Mr Pavlovic with an opportunity to bolster his case after three days of trial and evidence being heard, including the evidence of one of the defendants' own witnesses in this case, who has been interposed to allow the efficient conduct of the case given Mr Pozzebon's personal difficulties.
25There is also a concern about case management principles from the stage in which the amendment is being sought, that is, on the opening of day four of the trial. In my view there would also be a lessening of public confidence in the judicial system in allowing the late amendment and that there would be a flow on effect of either the extension of the duration of the trial, given the new issue, in which further arguments and evidence would need to be made, which may have an impact on the resources of the court given that this court is due to hear another trial on Wednesday of next week, and also an adjournment of the trial would be required in order that procedural fairness be afforded to all parties.
26In my view, there has not been a sufficient or satisfactory explanation as to why the amendment is sought at this stage and it arises from the submissions made by Mr Mason on day one of the trial that prevention was not pleaded on the case. It was not set out as an issue in dispute between the parties and arguments and evidence was not led by the defendants on that basis.
27For those reasons and taking into account Forrest J's observation in Ultra at paragraph 9 that:
“The primary questions still remains, what do the interests of justice dictate? The prism through which these interests are viewed is wider than just that of the moving party.”
28In my view, paragraphs 10E, 10F and 10G ought be disallowed, but paragraphs 43 and 44 are allowed on the reply filed this morning as those issues in relation to the management fees and the “extraordinary circumstances” were known to the parties on the current pleadings and the evidence and cross examination has been made in relation to that issue and there would be no prejudice suffered in relation to those paragraphs.
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Certificate
I certify that these 8 pages are a true copy of the ruling of Judge Burchell delivered on 12 July 2021
Dated: 13 July 2021
Andrea Ko Associate to
Judge Burchell
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