Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union & Ors (Self-executing order ruling)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
EMPLOYMENT AND INDUSTRIAL LIST

S CI 2016 02556

PENTRIDGE VILLAGE PTY LTD (In Liquidation) (ACN 087 151 068) & ORS (according to the attached Schedule)	Plaintiffs
v
CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 October 2021
DATE OF RULING:	17 December 2021
CASE MAY BE CITED AS:	Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union & Ors (Self-executing order ruling)
MEDIUM NEUTRAL CITATION:	[2021] VSC 848

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PRACTICE AND PROCEDURE – Non-compliance with self-executing orders – Discretion as to setting aside self-executing order – History of ongoing delay – Requirements of interests of justice – Matters relevant to exercise of discretion to dismiss proceeding – Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110 – Ridge Lane Pty Ltd v Gadzhis [2007] VSC 212 – Khan v The Age Company Pty Ltd & Ors [2019] VSC 839.

PRACTICE AND PROCEDURE – Pleadings – Application to further amend statement of claim – Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 – Application to amend pleadings disallowed.

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APPEARANCES:	Counsel	Solicitors
For the Second and Third Plaintiffs	Mr J Bourke QC with Ms A Tresise	Piper Alderman
For the First, Second, Third, Fourth, Sixth, Seventh and Eighth Defendants	Ms R Doyle SC with Mr J Gurr	Gordon Legal Pty Ltd
For the Ninth Defendant	Mr D Shirrefs	Russell Kennedy

TABLE OF CONTENTS

Summary.............................................................................................................................................. 1

History of proceeding........................................................................................................................ 1

Should the proceeding be struck out for breach of self-executing orders?.......................... 13

Defendants’ submissions........................................................................................................... 13
Plaintiffs’ submissions................................................................................................................ 16
Analysis........................................................................................................................................ 17

Should leave be given to amend?................................................................................................. 27

Plaintiffs’ submissions................................................................................................................ 27
Paragraph 12A(a)(ii).......................................................................................................... 28
Paragraph 19....................................................................................................................... 28
Paragraph 22....................................................................................................................... 29
No real prejudice............................................................................................................... 29
Further orders.................................................................................................................... 30

Defendants’ submissions........................................................................................................... 30
Paragraph 12A(a)(ii).......................................................................................................... 32
Paragraphs 19 and 22........................................................................................................ 32
Further orders.................................................................................................................... 38

Analysis........................................................................................................................................ 39
(a)....... Substantial Delay................................................................................................... 42
(b)...... Wasted Costs.......................................................................................................... 42
(c)....... Irreparable element of unfair prejudice which cannot be compensated by costs 42
(d)...... Concerns of case management arising from the stage in the proceeding when the amendment is sought............................................................................................ 43
(e)....... Whether the grant will lessen public confidence in the judicial system....... 43
(f)....... Whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.......................................................................................... 43
(g)...... Other factors........................................................................................................... 43

Conclusion......................................................................................................................................... 47

HER HONOUR:

Summary

This ruling determines an oral application made by the defendants to dismiss the proceeding on the basis that the plaintiffs have, in substance, breached self-executing orders made on 18 February 2021. I find that the plaintiffs breached the self-executing orders, and consequently, the plaintiffs’ claims in this proceeding stand dismissed.

The second-third plaintiffs made an application to file a proposed fourth amended statement of claim (‘4FASOC’). Given the finding above, it is unnecessary to determine that application. I have however, determined the issue as a matter of completeness. I would disallow the application.

History of proceeding

The history of the proceeding is a crucial factor in the determination of these applications. It provides the context in which the parties seek their respective orders.

In a ruling given on 12 February 2019, I ordered the plaintiffs pay the defendants’ costs of a strike out and substitution summons forthwith, and that they be taxed immediately in default of agreement. I held the following:

There has been unreasonable delay by the plaintiffs. This delay is not confined to the last few months, but rather the history of the proceeding. I have read the correspondence exchanged between the parties that led to the defendants’ two summons filed on 2 November 2018. The correspondence is exhibited to the affidavits of Mr James Andrew Naughton, the defendants’ solicitor, affirmed on 2 November 2018 (‘the first Naughton affidavit’), 11 December 2018 (‘the third Naughton affidavit’), and 8 February 2019 (‘the fourth Naughton affidavit’). As discussed above, the plaintiff’s more recent summons was responsive to that. The plaintiffs have been on notice of the defendants’ concern with their pleadings for a very long time. As recounted in the first Naughton affidavit, the statement of claim was filed and served on 22 August 2017. Several weeks later, the solicitors for the defendants wrote outlining deficiencies in the statement of claim. An amended statement of claim was filed on 1 December 2017. On 18 December 2017, the defendants wrote again advising of further deficiencies in it. The defendants foreshadowed a strike out application and on 18 January 2018 orders were made by consent timetabling that foreshadowed application. Indeed, the strike out summons was not the first time that the defendants sought to agitate these issues. On 2 March 2018, the defendants filed and served an application to strike out the amended statement of claim. Orders were made extending the time for the plaintiffs to file material in response on 23 March 2018. No material was filed by the plaintiffs. Instead, they proposed to serve the FASOC by 31 May 2018, which they did. They also agreed to pay the costs of the strike out summons and orders were made by consent on 13 April 2018. The first Naughton affidavit outlines further correspondence exchanged between the parties concerning the FASOC where the defendants outline their concerns regarding it. Ultimately, the strike out summons was filed. The fourth Naughton affidavit evidences that on 1 February 2019, in their submissions, the plaintiffs proposed filing a second further amended statement of claim (‘2FASOC’). This was finally provided to the defendants on 6 February 2019.
There is a further matter concerning delay. It is disappointing that the plaintiffs did not act in a timely manner to inform the defendants about the Capital Finance proceeding. (The defendants were left to discover it themselves.) After reading Connock J’s reasons, the plaintiffs were in a position to act in a timely manner to correct how Mr Chiavaroli was named in this proceeding. They did not do so. As discussed above, in relation to the loss allegations in the particulars in [33] of the FASOC, there has now been a late capitulation about a number of issues.
Unfortunately, there is likely to be a long delay before this proceeding is listed for trial. Although the plaintiffs commenced this proceeding in 2016, it has not progressed beyond the filing of the various iterations of its statements of claim. It would be unfair to deprive the defendants of the benefit of their costs orders for the years it will take until final determination of this proceeding.
Given the unreasonable delay caused by the plaintiffs, with the consequential costs incurred by the defendants in having to issue their summons, and the prospect of a long delay until trial, I am satisfied that the appropriate orders are for costs to be paid forthwith and to be taxed immediately in default of agreement. The summons concern discrete issues and there has been consent orders consequential to them.[1]

[1]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 12 February 2019), [14]-[17].

The orders made on 12 February 2019 recorded the following, by consent, in Other Matters.

In the proposed 2FASOC, the plaintiffs deleted the allegations which previously appeared in paragraph [33] of the further amended statement of claim dated 31 May 2018 that the conduct of the 1st — 4th and 6th - 8th defendants (CFMMEU defendants) caused or contributed to loss and damage referable to: (i) delays in completing construction works by dates stipulated in construction contracts for the purchase of dwellings and land in the Pentridge Village Project; (ii) the rescission of customer contracts for the purchase of dwellings and land in the Project; (iii) the inability to service the loan facility for the Project; (iv) the cessation of the loan facility for the Project; (v) the ultimate cessation of construction works; and (vi) the failure of the Project (abandoned loss allegations). In removing the abandoned loss allegations, the plaintiffs are not to be taken to detract from the cost and delay claims (as defined below).
The CFMMEU defendants reserve the right to object should the plaintiffs in future seek to revive the abandoned loss allegations or otherwise seek to add to or propose amendments to the pleadings, or to adduce evidence at trial which would have the effect of raising or reviving the abandoned loss allegations as claims or heads of loss and damage in this proceeding
The CFMMEU defendants reserve the right to object should the plaintiffs in future make claims for alleged loss and damage against the CFMMEU defendants beyond the following heads of loss, as pleaded and particularised:
i.the alleged increased costs and delays to the performance of the works during the Project, as alleged in paragraphs 17, 19, 21, 24, 26, 28, 30 and 32 of the proposed 2FASOC (cost and delay claims); and
ii.infrastructure, plant and equipment remaining on site for longer than programmed, which caused delay to the work scheduled (consequential costs claims).

The CFMMEU defendants reserve the right to object should the plaintiffs in future, in relation to the cost and delay claims, make any claim, seek to recover any loss or adduce any evidence in relation to subcontractors not already named in the proposed 2FASOC or in the proposed amended September 2018 particulars.[2]

[2]Ibid, [C]-[E].

Paragraphs 4-8 of the orders made on 12 February 2019 (as corrected) follow.

PLEADINGS
…
4.The plaintiffs have leave to file and serve by 4.00 pm on Friday, 15 February 2019 the amended particulars in the form delivered to the defendants on 6 February 2019 (amended particulars).
5.The defendants file and serve their defence by 4.00pm on 30 April 2019.

PARTICULARS
6.By 4.00 pm on 8 March 2019 the plaintiffs shall file and serve further and better particulars of (i) paragraph 31 of the amended particulars, so as to provide particulars of the dates on which the subcontractors referred to therein are alleged to have ceased work on the site and (ii) paragraph 57 of the amended particulars, which will identify, in respect of each of the 10 items of preliminary infrastructure, plant and equipment referred to therein:
(a)the period of time (date range and duration) for which each item of preliminary infrastructure, plant and equipment remained on the site;
(b)the period of time in (a) above which was longer than or in excess of the time originally contracted for or programmed for that item of preliminary infrastructure, plant and equipment (i.e. the extended duration which, the plaintiffs allege, was caused by the alleged tortious conduct of the CFMMEU defendants); and
(c)the alleged cost to the plaintiffs of that ‘extra’ time (in terms of leasing or hiring fees charged to and paid by the plaintiffs).

SUBPOENAS
7.By 4.00 pm on 29 March 2019 the plaintiffs shall serve on any subcontractors allegedly affected by the events the subject of this proceeding any subpoenas seeking the production of documents upon which the plaintiffs might wish to rely in support of the claims pleaded in this proceeding.

PARTICULARS IN RELATION TO SUBCONTRACTORS
8.By 4 July 2019, the plaintiffs shall file and serve further and better particulars of their cost and delay claims and consequential cost claims (as defined above) to the extent that those further particulars are capable of being supplied following return of documents under subpoenas served on subcontractors, being particulars of the allegations in:
a.the 2FASOC at paragraphs 17, 19, 21, 24, 26, 28, 30, 32 and 33; and
b.the proposed amended September 2018 Particulars at paragraphs 15, 18, 27, 29, 35, 38, 45, 47, 49, 55, 56 and 57.

On 18 February 2020, I ruled that the plaintiffs’ particulars filed on 31 July 2019 and parts of the second further amended statement of claim filed on 15 February 2019 (‘2FASOC’) should be struck out.[3] In that ruling, the following background to the proceeding was outlined.
[3]Pentridge Village Pty Ltd (in liq) v CFMMEU [2020] VSC 47.

The proceeding commenced by writ filed on 30 June 2016. At the time of this hearing, more than three years later, the proceeding had not moved beyond the point of pleadings. Consent orders made on 12 February 2019 (‘February 2019 orders’) required the second and third plaintiffs to pay almost $900,000 into Court as security for the defendants’ costs.
The 2FASOC is the third iteration of the statement of claim. In addition, three further and better particulars of claim have been filed.
This is not the first time that the defendants have brought a strike out summons. On 12 February 2019 (‘the February 2019 ruling’), I ruled that the plaintiffs should pay the costs of the defendants’ strike out summons, such costs to be taxed immediately in default of agreement…
Turning to the current application. By summons filed on 9 September 2019 (‘the summons’), the defendants seek to strike out part of the 2FASOC:
Pursuant to rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2015, further or alternatively the inherent power of the Court, paragraphs 17, 19, 21, 24, 26, 28, 30, 32, 33 and 38 of the Second Further Amended Statement of Claim dated 15 February 2019 (2FASOC) be struck out on the grounds that those paragraphs may prejudice, embarrass or delay the fair trial of the proceedings.

Paragraphs 17, 19, 21, 24, 26, 28, 30 and 32 of the 2FASOC allege increased cost and delay arising from the CFMMEU’s actions, and the application of pattern enterprise agreement arrangements at the Pentridge Site.
Paragraphs 33 and 38 of the 2FASOC allege loss and damage arising from compliance with an alleged CFMMEU demand that the first and second plaintiffs utilise CFMMEU people and contractors, and employ or engage a CFMMEU representative on site.[4]

[4]Ibid, [11]-[16].

Paragraphs 60-62 of the 18 February 2020 ruling follow.

The plaintiffs have pleaded a global total cost claim. The 2FASOC pleads global loss for cost and delay for the Pentridge Site project. It is alleged this caused loss and damage to the first and second plaintiffs. The July 2019 particulars reflect the plaintiffs’ global total cost claim.
The plaintiffs have not established why it would be impractical to plead the specific losses said to be caused by the alleged unlawful conduct. The following words of Moshinsky J are apt here:
…It is appropriate that the alleged causal consequences of each set of contraventions be pleaded separately so that the discrete allegations can be responded to separately…

The global total cost claim is likely to prejudice, embarrass or delay the fair trial of a proceeding for reasons outlined below.[5]

[5]Ibid, [60]-[62] (citations omitted).

In respect of the addition of subcontractors I held in the 18 February 2020 ruling:

Here, no stay is sought. Rather, the striking out of the July 2019 particulars is sought. I find that the addition of the 272 subcontractors is an alternative ground for striking out the July 2019 particulars. It is an abuse of process for the plaintiffs to impermissibly expand their case in this manner, that is, contrary to the February 2019 orders. It is conduct that brings the administration of justice into disrepute and ought be condemned given the breach of precisely framed orders, the length of time this proceeding had been on foot at the time the July 2019 particulars were filed (more than three years), and the multiple attempts by the plaintiffs to frame their case. It is likely to cause further delay and increase costs. The plaintiffs concede there is general prejudice to the defendants given the length of time (approximately 10 years) since the alleged unlawful acts. I accept that there is no evidence of specific prejudice. Nor is such evidence required to establish that the administration of justice is brought into disrepute.
If the plaintiffs wished to expand their case to include the 272 subcontractors, the proper course would have been to either obtain the consent of the defendants, and/or obtain the leave of the Court to file additional particulars. To obtain leave, a proper explanation for the delay in the plaintiffs’ attempt to expand the case in this manner is required. No proper explanation has been provided. There is no information which the plaintiffs were able to provide to explain the delay in seeking to significantly expand their case. It is not, for instance, said to be due to new evidence obtained. The July 2019 particulars rely upon material which the plaintiffs had prior to the proceeding.
Any attempt by the plaintiffs to expand their case must demonstrate compliance with sections 7 and 42 of the CPA. Section 7(1) sets out the overarching principles of civil proceedings. It means that the expansion of the case must be consistent with the ‘just, efficient, timely and cost-effective resolution of the real issues in dispute’. Section 42 requires there be a proper basis for claims, including additional claims. Turning now to whether there is a proper basis for the loss and damage claimed.

I reject the plaintiffs’ suggestion that discovery, expert reports or [further] subpoenas will remedy the 2FASOC. The causation nexus should be evident from the 2FASOC. …
As is evident above, the subpoenas certainly sought information regarding decision-making as foreshadowed by the plaintiffs at the February 2019 hearing. However, the subpoenas did not seek information regarding ‘the increases in labour costs, the decrease in labour resources, or the passing on of associated costs’ as foreshadowed by the plaintiffs. Specifically, the subpoenas did not seek estimates, quotes or invoices generated from the subcontractors in respect of the Pentridge Site work. Perhaps all this information is already in the possession of the plaintiffs. If that is so, it is contrary to the indication given to the Court in submissions (referred to above) that the information was not in their control. Such information is clearly relevant to the calculation of loss on the plaintiffs’ own case which claims loss based on the variance between estimated and actual costs. Further, the July 2019 particulars are not reflective of the plaintiffs making a calculation from that information. Rather, as discussed above, the July 2019 particulars state they were prepared on the basis of the Napier & Blakely reports and by totalling remittances paid.
As discussed above, the subpoenas did not result in any documents. The plaintiffs have not established a proper basis for their claim. That is, as discussed above, the plaintiffs have not articulated the causal nexus between conduct and loss.[6]
(underline added)

[6]Ibid, [93]-[95], [118], [123]-[124] (citations omitted).

Consequential to the 18 February 2020 ruling, I made orders on 3 March 2020. Paragraph E of Other Matters, and paragraphs 1-6 of the orders made follow.

In the Ruling, the Court ruled that it would strike out paragraphs 17, 19, 21, 24, 26, 28, 30, 32, 33 and 38 of the 2FASOC, relating the Second and Third Plaintiffs’ claims in causation with respect to cost and delay alleged against the defendants (Cost and Delay Claims) on the grounds that those paragraphs are likely to prejudice, embarrass or delay the fair trial of the proceeding. The Court also ruled that the Second and Third Plaintiffs’ loss and damage particulars as set out in the July 2019 Particulars (Loss and Damage Particulars) be struck out on the grounds that they are likely to prejudice, embarrass or delay the fair trial of the proceeding. The Court held further that the July 2019 Particulars constituted an abuse of process and lacked a proper basis.
…
Paragraphs 17, 19, 21, 24, 26, 28, 30, 32, 33 and 38 of the Second Further Amended Statement of Claim dated 15 February 2019 (2FASOC) are struck out.
The Second and Third Plaintiffs’ ‘Particulars in Relation to Subcontractors’ dated 31 July 2019 (July 2019 Particulars) are struck out.
The Second and Third Plaintiffs may by no later than 4.00 pm on Monday 27 April 2020 file and serve any application for leave to file any proposed third further amended statement of claim (pleading amendment application).
Any pleading amendment application filed in accordance with order 3 of these orders must include:
(a) a copy of the proposed third further amended statement of claim; and
(b)a proper basis certificate pursuant to s 42(1) of the Civil Procedure Act 2010 (Vic).

If the Second and Third Plaintiffs do not file and serve a pleading amendment application in accordance with orders 3 and 4 of these Orders:
(a) the 2FASOC will be struck out in its entirety;
(b)the Defendants will have leave by 4.00 pm on 18 May 2020 to make any application for such relief in the proceeding as they may be advised, including any application for costs and (in relation to the CFMMEU Defendants) any application for recourse to the security provided in relation to costs pursuant to order 15 of the Orders made 12 February 2019 (as amended on 18 February 2019); and
(c)subject to order 5(b) of these Orders, the proceeding will stand dismissed.

The Second and Third plaintiffs pay the CFMMEU Defendants’ costs of and incidental to the Third Strike Out Summons on an indemnity basis, with such costs to be taxed in default of agreement.[7]

[7]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 3 March 2020), [E], [1]-[6].

On 13 July 2020, consent orders were made on the papers. They related to the plaintiffs’ application to file a third further amended statement of claim (which was filed on on 14 July 2020) (‘3FASOC’), and their further and better particulars dated 26 June 2020. Paragraphs E and F of Other Matters of those orders record:

The CFMMEU Defendants do not oppose leave being granted to the Second and Third Plaintiffs to file the 3FASOC and the June 2020 Particulars on the basis that the Second and Third Plaintiffs answer the Particulars Request by 31 July 2020.
In addition, the CFMMEU Defendants have expressly reserved the right:
a.To object to and oppose any application by the Second and Third Plaintiffs for a grant of leave to make any further amendments (of a substantive nature) to their pleadings or to their particulars as filed under paragraphs 1(b) and 4 of these Orders and in particular any application to amend, the effect of which would be to add to or change the subcontractors or the scope of subcontracted works in relation to which the allegations are made in the pleadings and particulars;
b.To object to the admissibility of any evidence on which the Second and Third Plaintiffs may seek to rely that goes to matters outside the pleadings or particulars as filed under paragraphs 1(b) and 4 of these Orders, in particular any evidence which goes to allegations concerning subcontractors or scope of subcontracted works which are not addressed in the pleadings and particulars as filed under paragraphs 1(b) and 4 of these Orders.[8]

(underline added)

[8]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 13 July 2020), [E]-[F].

The consent orders of 13 July 2020 required the plaintiffs to file and serve a proposed 3FASOC and additional particulars.

On 4 November 2020, further consent orders were made. Those orders extended the time for the plaintiffs to provide additional particulars to the 3FASOC, noting that the plaintiffs had advised they could not provide complete particulars due to the Stage 4 COVID‑19 restrictions, amongst other difficulties. Other Matters of those orders recorded, by consent, that the defendants had taken issue with the particulars that had been produced by the plaintiffs on 18 August 2020.

On 9 December 2020, further consent orders were made. Paragraphs K-N record the following.

By letter dated 1 December 2020 (1 December letter), the Second and Third Plaintiffs advised the CFMMEU Defendants that they had instructed Mr David Watson of Hinds Blunden to prepare an expert report in respect of loss and damage (the proposed Watson Report) and provided the CFMMEU Defendants with copies of two letters of instructions to Mr Watson dated 21 August 2020 and 12 October 2020 respectively (the Watson Instructions).
By the 1 December letter the Second and Third Plaintiffs proposed orders to the effect that: the June Particulars and the August Particulars be struck out; the Second and Third Plaintiffs deliver particulars in response to the April 2020 Request (proposed Substitute Particulars) following receipt of the proposed Watson Report; and the defendants thereafter deliver defences to the 3FASOC.
The CFMMEU Defendants do not concede that the matters set out in the Watson Instructions accord with the case pleaded in the 3FASOC or will result in the generation of admissible evidence in support of that pleaded case. The CFMMEU Defendants reserve the right to apply to strike out or otherwise object to any part of the 3FASOC, the proposed Watson Report or the proposed Substitute Particulars.
The CFMMEU Defendants continue to reserve the right to object should the plaintiffs in future (including by the proposed Watson Report or the proposed Substitute Particulars) seek to revive previously abandoned loss allegations or otherwise seek to add to or propose amendments to the pleadings, the effect of which would be to add to or change the subcontractors or the scope of subcontracted works in relation to which allegations are made in the 3FASOC, or to adduce evidence at trial that would have the effect of raising or reviving previously abandoned loss allegations as claims or heads of loss and damage in this proceeding.[9]
(underline added)

[9]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 9 December 2020), [K]-[N].

The consent orders made on 9 December 2020 also include the following orders.

The further and better particulars of the 3FASOC dated 26 June 2020 and 18 August 2020 are both struck out.
By 4.00 pm on 3 May 2021 the Plaintiffs file and serve a copy of any expert report by Mr David Watson of Hinds Blunden upon which they intend to rely.
By 4.00 pm on 31 May 2021 the Plaintiffs file and serve further and better particulars of the 3FASOC in response to the CFMMEU Defendants’ request dated 30 April 2020.
The plaintiffs pay the CFMMEU Defendants’ costs of and incidental to the strike out of the plaintiffs’ particulars dated 16 June 2020 and 18 August 2020, on an indemnity basis, with such costs to be taxed in default of agreement.[10]

[10]Ibid, [2]-[5].

Self-executing orders were made on 18 February 2021 (‘18 Feb 21 orders’). Other Matters of the 18 Feb 21 orders follow.

For the purposes of today’s hearing the Court was provided with: the affidavit of James Andrew Naughton, affirmed 12 February 2021 and filed on behalf of the CFMMEU Defendants (‘the Naughton affidavit’); and, the affidavit of Howard David Bear affirmed 17 February 2021 and filed on behalf of the plaintiffs (‘the Bear affidavit’).
There is a dispute between the plaintiffs and the defendants regarding timetabling. The plaintiffs and the CFMMEU Defendants have each provided their proposed orders to the Court. In essence, the CFMMEU Defendants have agreed to provide the plaintiff with more time to file an expert report, however they say the extension should be until 31 May 2021 not the date proposed by the plaintiffs, which was 13 August 2021 and during the hearing became 16 July 2021. The plaintiffs seek until 13 August 2021 to provide further and better particulars of the 3FASOC (in response to the CFMMEU Defendants’ request dated 30 April 2020). The CFMMEU Defendants have agreed to an extension until 21 June 2021. The CFMMEU Defendants seek self-executing orders in the event of the plaintiff’s non-compliance with orders. The ninth defendant adopts the CFMMEU’s submissions.
For the following reasons, I will make the CFMMEU Defendants’ proposed orders.
In Other Matters of the Court’s orders made on 9 December 2020, the Court declined to vacate the directions hearing listed today and indicated that given the age of the proceeding, it intended to hear from the parties why it should not be allocated a trial date. Further, the parties and their legal practitioners were reminded of their overarching obligations pursuant to the Civil Procedure Act 2010.
The ruling of 18 February 2020 provides the background to this proceeding. The writ was filed on 30 June 2016. The plaintiffs have been dilatory in prosecuting this proceeding and I have previously made findings of unreasonable delay.
As it transpires, the proceeding is not yet ready to be set down for trial because the plaintiffs have yet to finalise pleadings. I refer to the outstanding further and better particulars in response to the CFMMEU Defendants’ request for further and better particulars dated 30 April 2020. The plaintiffs now propose to extend the time for response until 13 August 2021, which is well in excess of one year to respond to the particulars.
I should note that the consent orders of 9 December 2020 provide that earlier iterations of the further and better particulars be struck out.
There is also the plaintiff’s proposal to extend the time for filing and service of the expert report until 16 July 2021 – despite the expert’s own indication that he needed one month: see email from Mr Watson to the plaintiffs’ solicitor dated 8 December 2020 contained in Exhibit ‘JN-14’ to the Naughton affidavit (page 107). I have read and considered the Bear affidavit. It does not properly address the question of resourcing. Time frames are dependent on adequate resourcing. I am not satisfied that the plaintiffs are adequately resourcing this matter.
The plaintiffs’ delays are contrary to their obligations in the Civil Procedure Act. Moreover, they give rise to general prejudice given these proceedings relate to alleged events more than a decade ago.
In Jorgensen v Slater & Gordon Pty Ltd ([2008] VSCA 110) the Court of Appeal described the appellant as a serial defaulter. He had been persistently dilatory in taking steps in his appeal. That is the case here. The plaintiffs have been persistently dilatory in prosecuting this proceeding. As explained at paragraph 32 of Jorgensen:
A self-executing order is, quite intentionally, penal in character. The order has several purposes – to signify the court’s disapproval of prior non-compliance; to emphasise the importance of obedience to court orders; and to secure the performance of the particular procedural step(s) the subject of the order. The imposition of a self-executing order in the present case has, in our view, secured all of these purposes. It sent the clearest message to Mr Jorgensen, and to others who will doubtless follow him, that disobedience to procedural orders will not be tolerated.

This principle is applicable here and I will make the self-executing orders proposed by the CFMMEU Defendants.[11]
(underline added)

[11]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 18 February 2021), [B]-[K].

Paragraphs 1-4 of the 18 Feb 21 orders follow.

1.The time in paragraph 3 of the Court’s orders made 9 December 2020 (‘9 December 2020 Orders’) for the plaintiffs to file and serve a copy of any expert report of Mr David Watson upon which they intend to rely is extended to 4.00 pm on 31 May 2021.
2.The time in paragraph 4 of the 9 December 2020 Orders for the plaintiffs to file and serve further and better particulars of the third further amended statement of claim (3FASOC) in response to the CFMMEU Defendants’ request dated 30 April 2020 is extended to 4.00 pm on 21 June 2021.
3.If the plaintiffs fail to comply in full with paragraph 1 of these Orders:
(a) the 3FASOC will be struck out in its entirety;
(b)subject to paragraph 3(c) of these Orders, the proceeding will stand dismissed; and
(c)the defendants will have leave by 4.00 pm on 14 June 2021 to make any application for such relief as they may be advised, including any application for costs and (in relation to the CFMMEU Defendants) any application for recourse to the security provided in relation to costs pursuant to paragraph 15 of the Orders made 12 February 2019 (as amended on 18 February 2019).

4. If the plaintiffs fail to comply in full with paragraph 2 of these Orders:
(a)the 3FASOC will be struck out in its entirety;
(b)subject to paragraph 4(c) of these Orders, the proceeding will stand dismissed; and
(c)the defendants will have leave by 4.00 pm on 5 July 2021 to make any application for such relief as they may be advised, including any application for costs and (in relation to the CFMMEU Defendants) any application for recourse to the security provided in relation to costs pursuant to paragraph 15 of the Orders made 12 February 2019 (as amended on 18 February 2019).[12]

[12]Ibid, [1]-[4].

As a matter of completeness, two further matters must be noted. Firstly, on 8 October 2021, by consent, the second and third plaintiffs wholly discontinued the proceeding as against the fifth and ninth defendants. Secondly, Other Matters of the orders made on 8 October 2021 record that:

Unless the first plaintiff had obtained a Court order giving leave to proceed, and there was no evidence provided to this Court of such leave, then the proceeding between the first plaintiff and defendants is stayed by operation of law pursuant to s 417B of the Corporations Act 2001 by reason of the first plaintiff being in liquidation...[13]

[13]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 8 October 2021), [C].

For convenience, below I will refer to the first-fourth, and sixth-eighth defendants as “the defendants”, and the second and third plaintiffs as “the plaintiffs” in this ruling. The ninth defendant, who was separately represented from the other defendants, made written submissions prior to the proceeding being discontinued against him. Those submissions were adopted by the first-fourth, and sixth-eighth defendants. Accordingly, there is some reference below to the ninth defendant. Turning now to the first issue.

Should the proceeding be struck out for breach of self-executing orders?

In compliance with the timetable in the 18 Feb 21 orders, the plaintiffs filed a report of Mr David Watson on 31 May 2021 (‘Watson report’), and filed further and better particulars on 21 June 2021 (the ‘June 2021 particulars’). There is now a dispute between the parties as to whether or not there has been substantive compliance with the self‑executing orders made in the 18 Feb 21 orders.

Defendants’ submissions

The 18 Feb 21 orders placed an obligation on the plaintiffs to submit particulars and the Watson report. The defendants were still considering those voluminous particulars, in light of the timeframe in the orders, when the plaintiffs informed the defendants they had a new legal team and now the real issues in dispute would be articulated. This is the fourth legal team engaged by the plaintiffs since the proceeding began.

On 22 July 2021, the plaintiffs’ new solicitors, Piper Alderman (‘PA’) informed the defendants’ solicitors, Gordon Legal (‘GL’), that the proposed amendment would elucidate the real issues in dispute in the case. By 30 July 2021, GL had written to PA asking for an explanation as to how the proposed amendments fitted with the 18 Feb 21 orders. PA replied that the particulars were valid and continued to be relied upon. Since then, the plaintiffs have reversed. On 6 September 2021, GL received from PA a revised proposed 4FASOC and the Annexure A table regarding the Watson report. PA stated that the plaintiffs would provide revised particulars. The ninth defendant requested particulars and the response was that nothing could be promised.

On 5 October 2021, GL received the affidavit of solicitor, Ian Aneel Nathaniel, sworn on 5 October 2021 (‘fourth Nathaniel affidavit’), from PA. It indicated that there were difficulties in the Watson report. The faults were similar to those that the defendants pointed out to the plaintiffs in July 2021, along with some additions. The Court has not been given any explanation by the plaintiffs as to what occurred between July 2021 and now, other than to say that the plaintiffs and PA were busy looking at the material.

The plaintiffs now say that Mr Watson was not provided with sufficient information and that there are errors in his report. Indeed, they have provided the Court and the defendants with a table, stating their points of disagreement with the Watson report (the ‘Annexure A table’).[14] There are matters which Mr Watson has not addressed. The plaintiffs now seek orders to file a supplementary expert report of Mr Watson, and also an affidavit setting out the evidence of Mr Murray Nugent.
[14]Annexure A to the letter from PA to GL dated 6 September 2021 (Annexure A table), contained in Exhibit ”IAN-3” to the affidavit of Ian AneelNathaniel sworn on 13 September 2021 (‘second Nathaniel affidavit’), 39.

What is the explanation for the errors in the Watson report? It was prepared on the basis of instructions from the plaintiffs. The plaintiffs disagree with their own expert and wish he had reached a different conclusion on some matters. For instance, the analysis of Onal Painting.[15] There is a reference to Onal Painting in the pleadings. The Watson report concludes there are nil damages. The plaintiffs’ particulars state they are “presently unable to provide particulars of claims for additional costs”.[16] Another issue raised is that Mr Watson did not address certain matters.[17] For instance, the increased costs in connection with work undertaken by Shotton Group Pty Ltd.[18] There is no evidence explaining why Mr Watson was not provided with that information. What has changed? If anything has, it should be provided to the defendants. How can the defendants be sure there is a proper basis for the present particulars? It is left unexplained.
[15]Ibid, row 1.
[16]June 2021 particulars, [5(a)C].
[17]Fourth Nathaniel affidavit, [17].
[18]Annexure A table, row 2.

The plaintiffs seek a further report from Mr Watson, and say there is no prejudice to the defendants. That is untrue. Since December 2016, the defendants have been trying to get the plaintiffs to articulate their case. The quantum claimed by the plaintiffs has been very fluid. In the December 2017 amended statement of claim, damages were claimed exceeding $68 million, together with unquantified damages for loss of opportunity.[19] In July 2019, the claim was quantified at $22 million. By the June 2021 particulars, the claim is now quantified, at most, at $4.6 million. Of that, $1.5 million relates to delay event four. It is an extraordinary series of changes, and shows the disarray and confusion in the plaintiffs’ camp. It puts into stark relief the Annexure A table. The submission by the plaintiffs is that the loss calculated by Mr Watson is too low. They want to revisit his report to add to the quantum.
[19]Letter from GL to PA dated 20 August 2021, contained in Exhibit “IAN-3” to the second Nathaniel affidavit, 21 [88].

The fundamental problem is: what is going to be given to Mr Watson that he did not have before? The fourth Nathaniel affidavit does not disclose this. If Mr Watson did not have the material before, why not? There is no explanation. The plaintiffs have had serious and fatal difficulties particularising their claim. The problem lies with them [not PA].

The plaintiffs should not be given the opportunity to further particularise allegations, when they have actively declined to do so. The plaintiffs have given no explanation as to why their choice not to do so should not trigger the Court’s sanction given the self-executing orders. The plaintiffs’ proposed course of action introduces material beyond the scope of the Watson report. The plaintiffs’ proposed course of action may well result in the plaintiffs seeking to rely on material which is inconsistent with the Watson report.

The plaintiffs seek not only additions to the particulars, but a wholesale revisiting of the Watson report and a statement of Mr Nugent. The landscape has changed. The plaintiffs are now proposing a course of action that abandons the self-executing orders and case management principles underlying them. The 3FASOC is contingent on adequate particularisation because of the history of this proceeding. The plaintiffs have effectively admitted that they have not met the preconditions of the self‑executing order.

In conclusion, there has not been substantive compliance with the self‑executing orders. The self‑executing orders spring back to life because of that non‑compliance. The provision of the Watson report and June 2021 particulars appeared to be a good faith effort by the plaintiffs’ legal representatives to comply. However, subsequent events show that the information supplied to Mr Watson was insufficient. The plaintiffs have regularly said that if they just have more time, then they will get their house in order. It would dramatically undermine the Court’s capacity to manage its lists and enforce the overarching obligations pursuant to the Civil Procedure Act 2010 (‘CPA’) if the plaintiffs are given more time. There is continuing prejudice to the defendants. It would not be unjust to allow the self-executing order to bite because of the history of this case. There is no satisfactory explanation given by the plaintiffs for the non-compliance.

Plaintiffs’ submissions

There was compliance with the self-executing orders. The Watson report and June 2021 particulars were filed. Generally speaking, self-executing orders should be construed as being directed to time, unless the contrary is expressed unequivocally. If that were not the case, then there would need to be a resolution by further adjudication, which would create uncertainty. If the document was prepared in good faith, then it can be inferred that the self-executing order is satisfied [if there was compliance with the temporal order].

The self-executing orders should not be read as saying that the plaintiffs should be shut out on the basis of whether or not the Watson report is adequate. It is not a contravention of those orders to say that the Watson report needs to be improved. The June 2021 particulars stated that the plaintiffs could not presently file certain particulars. The defendants did not complain then that the plaintiffs had not met the requirements of the self-executing orders at that time. If the document was prepared in good faith, then it can be inferred that the self-executing orders were satisfied. If that is not the case, then the plaintiffs should be relieved of the consequences, because it would be unjust to deprive them of a trial. It would be a profound injustice to shut out the plaintiffs at this stage of pleadings. Self-executing orders should be made in extreme circumstances. There is now a new legal team ready to build an evidentiary case, and enforcing the self-executing orders would be unfair and oppressive.

Analysis

The parties agree that the Watson report does not support the June 2021 particulars. The plaintiffs concede those particulars are inadequate. The plaintiffs sought the defendants’ consent to file and serve revised particulars, before filing an application to further amend the pleadings and the proposed 4FASOC.[20] The defendants’ solicitors responded by letter on 7 September 2021.[21] The defendants’ letter included the following:
[20]Letter from PA to GL dated 6 September 2021, contained in Exhibit “IAN-3” to the second Nathaniel affidavit.
[21]Letter from GL to PA dated 7 September 2021, contained in Exhibit “IAN-3” to the second Nathaniel affidavit.

3. We understand the plaintiffs’ current position to be as follows:
(1)Despite having been the subject of self-executing orders made by the Court on 18 February 2021, which required the plaintiffs to serve the Watson Report by 31 May 2021 on pain of the proceeding standing dismissed, the plaintiffs now accept that aspects of their pleaded case are unsupported by the Watson Report and propose to attempt to cure this by delivering (by an unspecified date) supplementary expert evidence.
(2)Despite having been the subject of self-executing orders made by the Court on 18 February 2021, which required the plaintiffs to serve full and proper particulars of their pleaded claims by 21 June 2021 on pain of the proceeding standing dismissed, the plaintiffs now accept that aspects of their pleaded case remain inadequately particularised and propose to attempt to cure this by delivering (by an unspecified date) further particulars of their pleaded claims.
(3) Despite aspects of their pleaded claims being entirely unsupported by, and in some instances plainly contradicted by the Watson Report, the plaintiffs nevertheless intend to persist with those claims. Your letter does not address how it is intended to proceed with claims in relation to certain of the subcontractors in the face of the negative opinions expressed by Mr Watson; nor does your letter identify the source of any reasonable basis for allegations of that sort which are apparently proposed to be pressed despite the contents of the Watson report.
(4)Despite having been ordered by the Court on 22 July 2021 to file and serve by 28 July 2021 their proposed 4FASOC, together with “all other relevant materials in support and a minute of the orders they propose to seek at the next directions hearing”, the plaintiffs now intend to rely upon a further amended version of their pleading (the eighth version during the life of these proceedings) provided on 6 September 2021, to be supplemented or further amended (at an unspecified date) by still further particulars and still further expert evidence from an unidentified expert or experts. (emphasis in original)

4. Having regard to both the plaintiffs’ obligations under the Civil Procedure Act 2010 (Vic) and the unique history of this proceeding, this proposed approach is extraordinary. In short, your clients are effectively proposing to ignore the evident purpose of the self‑executing orders made by the Court on 18 February 2021. Further, despite having asserted in the Nathaniel Affidavit of 28 July 2021 that the purpose of the application for leave to amend the pleadings was to “ensure that the case brought by the Plaintiffs is clear”, just under six weeks after the date of that affidavit, the plaintiffs’ case remains unclear, and your clients are in early September raising the prospect of further amendments, more particulars and additional expert reports. Moreover, this course is proposed in the face of the Court having previously set 21 June 2021 as the ‘drop dead date’ for the constant evolution of the plaintiffs’ case.[22]

[22]Ibid, [3]-[4].

The fourth Nathaniel affidavit deposes as follows (emphasis in original):

B. Review of Current Particulars and Watson Report
7.Over a number of weeks since Piper Alderman’s retention, this firm and counsel now acting for the Plaintiffs have carried out an extensive review of the Current Particulars and the Watson Report and the material on which those documents are based. This review has also involved extensive consultation with representatives of the Plaintiffs as to matters and information relating to the Current Particulars, and to the content of and matters addressed in the Watson Report.

8. The principal purposes of that review were:
8.1 to determine the extent to which the Current Particulars, including those parts which refer to the Watson Report, in the context of the claim pleaded under both the 3FASOC and the proposed 4FASOC provide in each relevant respect a proper response to the Defendants’ FB Request;
8.2 to determine more generally whether they provide accurate particulars of the case, including as to the loss and damage case, that is to be advanced under the pleadings; and
8.3 to determine the adequacy of the Watson Report and its conclusions expressed in it with respect to the subject of loss and damage.

C. Watson Report issues
9. Through this review process, a number of issues in relation to the Watson Report have emerged, including in respect of the following:
9.1 the assessment of damages on account of delay and/or disruption, that is, damages comprised by certain additional costs incurred by the Plaintiffs by reason of the period of time over which the work of relevant sub-contractors in the 3FASOC was performed, taking longer than it would have taken had the work not been carried out under CFMEU Pattern Agreement terms (Delay Damages);
9.2 damages in relation to direct costs, that is, damages consisting of the additional costs incurred by the Plaintiffs for work performed by the named sub-contractors in the 3FASOC from 1 July 2010 by reason of the amount charged by the relevant sub‑contractors for that work being higher than the amounts that would have been charged in a situation where the work was not carried out under CFMEU Pattern Agreement terms (Direct Cost Damages).

…
C.1 Delay Damages
11. With respect to the opinions expressed in the Watson Report regarding Delay Damages, the instructions provided to Mr Watson requested him to express his opinion on what delay and/or disruption costs (if any) were caused to the completion of the individual Lots of the Project and the Project overall “by the imposition of the EBA and CFMMEU conduct”.
12.I was concerned in the instruction letter to Mr Watson by the use of the phrase “the conduct of the CFMMEU” as it had the tendency to imply that the Plaintiffs’ case included a series of claims for damages arising from separate episodes of wrongful conduct for which the Defendants were responsible, and from which discrete damages flowed. That does not reflect the case that the Plaintiffs advance under the 3FASOC or the proposed 4FASOC.
13.Additionally, I was also concerned that Mr Watson did not treat each lot as a project in itself when assessing Delay Damages, but rather assessed the effect of an event of delay or disruption on a particular lot by reference to its effect on the critical path of the project as a whole.
14.By reason of these matters, I am concerned that the Watson Report has not dealt with Delay Damages as adequately as should be the case and these concerns extend to the Current Particulars to the extent they adopt the Watson Report on Delay Damages.

C.2 Direct Cost Damages
15.With respect to Direct Cost Damages, the instructions provided to Mr Watson were “by reference to the July 2010 value baseline, what additional subcontractor direct costs (if any) were caused by reason of the imposition of the EBA and or CFMMEU conduct”.
16.I am again concerned that these instructions in relation to Direct Cost Damages did not frame the question in a way that was in closer conformity with the 3FASOC and the proposed 4FASOC.
17. Based on advice from counsel, I am also concerned that in respect of several relevant sub-contractors, being at least Onal Painting, Adwill Bricklayers Pty Ltd, William Pepe, Schembri Electrical Services, Westy Plumbing, Proscope, Super Kitchens, Stairform, Costa Constructions and XL Concrete Pty Ltd, Mr Watson was not provided with sufficient information (or inadequate explanation of that information). This appears to have caused Mr Watson to conclude that there was no material increase in the labour cost for which those sub-contractors charged for the relevant work. Based on my instructions from the Third Plaintiff, there was an increase in labour costs for these sub-contractors.

18. I am also advised by counsel that:
18.1the instructions to Mr Watson omitted to instruct him to determine the question of Direct Cost Damages in relation to the relevant sub-contractor Shotton Group; and
18.2 Mr Watson’s Report does not include an assessment or a comprehensive assessment of the quantum of loss in relation to the work performed by several of the sub-contractors who replaced other sub-contractors as pleaded in [22] of the 3FASOC, including the loss pertaining to the cost of work undertaken by the replacement subcontractors Narracott, Lagano, Buhajiar and Merceieca (para 22(b)); Super Kitchens, Proscope, Narracott, Lagano, Buhajiar and Merceieca (22(c)); Stairform Pty Ltd, Narracott, Lagano, Buhajiar, Merceieca and Proscope (para 22(d)); Nobletex Rendering (22(e)) and in relation to XL Concrete Pty Ltd owned by Mario Amenta (22(h)).

…
D. Current Particulars
22.By reason of the above matters, the Current Particulars do not, in my opinion, provide proper or comprehensive particulars of loss and damage in relation to the 3FASOC.[23]

[23]Fourth Nathaniel affidavit.

In short, the explanation given by the plaintiffs for the alleged shortcomings in the Watson report are: Mr Watson was given inadequate instructions, insufficient information, and does not deal with certain issues.

I will now address a number of authorities relied upon by the parties.

In Ridge Lane Pty Ltd v Gadzhis,[24] Hargrave J (as his Honour then was), outlined the following principles, which I gratefully adopt.
[24][2007] VSC 212 (‘Ridge Lane’).

Ordinarily, a party who is in default under a self-executing order cannot expect to have the discretion under Rule 24.06 exercised in the party’s favour unless, at the time of the application to set aside or vary the self-executing order, the party has complied with the terms of the order. In this case, the plaintiffs contend that Mr Gadzhis has not, even now, complied with paragraph 1 of the self-executing order. In an endeavour to establish this, detailed written submissions were filed and supplemented by detailed oral argument. The effect of the submissions was that Mr Gadzhis was wrong to swear that the documents exhibited to his affidavits on 30 May 2007 and 8 June 2007 complied with paragraph 1 of the self-executing order. The argument involved a detailed examination of the exhibited documents, the discovered documents referred to in those exhibits and other documents. It was submitted that there were gaps and inaccuracies in the information which Mr Gadzhis has belatedly provided.
In Freeman v Rabinov, the self-executing order required the plaintiff to file and serve a supplementary affidavit of documents within a prescribed time. In default of compliance, it was ordered that the plaintiff’s claim be dismissed and his defence to counterclaim be struck out. A supplementary affidavit of documents was filed within the prescribed time, but the defendant contended that the affidavit was insufficient because it contained two defects. The first of these defects was as to the required form of the affidavit. It was held that this was fatal to the sufficiency of the affidavit, and that the self-executing order had therefore operated according to its terms. The second defect was the failure in the supplementary affidavit of documents to properly describe some lost cheque butts. Lush J found that this defect in the supplementary affidavit of documents did not make it insufficient to comply with the self executing order. Accordingly, if this had been the only defect, the self-executing order would not have operated to automatically dismiss the plaintiffs’ claim and defence to counterclaim. Lush J reached this conclusion in the following terms:
The rule applicable to cases of this kind may be deduced from Republic of Liberia v. Rove (1876), 1 App.Cas. 139 H.L. and Reiss v. Woolf, [1952] 2 Q.B. 557; [1952] 2 All E.R. 803. In the former case the Republic, the plaintiff in the action, was ordered to file a full and sufficient affidavit of discovery, to be made by one or more of its officers or ministers. Enlargements of time were ordered, the last of which fixed a date and directed that in default the action should stand dismissed. An affidavit sworn by the Republic’s Consul General in London was filed. It seems to have been treated as evident, at ([1952] 2 Q.B.) p.146, that there were many documents omitted from the affidavit. Lord Hatherley, at pp. 145-6, said: “If a defendant, simpliciter, one of the persons directly concerned, is asked to make an affidavit as to the state of the documents in his possession, then, whatever be the state of the documents within his own knowledge, he is answerable, upon his oath, to state what he knows upon that subject, and when he swears that there were such and such documents and no others, that oath is all that the person asking the discovery of documents is entitled to.”
The House of Lords held, however, that the order had not been complied with by filing an affidavit by an officer in England who could have no knowledge of affairs in Liberia.

In Reiss v. Woolf, supra, at p.559, a case concerning a self-executing order for further particulars, the particulars ordered having been delivered in time but, in some cases, in the form that the party was unable to give further particulars until discovery, Somervell, L.J., with the concurrence of the other members of the Court of Appeal, quoted and adopted the following passage from the judgment of Devlin, J. then under appeal: “If ‘default’ means default in the sufficiency of one or more of the answers I should not consider that the event was defined with precision; whether or not it had taken place might be the subject of a genuine conflict of opinion which could only be resolved by further adjudication. If I thought this to be the right construction of the order I should follow Abalian v. Innous, [1936] 2 All E.R. 834 and treat it as inoperative. The order can conform with the principle in that case only if it is treated as an order that is dealing with the time of compliance rather than with the mode of compliance. The order does fix a time very precisely, and I think it can and should fairly be construed as a time order. So construed, ‘default’ refers to default in the delivery of a document within the specified time. I do not, of course, mean that any document with writing on it will do. It must be a document made in good faith and which can fairly be entitled ‘particulars’. It must not be illusory; that is the word used by Mr. Bankes in argument in Davey v. Bentinck, [1893] 1 Q.B. 185 at 186. That is the test, in my judgment, and not, as the plaintiff contends, whether each demand for particulars has been substantially met. Applying that test, I think there has been no default.
From these authorities it emerges that what was required to comply with the relevant part of the order of 28 February 1980 was an affidavit of documents sworn by the plaintiff in proper form. The affidavit delivered was not such an affidavit because of the lack of a proper final paragraph, a lack which cannot be made good by implication or by arguments of construction.
The form of description of the cheque butts should, in my opinion, be treated as a defect in content and not in form. As Lord Devlin indicated, if an affidavit proper in form was shown to be in point of content perjured or illusory or for any reason a sham, it would be treated as insufficient, as in the Liberia Case, supra, but the defect in relation to the cheque butts does not come within this class.

I accept that the law on this subject is correctly stated by Lush J and will apply it.
Of course, where the document provided in response to a self-executing order complies in form but contains some defects of substance, the Court retains the power to make further orders for the supply of the information necessary to correct the inadequacy of the document which has been provided.
In summary, the cases establish the following propositions. First, the terms of a self-executing order should state with precision the act to be done in order to comply with the order. Second, where the act specified in the self-executing order involves the provision of information within a specified time, a document filed within that time and which constitutes a good faith attempt to provide that information will comply with the order. Third, where the self-executing order has been complied with but the information supplied is in fact deficient in some way, the Court retains the power to make further orders for the supply of the information. Fourth, where a self-executing order has not been complied with, the Court will vary or set aside the self-executing order where, in all the circumstances, it would be unjust to deprive the party adversely affected of the right to a trial on the merits of the proceeding.[25]

[25]Ibid, [35]-[39].

In Khan v The Age Company Pty Ltd & Ors,[26] J Dixon J considered default under self‑executing orders made for the filing of an affidavit of documents by the plaintiff. The effect of the default was that the proceeding stood dismissed. In Khan, the plaintiff sought to remedy the default by filing an affidavit of documents five business days after the deadline in the self-executing orders. He sought an extension of time for compliance. Relying on Ridge Lane, the plaintiff submitted that time ought be extended because there had been good faith compliance of his obligations to file an affidavit of documents. He submitted that it would be unjust to deprive him of a trial on the merits. The defendant opposed the plaintiff’s submissions, partly on the basis that the plaintiff was responsible for a long period of delay (in discovering documents) prior to the deadline in the self-executing orders. The defendant submitted that the plaintiff had not given an adequate explanation for that delay.
[26][2019] VSC 839 (‘Khan’).

In Khan, J Dixon J held there would be significant prejudice to the plaintiff if the orders he sought were not made, and there would be no compelling prejudice to the defendant if the orders were made. J Dixon J held that “there was no intention on the part of either the plaintiff or his solicitors to deliberately flout or ignore the order” and it was caused by the plaintiff’s solicitor.[27]
[27]Ibid, [22].

Also in Khan, the defendant submitted, and J Dixon J accepted, that the late affidavit of documents filed by the plaintiff was not in proper form. His Honour held, applying Freeman v Rabinov (Lush J),[28] that:

… the test to be applied in determining whether the order had been complied with depended on the construction of the terms of the order and whether the event that triggered judgment was defined with precision. The triggering default could be the time for compliance and/or the mode of compliance. In the present case, I am satisfied that the order identified the operative default to be a failure to act within the specified time.[29]

[28][1981] VR 539 (‘Freeman v Rabinov’).

[29]Khan, [24].

J Dixon J held that the affidavit must be made in good faith. His Honour observed that in Freeman v Rabinov, Lush J concluded that a defect in content, as opposed to form, did not amount to insufficient compliance. It did not show a want of good faith to comply with the order. J Dixon J held that the plaintiff, as at the time of his application to set aside or vary the self-executing order, had complied with the order. His Honour concluded that it would be unjust to deprive the plaintiff of his right to trial. J Dixon J’s application of principles and distinction between a temporal default and substantive one is illustrative.

I consider that in the present case, the defect alleged is better treated as a defect in substance and it is not, I think, appropriate to undertake an inquiry into a defect of that sort on this application. For present purposes, I am satisfied that, at least in respect of this first part of the third ground of objection, the affidavit can be said to be a good faith attempt to comply with the order. Further, it would provide necessary information to enable inquiries to be made to identify whether copies of deleted material can be obtained from other sources. I accept the affidavit as constituting a good faith attempt to provide an affidavit that will comply with the order if time is extended.
The defendant’s second argument in its third ground was that the affidavit was not a good faith attempt for a different reason. On its analysis of the pleadings, particularly of the pleaded imputations, the defendant has identified substantial categories of documents that prima facie would be in the possession of the plaintiff and about which there has been no discovery at all. A schedule providing extensive particulars of the alleged deficiencies in discovery was tendered.
This argument has some attraction because discovery needs to be promptly completed to enable proper preparation of complex defences for trial. However, it is not appropriate on this application, being to set aside a self‑executing judgment, to enter into a detailed analysis of the question of whether further and better discovery would be appropriate…
...
For present purposes, I am not persuaded that the prima facie case for further and better discovery that has been made by the defendant is sufficient to enliven the want of good faith requirement, in the sense that it applies when resisting setting aside a self-executing judgment, that is principally conditioned against a temporal default.[30]

[30]Ibid, [26]-[28], [30] (citations omitted).

Here, the self-executing orders were directed to temporal and substantive issues. As noted in Other Matters of the 18 Feb 21 orders, there was a dispute about timetabling and the plaintiffs’ conduct of the litigation. The orders proposed by the defendants were made. Other Matters state that the “plaintiffs have been dilatory in prosecuting this proceeding and I have previously made findings of unreasonable delay”. The proceeding was not ready to be set down for trial because the plaintiffs had not finalised their pleadings. In particular, the plaintiffs’ further and better particulars in response to the defendants’ request for further better particulars dated 30 April 2020 remained outstanding. As already outlined above, Other Matters of the 18 Feb 21 orders record the plaintiffs’ delays were contrary to the obligations in the CPA, and gave rise to general prejudice given the proceedings related to alleged events occurring more than a decade ago.

The 18 Feb 21 orders state that the proceeding would stand dismissed (save as to the matters in paragraph 4(c), notably, costs) if the plaintiffs did not comply “in full”. These words take their plain meaning. The Macquarie Dictionary defines “Full” as:
… 1. filled; containing all that can be held; filled to utmost capacity: a full cup; a full theatre.
2. complete; entire; maximum: a full supply.
...
It is a phrase used both in respect of the Watson report and the June 2021 particulars. It is directed to substantive compliance. The self-executing orders must be construed in the context of the Other Matters recorded, which include reference to the plaintiffs’ conduct of the proceeding. Considering the text and context of the self-executing orders leads to the conclusion that they were directed to both substantive and temporal compliance. Both the Watson report and the June 2021 particulars were filed on the last possible day to comply with the deadline in the orders. However, as is common ground now, neither are complete.

The June 2021 particulars are incomplete and deficient. Amongst other things, they state that the plaintiffs are unable to provide particulars in respect of various matters: see paragraphs 5C, 8(g)(2), 9(g)(2), 9(l), 10(f2), 11(f2), 13, and 15. Moreover, to the extent that they rely upon the Watson report, this raises issues as the plaintiffs say there are deficiencies in it. The plaintiffs seek to file revised particulars.

As to the Watson report, it is common ground that the plaintiffs themselves consider it insufficient: see Annexure A table.

The plaintiffs have not provided any evidence to directly explain how it came to pass that they did not properly brief Mr Watson or provide him with sufficient information. I am not prepared to infer there was a good faith attempt by the plaintiffs to comply with the orders. I was urged to accept that the briefing of their fourth set of solicitors demonstrates a preparedness to properly resource the matter. Given the history of this litigation, and in the absence of any explanation as to why the plaintiffs would suddenly decide to properly resource this litigation after so many years, I decline to draw any such inference. To be clear, I am not suggesting there was a lack of good faith by their solicitors. Solicitors depend upon the instructions given to them. As matters stand, the compliance by the filing of the Watson report and the June 2021 particulars was illusory, given the deficiencies in both documents. The filing did not achieve what was intended – for the proceeding to progress towards trial.

The next question is whether or not it would be unjust to vary or set aside the self‑executing orders. The consequences of the orders are grave: the plaintiffs are unable to prosecute their claims, which they say are substantial. However, varying or setting aside the self-executing orders would be contrary to the administration of justice. The plaintiffs have repeatedly failed to properly prosecute this proceeding. I refer to the history of the litigation above. It is now more than a decade since the alleged events that are the subject of this claim occurred. As discussed below, general prejudice arises from the delays occassioned by the plaintiffs in their conduct of this litigation.

As a matter of completeness and although unnecessary given the finding above, I will now address the plaintiffs’ application for leave to amend.

Should leave be given to amend?

The plaintiffs seek leave to amend. By summons, they sought to file a 4FASOC in the form contained in Exhibit “IAN-1” to the first affidavit of Ian Aneel Nathaniel sworn on 28 July 2021 (‘first Nathaniel affidavit’). This was later revised. The plaintiffs now seek to file the proposed 4FASOC in the form contained in Exhibit “IAN-4” to the second Nathaniel affidavit.[31]
[31]The plaintiffs’ proposed orders are contained in Exhibit “IAN-9” to the fourth Nathaniel affidavit.

Plaintiffs’ submissions

Leave should be given for the proposed 4FASOC.

The amendments are minimal. This is not a reframing of the cause of action. The history of the litigation should not shut the plaintiffs out from establishing a deeper evidentiary case of loss and damage in a manner to be confined to what is already in the 3FASOC, save for the addition of two subcontractors. The same subcontractors have been sitting in the pleadings since April 2020. The plaintiffs are not seeking to expand the case by the back door. They are simply seeking to build an evidentiary basis to deepen the particulars of loss and damage.

The defendants do not have a broad objection to the 4FASOC. Their objection is confined to paragraphs 12A(a)(ii), 19, and 22.[32]
[32]Letter dated 20 August 2021 from GL to PA contained in Exhibit ”IAN‑3” to the second Nathaniel affidavit.

Paragraph 12A(a)(ii)

With respect to paragraph 12A(a)(ii), there is no objection to the plaintiffs pursuing loss and damage in respect of delay event four. Since the defendants’ initial objection, paragraph 12A(a)(ii) has been revised to confine its scope to matters directly relevant to the application of the CFMEU Pattern Agreement. Accordingly, the objection falls away by reason of the revised paragraph 12A(a)(ii).

The objection to paragraph 12A(a)(ii) was made on the basis that the plaintiffs previously abandoned the claim and now seek to pursue it. However, the plaintiffs never abandoned that claim. The application of the CFMEU Pattern Agreement has always been a central controversy in this case: r 36.01(1)(a) Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’). There is express reference to the claim in the 2FASOC at paragraph 30. In the 3FASOC, it just took a different form of wording.

There was references to delay event four in the brief from the plaintiffs’ then solicitor, Mr Bear, to Mr Watson.[33] Mr Bear provided Mr Watson with a spreadsheet summarising data regarding delay event four.[34] It was dealt with in the Watson report. The June 2021 particulars refer to CFMEU “orders” in relation to non-working hours, and the requirement for subcontractors to enter into an enterprise agreement.[35] The analysis of loss is included in paragraph 16(b) of the June 2021 particulars. The loss calculated is $554,785.12.[36] Annexure A particularises CFMEU orders in relation to rostered days off (‘RDOs’). Annexure B particularises all the dates covered by the [period of the] enterprise agreement that the CFMEU did not allow work to be done. It is clear there was no abandonment of loss arising from delay event four caused by RDOs and work cycles.
[33]Watson report, 159.
[34]Ibid.
[35]June 2021 particulars, [1(a)A], [1(a)C], [1(b)(1)(a)], [1(b)(2)(a)].
[36]Ibid, [16(b)(v)].

Paragraph 19

The proposed amendments to paragraph 19 are the addition of paragraphs 19(b)(vii) and (viii). There is no objection to those particulars, as they rely on matters identified in the Watson report. The objection to paragraph 19 is not directed to the parts of those paragraphs containing the proposed amendments. It is really an objection to the 3FASOC. The 3FASOC has not been the subject of a strikeout application. Leave is not required to rely on the parts of paragraph 19 that are not proposed to be amended.

Paragraph 22

The plaintiffs are not trying to expand their case. There are no amendments made to paragraph 22 in the proposed 4FASOC. Accordingly, leave is not required in respect of paragraph 22.

The objection to paragraph 22 is to the extent that it involves allegations not covered by the Watson report. The Watson report is flawed. That is recognised by the lawyers acting for all parties. The objection to paragraph 22 is based on the premise that the plaintiffs cannot be permitted to advance their case beyond the Watson report. The plaintiffs should not be bound by the Watson report. They should not be required to remove claims contained in the 3FASOC that do not, in some respects, accord with the conclusion arrived at by Mr Watson. The Watson report should not set the parameters of the pleadings. That is, the plaintiffs should not be required to cut back their case so that it accords with one report from one expert. The Watson report is not a pleading, but foreshadowed evidence. It is not required to support every component of the plaintiffs’ damages case.

No real prejudice

There is no real prejudice identified by the defendants if the amendments are allowed. Pleadings have not closed. The defendants have not yet obtained expert evidence. The so-called prejudice of delay will be an additional two-and-a-half months. The resourcing of the case has been substantially increased, with legal representation going from a sole practitioner to a mid-tier firm and counsel. The Annexure A table analysing the Watson report could not have been built without deep analysis in terms of the evidentiary documentary trail.

Further orders

The proposed timetable allows for the plaintiffs to obtain a supplementary report from Mr Watson. The plaintiffs are seeking further evidence in support of the loss and damage pleaded. The fourth Nathaniel affidavit addresses the concerns that the plaintiffs have regarding the Watson report. The instructions to Mr Watson asked him to assess loss and damage, and were not strictly confined to their pleaded case. Those instructions run the danger of Mr Watson expressing an opinion beyond the tortious claim relied upon. He was not provided with sufficient information, in that he was not provided with information for one subcontractor or information regarding quantam for other subcontractors.

There will be a need for the plaintiffs to update the June 2021 particulars, consistent with the 4FASOC. There is no objection to the defence coming after the updated particulars have been filed. The updated particulars of loss and damage will be be based on updated expert evidence.

Defendants’ submissions

Firstly, if leave to amend is given, it will undermine the case management orders in favour of the plaintiffs, by now having a further opportunity to particularise matters they have been unable to particularise at any time since 30 June 2016.

Fundamentally, leave to rely on the 3FASOC was always contingent on the proper provision of particulars. Reference is made to paragraphs E and F in Other Matters of the orders made on 13 July 2020 and paragraphs H-N in Other Matters of the orders made on 9 December 2020. The plaintiffs were saying then, that once armed with the Watson report, they would particularise their claim. The plaintiffs’ initial proposed particulars to the 3FASOC were struck out with consent, due to the inadequacy.[37] Following that, the 18 Feb 21 orders required substituted particulars be filed and, failing that, the 3FASOC would be struck out in its entirety and the proceeding dismissed. The plaintiffs did not comply with the 18 Feb 21 orders. The plaintiffs have now conceded that they have failed to provide the required particulars and do not need to explain how this will be overcome or how they will overcome the prejudice to the defendants.
[37]Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining and Energy Union (Supreme Court of Victoria, Ierodiaconou AsJ, 9 December 2020), [2].

To the extent that the plaintiffs say that there is no direct attack on parts of the 4FASOC: that skips over the fundamental detail that the survival of the 3FASOC was contingent upon adequate particularisation.

To the extent that the plaintiffs say they should not be hemmed in by the Watson report: the case management machine established in February 2021 was precisely to do that, to ensure that any particulars had a proper basis. Usually, the plaintiffs would not be required to stay within the four corners of the expert. However, here, there is a case management disaster which the plaintiffs have visited upon this Court and the defendants since 2016. This was the circumstance the plaintiffs found themselves in by February 2021.

An amendment with no prospect of success should not be allowed. Granting leave to amend in the form of the 4FASOC, in circumstances where it and the 3FASOC are not properly particularised, is the vice.

Secondly, the amendments proposed are not merely tidying up the pleadings. They go towards the raising of new issues and the broadening of the plaintiffs’ case. They go to damages and the reintroduction of the delay event claim. Such amendments should not be allowed in a proceeding which has laboured under the same deficiencies for five years, especially at this late stage.

Thirdly, there is a balancing act when an amendment is proposed. There are limits placed on re-pleading. The wasted costs are extreme. The plaintiffs’ claim for the costs of the application is strongly opposed. The defendants were partway through consideration of the 3FASOC when the plaintiffs informed them there would be a 4FASOC. There is irreparable prejudice. These events occurred a decade ago, and the defendants are still trying to find out the plaintiffs’ allegations. In December 2020, the Court wished to list this proceeding for trial. Now, the pleadings will not even be closed this year.

It is unclear what the explanation is for the amendment. The explanations given in submissions and in the fourth Nathaniel affidavit mask the real problem: the plaintiffs giving instructions.

Paragraph 12A(a)(ii)

The defendants do not object to this paragraph in light of the undertaking given in the letter from PA dated 6 September 2021 (the ‘PA 6 Sept 21 letter’), that the plaintiffs do not intend to pursue any case in relation to work practices at the Pentridge site which are not connected to the CFMEU Pattern Agreement.[38] The defendants do maintain that the plaintiffs cannot prosecute delay event four, for reasons already outlined above.
[38]PA 6 Sept 21 letter, [3], contained in Exhibit “IAN-3” to the second Nathaniel affidavit.

Paragraphs 19 and 22

On 31 May 2021, the plaintiffs’ then solicitor, Mr Bear, served the Watson report by email.[39] Under cover of that email, Mr Bear asserted that it was reasonable for the defendants to consent to a three-day extension of the orders for Mr Watson to finalise his report, and implied that it was harsh for the defendants to refuse to consent to the extension. The email stated that the plaintiffs reserved their rights to apply to file and serve an amended, or alternatively, a supplementary expert report.
[39]Email from Mr Bear to GL dated 31 May 2021, contained in Exhibit ”JN-32”to the affidavit of James Naughton affirmed on 23 September 2021 (‘tenth Naughton affidavit’).

GL replied by letter dated 1 June 2021.[40] The GL letter stated that an attempt to file and serve further expert evidence would, unless expressly permitted by the Court, be a breach of paragraph 3 of the 18 Feb 21 orders, and would enliven the self-executing nature of that order. It stated that the defendants would be entitled to treat any such step as an admission that the plaintiffs failed to comply with paragraph 1 of those orders “in full”. The letter stated:

Mr Watson refers to (and relies upon) instructions which were provided to him only on 31 May 2021. This tends to suggest that there were other factors - including an absence of necessary instructions-which were driving the delay in finalising Mr Watson’s report.[41]

[40]Letter from GL to Mr Bear dated 1 June 2021, contained in Exhibit “JN-32” to the tenth Naughton affidavit.

[41]Ibid, [3].

The letter states that it was open to the plaintiffs to issue any application that they saw fit, assuming they had a proper basis to do so, and they failed to do so.

The plaintiffs’ new solicitors, PA, wrote to GL by letter dated 14 July 2021.[42] The PA letter stated that they would provide a proposed 4FASOC by “mid next week”.
[42]Letter from PA to GL dated 14 July 2021, contained in Exhibit ”JN-32”to the tenth Naughton affidavit.

GL responded by letter dated 15 July 2021.[43] The letter identified the plaintiffs’ problems by reference to the history of the proceeding. The letter stated:
[43]Letter from GL to PA dated 15 July 2021, contained in Exhibit “JN-32” to the tenth Naughton affidavit.

In light of the matters set out above, we put you on notice that any proposed amendment which includes any allegation, or particular of any allegation, which:
a. travels outside the scope of the matters alleged in the current third further amended statement of claim and particularised in the June 2021 Particulars; and /or
b.attempts to reintroduce any previously abandoned or struck out allegations or matters; and /or
c. introduces any material outside of the scope of the opinions expressed in the Watson Report, will be vigorously opposed. In particular, any attempt to introduce or reintroduce claims previously abandoned or struck out will be opposed, for reasons including the staleness of many of the matters the subject of the various iterations of the plaintiffs’ claims, and the related obvious unfairness for our clients in attempting to now obtain instructions and information in relation to claims dating back more than 10 years.

We also invite you to consider the circumstances in which, and the purpose, for which her Honour made the orders concerning the filing and serving of the Watson Report, which was clearly intended to operate as a final opportunity for your clients to mark the outer limits of, and to properly explain the basis for, their causation and quantum claims. Thus, we put you on notice that any attempt now to introduce allegations or evidence which goes outside the four corners of that report will be vigorously opposed in these proceedings.[44]

[44]Ibid, [8]-[9].

By letter from GL to PA dated 30 July 2021, the defendants asked about the status of the plaintiffs’ June 2021 particulars.[45] The letter outlined inconsistencies between those particulars and the proposed 4FASOC. To the extent that the plaintiffs foreshadowed an intention to treat the June 2021 particulars as particulars to the proposed 4FASOC, the defendants objected to leave being granted to rely on parts of the June 2021 particulars.
[45]Letter from GL to PA dated 30 July 2021, contained in Exhibit “JN-32” to the tenth Naughton affidavit.

By letter dated 2 August 2021 from PA to GL (the ‘PA 2 Aug 21 letter’), the plaintiffs relied upon the June 2021 particulars and stated they were valid.[46]
[46]PA 2 August 21 letter.

By letter dated 20 August 2021 from GL to PA (the ‘GL 20 Aug 21 letter’), the defendants opposed the plaintiffs’ application to amend in the form of the proposed 4FASOC.[47] The GL 20 Aug 21 letter noted the effect of the consent orders made on 9 December 2020 was that the further and better particulars of the 3FASOC dated 26 June 2020 and 18 August 2020 were struck out, and the plaintiffs were ordered to file the Watson report and, four weeks later, particulars of the 3FASOC. The intent of the orders, having regard to the context set out in Other Matters, is that the Watson report would serve as the foundation for the particulars to be provided in relation to loss and damage. That is, to the extent that the Watson report supported the case pleaded in the 3FASOC in relation to causation, loss, and damage, the opinions could be relied upon to provide particulars of that pleaded case. Equally evident, having regard to the defendants expressly reserving their rights in paragraphs M and N of Other Matters, the plaintiffs could not use the Watson report as a vehicle through which to advance any new and pleaded allegations relating to causation, loss, and damage. Paragraphs 19 and 20 of the proposed 4FASOC, when read with the June 2021 particulars, travel outside of these boundaries.
[47]GL 20 Aug 21 letter.

Paragraph 19 of the proposed 4FASOC identifies eight subcontractors who allegedly increased their prices and took longer to complete their works by reason of having to work in accordance with the enterprise agreement. The 3FASOC identified only six subcontractors in this class. Whilst the defendants are entitled to object to the addition of two new subcontractors (Diangel and Golden Towers) at this late stage, they do not press the objection, having regard to the fact that the allegations are at least notionally supported by the opinions in the Watson report. However, there is objection to the plaintiffs retaining subcontractors in the pleadings where the claim for increased costs is not supported by the Watson report, and/or, in respect of whom no particulars have been provided in the June 2021 particulars. This includes subcontractors Shotton Group and Malcolm Tilley.

In respect of paragraph 19 of the proposed 4FASOC, the GL 20 Aug 21 letter outlined the problems with respect to the June 2021 particulars as compared to the Watson report. These problems were all basically accepted in the Annexure A table later drafted by the plaintiffs.

For the above reasons, the claims at sub-paragraphs (i) to (v) of the particulars to paragraph 19 cannot be permitted to be the subject of a grant of leave to amend. Those pleaded claims do not comply with the preconditions which attached to the plaintiffs having leave to prepare a proposed 4FASOC. The claim at sub-paragraph (vi) in relation to Schembri should be permitted to proceed but be limited to the $16,341.60 in respect of a site allowance identified at [288] of the Watson Report.[48]

[48]Ibid, [44].

In respect of paragraph 22 of the proposed 4FASOC, the GL 20 Aug 21 letter outlined the problems, including a failure by the plaintiffs to provide particulars in the absence of supporting opinions in the Watson report. It set out the deficiencies with the proposed 4FASOC by reference to the Watson report. Again, these problems were basically accepted by the plaintiffs in the Annexure A table.

The plaintiffs’ acceptance of these problems shows, as a matter of substance, the severe disconnect between the particulars and proposed pleadings. It demonstrates that they need to change the particulars. So the matter should be over. The problems were raised in detail by the GL 20 Aug 21 letter and now the plaintiffs want until December 2021 to fix them.

The June 2021 particulars were provided at a time when they necessarily constituted particulars of the 3FASOC. However, the plaintiff stated in the PA 2 Aug 21 letter that they intend to rely upon the particulars of the 3FASOC as particulars for the proposed 4FASOC. They cannot.

The GL 20 Aug 21 letter refers to the delay event four allegation.[49] That is, the allegation that the CFMEU refused to allow works to be undertaken on Sundays and RDOs, and that this caused critical delays of between 56 and 71 days across different lots, and to the project, and additional costs of $1.53 million. This allegation was introduced into the June 2021 particulars via the Watson report. It improperly seeks to revive an allegation first pleaded, but not particularised, in the FASOC and 2FASOC. That allegation had been abandoned in the 3FASOC. The plaintiffs’ submission that it was not abandoned is untrue. The instructions from Mr Bear to Mr Watson describe delay event four as “February 2011 whole site: request to work on RDOs and weekends [50 days]” and states there “was a delay, initially on S8 but soon to whole of site, due to CFMEU not allowing work to continue, despite the lodging of an application to work on a Sunday or an RDO”. Further, this “delay event is not the subject of a claim in the Proceeding due to apparent concurrency with other delays”. It is an abuse of process to revive the allegation. It is embarrassing and oppressive. It would give rise to prejudice which could not be cured by costs.
[49]The defendants rely upon this letter as submissions.

The GL 20 Aug 21 letter refers to the assertion in the PA 2 Aug 21 letter that “in order to take a proportionate approach in respect of any claim of loss and damage” the plaintiffs would not claim damages in respect of all subcontractors, but confine their case in relation to those subcontractors identified in paragraphs 19 and 22 of the proposed 4FASOC. The subcontractors were earlier the subject of subpoenas. In the event, the subpoenas issued did not go to the question of loss and damage. Now, the recent correspondence from the plaintiffs asserts that the 250 subcontractors are relevant, but no evidence will be led. It is just one of the many reasons why the particulars and pleadings remain in a state of disarray.

By the PA 6 Sept 21 letter, the plaintiffs concede the insufficiency of the particulars to paragraph 22, including sub-paragraphs (f) and (h).[50] However, they indicate that they will press on with paragraphs 19 and 22 of the 4FASOC. The same letter states that “the plaintiffs intend to file and serve revised particulars of such damages by a date before the return of the application to amend, that gives the defendants sufficient time to review them and consider their implications for the position they adopt in relation to the plaintiffs’ application to amend”.[51] The plaintiffs have not done so. The letter states the particulars will be revised “in the manner explained above”.[52] There is no explanation as to how they will revise particulars while refusing to make deletions.
[50]PA 6 Sept 21 letter, [21].
[51]Ibid, [22].
[52]Ibid.

By letter from the ninth defendant’s solicitors, Russell Kennedy, to PA dated 22 September 2021, the plaintiffs were questioned as to the revised particulars.[53] They were sought by 23 September 2021. PA responded by letter dated 22 September 2021.[54] The letter stated the revised particulars could not be provided by 23 September 2021. It did not foreshadow the timetable now proposed by the plaintiffs.
[53]Letter from Russell Kennedy to PA dated 22 September 2021, contained in Exhibit “JN-32” to the tenth Naughton affidavit.
[54]Letter from PA to Russell Kennedy dated 22 September 2021, contained in Exhibit “JN-32” to the tenth Naughton affidavit.

The Watson report includes expert opinion that certain allegations in relation to sub‑paragraphs 22(f) and (h) are not borne out by the evidence reviewed. The plaintiffs remain unable to clearly articulate their claim, and the defendants are unable to plead to it.

The defendants are unfairly prejudiced by further delay in the specific case management sanctions ordered by the Court, namely, if the orders to properly particularise the 3FASOC are again ignored or avoided without any proper explanation.

Further orders

The timetable suggested by the plaintiffs is brazen in light of the history of the proceedings. The punchline is the suggestion they will have until December 2021 to particularise the case. This puts into stark relief some of the circumstances underpinning the summons. The plaintiffs skip over important matters of principle and the history of the proceeding. They have omitted any reference to the proper function of particulars.

Particulars cannot be used to fill the gaps in a deficient pleading.[55] The facts in a civil case emerge from the pleadings.[56] The function of particulars is not to expand the issues.[57] They fill in the picture of the plaintiff’s cause of action. This enables a defendant to have sufficient information as to the case they have to meet.[58]
[55]Wheelahan v City of Casey (No 12) [2013] VSC 316, [25(k)].
[56]Goldsmith v Sandilands & Ors (2002) 190 ALR 370, [2].
[57]Ibid.
[58]Ibid, per Gleeson CJ.

The defendants should not have to file a defence before seeing the Watson report. There should be further self-executing orders made. The defendants have a firm basis for being wary of the plaintiffs’ capacity to provide instructions.

The plaintiffs seek to file and serve and an affidavit of Mr Murray Nugent.[59] The plaintiffs do not seek to file this on the basis of an expert report but because he is associated with the plaintiffs.
[59]Fourth Nathaniel affidavit, [24]-[27].

Mr O’Neill deposes that Mr Nugent has been associated with the plaintiffs and has been providing advice and assistance since July 2012. What has changed for Mr Nugent if he has been assisting since that date? On 17 April 2020, the plaintiffs’ then solicitors wrote to the defendants’ solicitors referring to Mr Nugent.[60] The letter stated, in part:

… Murray Nugent, my client’s key consultant who is finalising material for use in the drawing and settling of the proposed new Statement of Claim, is 66 years of age, has had two heart attacks resulting in the loss of 35% of heart muscle, and has been a lifelong asthmatic. He cannot put himself at risk at this time by attending work premises shared by others, and my client cannot reasonably ask him to do so. Mr Nugent, who is based at Geelong, has already devoted many hundreds of hours of professional time to this case, and has developed a high level of familiarity with the relevant facts, and the electronic and hard copy documents. He has already undertaken a significant part of the work required for the present task. It would be impracticable, in terms of both time and cost, to attempt to replace him now. …[61]

[60]Letter from Mr Bear to GL dated 17 April 2020, contained in Exhibit “JN-14” to the affidavit of James Naughton affirmed on 12 February 2021 affidavit (‘eighth Naughton affidavit’).

[61]Ibid, 27.

Mr Nugent is not advanced by the plaintiffs as an independent expert. His role is unclear. He appears to be a director of a company who is a creditor of the plaintiffs. However, considering the letter cited above, he has spent hundreds of hours on this case, and the Court cannot now have confidence in the provision of an affidavit by him.

The proposed 4FASOC is said by the plaintiffs to elucidate the real issues in dispute and to be efficient. Now it appears that there will be more particulars, another report from Mr Watson, and an affidavit from Mr Nugent. On the plaintiffs’ own case, Mr Nugent has not been able to assist them to brief Mr Watson since April 2020.

Analysis

If the plaintiffs’ claims did not stand dismissed, the amendment application would be disallowed for the following reasons.

The proposed 4FASOC does not contain adequate particulars as to loss and damage. Nor have those particulars been separately provided. This is completely contrary to the case management regime explained in the orders and rulings recited in the background above. The June 2021 particulars are particulars of the 3FASOC. As the plaintiffs concede, they need to be revised. However, no draft has been provided to the Court. Moreover, the particulars rely upon an expert report that the plaintiffs say is deficient. They seek the opportunity to submit a further expert report from Mr Watson. There is no proper explanation as to why Mr Watson was not provided with all information when he was first briefed. The missing information has not been precisely identified. It is apt to cite the recent observations of J Dixon J in Bolitho v Banksia Securities Ltd (No 18) (remitter):[62]

It must again be said that it misconceives an expert’s duty if it be solely defined by a retainer for a party in litigation, as a commitment to advance only the interests of that party. The duty is of a different, wider nature, owed to the community through the paramount interest in the administration of justice. The overarching obligations in the Civil Procedure Act now sit with the Expert Code of Conduct to remind the expert of their paramount duty to the administration of justice and of the new ways in which it is enforceable.

[62][2021] VSC 666 (‘Bolitho’), [2126].

The principles in Aon[63] are applicable. I gratefully adopt the following summary of Aon principles given by in Namberry Craft Pty Ltd & Anor v Watson & Anor.[64]
[63]Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 (‘Aon’).
[64][2011] VSC 136, [31]-[39] (citations omitted).

A decision by a trial judge as to whether to accede to an application for the amendment of pleadings, is a discretionary decision, provided there is power conferred on the judge to make such an order.
In the exercise of such a discretion, Aon Risk Services Australia v Australian National University affirmed the importance, not only to the parties, but to the Court and other litigants, to ensure “just but timely and cost-effective resolution of a dispute between the parties to a proceeding”. French CJ noted there is “an irreparable element of unfair prejudice in unnecessarily delaying proceedings”. In particular, the Chief Justice drew attention to “the waste of public resources”, the “strain and uncertainty imposed on litigants” and “the potential for loss of public confidence in the legal system” arising from adjournment of trials brought about by pleading amendments without adequate justification. Similarly, in Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ referred to the “ill-effects of delay” upon employees and officers of corporations, as well as upon defendant corporations whose ability to plan financially may be affected by a contingent liability.
In Aon, the High Court accepted the principles of case management by the courts, saying:
Such management is now an accepted aspect of the system of civil justice administered by courts in Australia. It was recognised some time ago, by courts here and elsewhere in the common law world, that a different approach was required to tackle the problems of delay and cost in the litigation process.

Further, the High Court in Aon said that the rules concerning civil litigation are no longer to be considered as directed, only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants. As explained by Gummow, Hayne, Crennan, Kiefel and Bell JJ:
In Sali v SPC Ltd Toohey and Gaudron JJ explained that case management reflected:
“[t]he view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court’s lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard ...”

In this vein, their Honours also concluded:
In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

The Court of Appeal in Trevor Roller Shutter Service Pty Ltd v Crowereinforced the reasoning in Aon when it observed:
As we construe Aon, it was about the impropriety of granting a party leave to make a late amendment to a pleading, in circumstances where that party had failed to act expeditiously, and where to allow the amendment was likely to be productive of wasted costs and resources. More generally, Aon may be thought to have re-invigorated the procedural paradigm, to some extent and for some time diminished by JL Holdings, that time, costs and limited judicial resources are relevant considerations in the determination of whether to allow late applications for amendment and invoke other interlocutory processes.

As illustrated in Aon, it is for the applicant seeking the amendment to demonstrate under a proper reading of the applicable Rules of Court, that leave should be granted.
This is not to say that the object of doing justice between the parties is to be ignored. In fact, it is quite the contrary - a just resolution of proceedings between the parties remains a critically important consideration, which will necessarily include as part of that process, a proper opportunity being given to the parties to plead and re-plead their respective cases, should that need arise and the circumstances are present to warrant the discretion being exercised in favour of the grant of the amendment. The principle that a civil trial should be conducted fairly to the parties is beyond controversy. It is a human right enshrined in s.24(1) of the Charter of Human Rights and Responsibilities Act 2006.
Nevertheless, there are to be limits placed upon re-pleading. The High Court in Aon referred to a range of other considerations which need to be weighed in the balance in the exercise of the discretion to grant an amendment to a pleading. The High Court made reference to the following factors:
(a) Whether there will be substantial delay caused by the amendment;
(b) The extent of wasted costs that will be incurred;
(c)Whether there is an irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for, whatever costs may be awarded;
(d)Concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;
(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 when it is sought.

The list of factors referred to in Aon is not exhaustive. In the end, all matters arising in any particular case relevant to the exercise of the power to permit an amendment must be weighed.

Turning now to the application of these factors.

(a) Substantial Delay

There is likely to be substantial delay caused by the amendment. The amendment cannot be regarded in isolation. The plaintiffs have yet to properly particularise their loss and damage, and they seek to also file a supplementary report of Mr Watson and an affidavit from Mr Nugent.

(b) Wasted Costs

There are already significant costs thrown away by reason of the 4FASOC being provided at the time when the defendants were still considering the 3FASOC. There are also wasted costs in respect of the June 2021 particulars that are now sought to be revised. The costs of the amendment application will be significant too, given the length of the hearing and voluminous materials filed. Those costs are wasted.

(c) Irreparable element of unfair prejudice which cannot be compensated by costs

The delay in prosecuting this claim is inordinate. There is general prejudice arising from the delay given the events alleged occurred more than a decade ago. This cannot be compensated by costs.

(d)Concerns of case management arising from the stage in the proceeding when the amendment is sought

I have referred above to the lengthy history of this proceeding. This proceeding was to be listed for trial. The plaintiffs’ failure to have their case ready, five-and-a-half years after the proceeding commenced means that a trial has yet to be listed. The plaintiffs’ conduct of this litigation has caused inefficient use of judicial and administrative resources.

(e) Whether the grant will lessen public confidence in the judicial system

As already discussed, the orders now sought undermine the case management regime already established. This has the potential to lessen public confidence in the judicial system.

(f)Whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought

No satisfactory explanation has been provided. The plaintiffs have not been without legal representation. They have retained four different sets of solicitors. Clearly, the failure of the plaintiffs to properly prosecute this claim lies with them, rather than their solicitors.

This proceeding has well and truly reached the limit for re-pleading referred to by the High Court in Aon.[65]

(g) Other factors

[65]Aon, 213 [98], 217 [112].

I will now address another factor which weighs against granting leave for the proposed 4FASOC. The plaintiffs rely on r 36.01(1)(a) of the Rules, yet the proposed 4FASOC does not meet the requirements of the rule. Rule 36.01(1)(a) provides the Court with the power to order amendment at any stage in the proceeding, for the purpose of determining the real question in controversy between the parties to any proceeding. There are inconsistencies between the proposed 4FASOC and the particulars. The plaintiffs’ Annexure A table effectively concedes this. Moreover, it effectively concedes that the Watson report does not provide a basis for all the proposed 4FASOC amendments. Further, paragraph 5(a)C of the June 2021 particulars states that the plaintiffs are unable to provide particulars of claims for additional costs paid to the subcontractors referred to in 19(a)(i)-(vi) of the 3FASOC. In the context of this, how can the Court be satisfied that there is a proper basis for the amendments which are unsupported by the Watson report or the particulars? The plaintiffs say that it will become evident from future expert reports. That answer is completely unsatisfactory in light of the history of this litigation.

I will refer to several examples to highlight the issues regarding the lack of a proper basis for the pleadings, by reference to the proposed 4FASOC. Paragraph 19 pleads higher costs and delays in relation to Onal Painting, Adwill Bricklayers, and William Pepe. This is contrary to the Watson report.[66] There is no reference in the Watson report to two subcontractors included in paragraph 19 of the proposed 4FASOC, namely Malcolm Tilley or Shotton Group Pty Ltd,[67] nor do the June 2021 particulars provide the cost and delay particulars with reference to them. The Annexure A table states that particulars for the claims for those two subcontractors are presently unable to be provided.
[66]Watson report, 31 [139]-[142], 54 [256], 61 [289].
[67]There is a reference to Shotton Lifts.

For similar reasons, I am not satisfied that paragraph 22 of the proposed 4FASOC has a proper basis. For instance, it includes reference to subcontractor Bushy Park Concrete Pty Ltd. At paragraphs 113-126 of the Watson report, there is a finding that there were no additional costs associated with the subcontractor, as a consequence of the West Homes EBA. Paragraph 22 of the 4FASOC makes a similar plea in respect of subcontractor Hanson Construction Materials. At paragraph 126 of his report, Mr Watson concludes that the increased costs associated with the replacement of this subcontractor was not as a result of the West Homes EBA.

I should add that, as the defendants say, the evidence is that Mr Nugent has long been involved with this litigation. There is no explanation as to why, after so many years, an affidavit from him will assist the plaintiffs. Without any proper basis for the amendments unsupported by the Watson report, it follows that the plaintiffs have not established the amendments are for the purpose of determining the real issues in dispute.

There was a dispute as to whether leave to amend was required in respect of paragraphs 19 and 22 of the proposed 4FASOC. Those paragraphs are different to paragraphs 19 and 22 of the proposed 3FASOC. Paragraphs 19(vii) and (viii) of the proposed 4FASOC list two additional subcontractors. The defendants do not object to those subcontractors, as they say there is reference to them in the Watson report. They object to the 4FASOC on the basis outlined above and say that leave is required to amend. Paragraph 22 of the 4FASOC is in the same form as paragraph 22 of the 3FASOC. Leave would not be required to amend a pleading that is unchanged. However, as discussed above, this is not the issue. The issue is whether there is a proper basis for the pleading and, as discussed above, I am not satisfied that there is.

As a matter of completeness, I will now address the dispute regarding paragraph 12A(a)(ii) of the proposed 4FASOC.

The plaintiffs accepted the defendants’ concern that paragraph 12A(a)(ii) of the proposed 4FASOC was too wide. I refer to the concession in the PA 6 Sept 21 letter.

3.The Plaintiffs accept that sub-paragraph 12A(a)(ii) of the proposed pleading (proposed 4FASOC) indicates that a claim for loss and damage occasioned by the CFMEU of work practices on the Pentridge Site is pursued (that is, work practices that are not connected to application of CFMEU Pattern Agreement terms and conditions or equivalent). This was not our intention. Accordingly, the form of paragraph 12A in respect of which the Plaintiffs will seek leave to amend will be that as contained in the revised proposed 4FASOC attached.

There is no objection to revise paragraph 12A(a)(ii) of the proposed 4FASOC in the following form.

(ii)submitting to work practices on the Pentridge Site applied under the prescriptions in a CFMEU Pattern Agreement concerning work cycles and rostered days off, and inclement weather.

There was a dispute as to whether the plaintiffs had earlier abandoned the claim that there was loss and delay arising from the application of pattern enterprise arrangements across the Pentridge Village site and whether they sought to revive it in the June 2021 particulars (paragraph 1(a)). This was pleaded in the 2FASOC at paragraph 30:

The restrictive pattern terms and conditions caused increased cost and delay for the Pentridge Site project.
Particulars
The pattern terms and conditions imposed restrictions on the performance of work at nights, on weekends, on public holidays and on rostered days off which did not previously exist.These restrictions delayed the schedule of work.
Further particulars will be provided after discovery and the return of subpoenas, and upon the provision of expert reports.

This plea was not abandoned. There is a similar plea in the 3FASOC at paragraph 18. By that paragraph, the plaintiffs alleged that the CFMEU required all subcontractors to enter into their enterprise agreement or otherwise provide equivalent terms and conditions to their employees. In paragraph 18(i) it is pleaded this “imposed higher costs of working on subcontractors”; and (ii) “imposed restrictive conditions on subcontractors’ methods and timing of work such that their work took longer to complete.” Paragraph 4 of the June 2021 particulars lists those subcontractors.

Mr Bear’s initial letter of instructions dated 12 October 2020 stated that delay event four was not the subject of a claim in the proceeding due to apparent concurrency with other delays.[68] He referred to delay event four as “February 2011 whole site: request to work on RDOS and weekends [50 days]”. However, Mr Bear’s later emails containing instructions to Mr Watson, both sent on 31 May 2021, referred to delay event four and briefed Mr Watson on it.[69] The 31 May 2021 email refers to delay event four differently to the 12 October 2020 letter of instructions. Delay event four is referred to as delays following the imposition of the enterprise agreement in July 2010 and the CFMEU’s refusal to allow subcontractors to work on RDOs and weekends.[70] The Watson report appears to address delay event four utilising this changed definition.[71] The calculation is that between 56 and 71 potentially productive days were lost in respect of four lots.[72]
[68]Letter of instruction from Mr Bear to Mr Watson, contained in the Waton report, 122.
[69]Ibid, 158-159.
[70]Ibid.
[71]See for example, Watson report, [5.4].
[72]Ibid, [361].

To conclude in respect of paragraph 12A(a)(ii): the parties have reached a resolution regarding the form of wording. I accept that the plaintiffs did not abandon the allegation.

Conclusion

The proceeding stands dismissed save for the matters referred to in paragraph 4(c) of the self-executing orders made on 18 Feb 21. I will give the parties an opportunity to make submissions on the orders consequential to this ruling.

SCHEDULE OF PARTIES

S CI 2016 02556
BETWEEN:
PENTRIDGE VILLAGE PTY LTD (In Liquidation) (ACN 087 151 068)	First Plaintiff
WEST HOMES AUSTRALIA PTY LTD (Receivers and Managers Appointed) (ACN 004 964 185)	Second Plaintiff
LEIGH CHIAVAROLI	Third Plaintiff
- v -
CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION	First Defendant
OLIVER BILL	Second Defendant
JOHN SETKA	Third Defendant
IVAN DADIC	Fourth Defendant
KEN HARDY	Fifth Defendant
ANTON SUCIC	Sixth Defendant
GERALD BENSTEAD	Seventh Defendant
SHAUN REARDON	Eighth Defendant
MARIO AMENTA	Ninth Defendant

[2021] VSC 848

17 December 2021