Perry v Nicholls

[2003] WASC 256

PERRY -v- NICHOLLS & ANOR [2003] WASC 256

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2003] WASC 256
Case No:	CIV:2036/2003	Heard:	5 DECEMBER 2003
Coram:	MASTER SANDERSON	Delivered:	18/12/03
No of pages:	9	Judgment Part:	1 of 1
Result:	Judgment for second defendant against plaintiff
Category:	B
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Parties:	SANDRA ELIZABETH PERRY DAVID WILLIAM NICHOLLS THE CITY OF ARMADALE
Catchwords:	Practice and procedure Application by second defendant for summary judgment based on Limitation Act Turns on own facts
Legislation:	Limitation Act 1935, s 47A
Case References:	Perre v Apand Pty Ltd (1999) 198 CLR 180 Sutherland Shire Council v Heyman (1984) 157 CLR 424 Anderson v Effex Seven (1983) 10 ANZ Cas 61-424 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Graham Barclay Oysters v Ryan (2002) 194 ALR 337 Hawkins v Clayton (1988) 164 CLR 539 Kimberley Downs Pty Ltd v The State of Western Australia, unreported; SCt of WA; Library No 6414; 1 October 1986 Matheson v Commissioner of Main Roads [2001] WASCA 402, (2001) 25 WAR 269 Pilbara Iron Ltd v Bonotto (1994) 11 WAR 348 Pyrenees Shire Council v Day (1998) 192 CLR 330 Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431 Sparham-Souter v Town Country Developments (Essex) Ltd [1976] QB 858 Sullivan v Moody (2001) 207 CLR 562 Sutherland Shire Council v Heyman (1985) 157 CLR 424

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : PERRY -v- NICHOLLS & ANOR [2003] WASC 256 CORAM : MASTER SANDERSON HEARD : 5 DECEMBER 2003 DELIVERED : 18 DECEMBER 2003 FILE NO/S : CIV 2036 of 2003 BETWEEN : SANDRA ELIZABETH PERRY

Plaintiff

AND

DAVID WILLIAM NICHOLLS
First Defendant

THE CITY OF ARMADALE
Second Defendant

Catchwords:

Practice and procedure - Application by second defendant for summary judgment based on Limitation Act - Turns on own facts

Legislation:

Limitation Act1935, s 47A

Result:

Judgment for second defendant against plaintiff

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Category: B

Representation:

Counsel:

Plaintiff : Mr M E Herron
First Defendant : Mr M J Sheehan
Second Defendant : Mr I R Freeman

Solicitors:

Plaintiff : H Kremer & Co
First Defendant : Minter Ellison
Second Defendant : Phillips Fox

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

Perre v Apand Pty Ltd (1999) 198 CLR 180
Sutherland Shire Council v Heyman (1984) 157 CLR 424

Case(s) also cited:

Anderson v Effex Seven (1983) 10 ANZ Cas 61-424
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Graham Barclay Oysters v Ryan (2002) 194 ALR 337
Hawkins v Clayton (1988) 164 CLR 539
Kimberley Downs Pty Ltd v The State of Western Australia, unreported; SCt of WA; Library No 6414; 1 October 1986
Matheson v Commissioner of Main Roads [2001] WASCA 402, (2001) 25 WAR 269
Pilbara Iron Ltd v Bonotto (1994) 11 WAR 348
Pyrenees Shire Council v Day (1998) 192 CLR 330
Romeo v Conservation Commission of the Northern Territory (1998) 192 CLR 431
Sparham-Souter v Town Country Developments (Essex) Ltd [1976] QB 858
Sullivan v Moody (2001) 207 CLR 562
Sutherland Shire Council v Heyman (1985) 157 CLR 424

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1 MASTER SANDERSON: This is the second defendant's application for summary judgment. Alternatively, the second defendant seeks to strike out the plaintiff's statement of claim. The application was brought more than 21 days after the second defendant entered an appearance and therefore leave is required to make this application. The grant of leave is opposed by the plaintiff.

2 The reasons for the delay in the second defendant bringing this application are explained in the affidavit of Tobias Richard Barrie ("Mr Barrie"), sworn 12 November 2003. The position is as follows. The plaintiff filed its writ of summons endorsed with a statement of claim on 22 August 2003. The second defendant entered an appearance on 5 September 2003. The memorandum of appearance was served on the plaintiff's solicitor under cover of a letter dated 11 September 2003. Mr Barrie says that soon after receiving the statement of claim he reached the conclusion that it was deficient. On 17 September 2003 he wrote to the plaintiff's solicitor outlining the alleged defects. That letter was dispatched on 19 September 2003. By facsimile dated 24 September 2003 the plaintiff's solicitor indicated that he would refer the complaints about the statement of claim to counsel. He also said that it would not be possible to comply with the requirement to respond within seven days.

3 By facsimile dated 30 September 2003 the second defendant's solicitor advised the plaintiff's solicitor that if there was no response to the earlier correspondence by 6 October an application would be made to strike out the statement of claim. By facsimile dated 2 October 2003 the plaintiff's solicitor advised that he did not agree the statement of claim was defective. The second defendant's solicitors then advised that they would move to strike out the statement of claim. In fact, the application to strike out was not made until 21 October 2003. There is no explanation as to why it took from 2 October to 21 October to bring the application.

4 In all the circumstances I am satisfied that this is a case where the extension of time ought be granted. True it is that the application ought to have been brought on or before 27 September. It was made some three weeks out of time. But notice had been given to the plaintiff's solicitor in stark terms of the second defendant's complaints about the statement of claim: see exhibit "TRB1" to Mr Barrie's affidavit. The plaintiff can point to no prejudice in the delay in bringing this application. Furthermore, the matters raised by the application are of considerable importance and in my view, it would be in no-one's interest if the second defendant's complaints were left unresolved. For all of these reasons I am

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satisfied that there ought be an extension of time within which to bring this application.

5 Before dealing with the second defendant's application I should say something of the nature of the plaintiff's action against the second defendant. The plaintiff is the registered proprietor of a residential property in Armadale ("the property"). The property is within the municipality controlled by the second defendant. It is pleaded that in or about 1984 a builder constructed a residence on the property for the then registered proprietors of the property. Plans for the building were submitted, so it is pleaded, to the second defendant. On 20 August 1984 the plaintiff says the second defendant "by its building surveyor" approved the drawings and designs and issued a building licence which contained certain terms and conditions. The plaintiff says that the footings were defective in that they did not comply with the terms of the West Australian Uniform Building By-laws. Alternatively, it is said that the drawings were defective in that the design of the footings did not allow for suitable footings to be provided where necessary to reduce to intensity of the pressure of the building on the foundations. This, too, is said to be a breach of the Uniform Building By-laws.

6 The plaintiff says that as a consequence of the inadequate or defective footings, the building erected on the property suffered damage. This is pleaded by par 14 of the statement of claim which is in the following terms:

"In or about October 2001 cracking and consequential damage to the internal walls and ceilings of the residence first appeared which gradually worsened and deteriorated during 2001 and 2003."

7 The plaintiff acquired her interest in the property in 1992. At that stage she had only a half interest in the property. In December 2001 she acquired the full fee simple. She has resided in the property since 1996. The duty of care allegedly owed by the second defendant to the plaintiff is pleaded in par 18, 19 and 20 of the statement of claim. Because of the importance of these paragraphs I will quote them in full:

"18. Further, or alternatively, the Second Defendant pursuant to S 661 of the Local Government Act had the power and was under a statutory duty of care:

18.1 To ensure that the building plans including the footing designs requiring its approval before the

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residence was permitted to be constructed complied with and were not defective in breach of the Western Australian Uniform Building By-Laws and were adequate for the purpose of the building to be constructed on the prevailing soil conditions.

18.2 To inspect all footings and subsoil drains prior to the concrete slab being poured.

18.3 Direct compliance with the By-Laws and the conditions of building licence pleaded in paragraph 10 above.

19. By approving the defective and inadequate footing designs prepared by the First Defendant the Second Defendant was in breach of its duty of care to the Plaintiff as a subsequent purchaser and registered proprietor of the property upon which the residence was constructed as pleaded in paragraphs 7 to 9 above.

PARTICULARS


19.1 Failed to properly or at all inspect the footings and subsoil drain.

19.2 Gave approval to and permitted construction of the residence, including construction of the footings and subsoil drain which were defective and inadequate and in breach of the By-Laws.

19.3 Failed to direct compliance with the By-Laws and the terms and conditions of licence pleaded in paragraph 10 above.


20. Further or alternatively by reason of the matters pleaded in paragraphs 7 to 18 above the Second Defendant was under a duty of care to the Plaintiff."

8 It must be said in relation to par 20, that it is difficult to see how a duty of care can arise in relation to matters pleaded in par 7 to 18. These paragraphs provide the narrative which, so far as the second defendant is concerned, led to the second defendant approving the plans and specifications. Paragraphs 16 and 17 deal with allegations of breach of

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duty by the plaintiff against the first defendant, a consulting engineer who designed the footing. How the narrative and the allegations raised against the first defendant tie in with the second defendant is by no means clear. I will have more to say about the pleading generally later in these reasons.

9 The second defendant says that the plaintiff has failed to comply with the provisions of s 47A of the Limitation Act. That being so, it is said that the action is statute-barred and that the second defendant is entitled to summary judgment. Section 47A of the Limitation Act is in the following terms:

"47A.Protection of persons acting in execution of statutory or other public duty

(1) Notwithstanding the foregoing provisions of this Act but subject to the provisions of subsection (2) and (3), no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority, unless ¾


(a) the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b) the action is commenced before the expiration of one year from the date on which the cause of action accrued,


and for the purposes of this section, where the act, neglect, or default is a continuing one, no cause of action in respect of the act, neglect, or default accrues until the act, neglect or default ceases but the notice required by paragraph (a) may be given and an action may thereafter be brought while the act, neglect or default continues."

10 It is important to note the two elements of s 47A. First, there is the requirement of notice. This notice must be given "as soon as practicable after the cause of action accrues". Secondly, the action must be

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commenced within one year from the date on which the cause of action accrued. The crucial question then in this case is - on what date did the cause of action accrue?

11 It would seem from the pleading that the cause of action accrued in October 2001. By par 14 it is pleaded that as at that date, structural damage to the internal walls first appeared. That would mean it was up to the plaintiff to give the second defendant notice of the damage as soon as practicable after October 2001. It would also mean that any action against the second defendant would have to be taken prior to October 2002. In fact, the plaintiff first notified that defendant of the damage by letter dated 13 September 2002: see affidavit of Brian Moralee ("Mr Moralee"), sworn 12 November 2003, par 6. The writ was issued on 22 August 2003. On the plaintiff's pleaded case then, it is clear there has been no compliance with s 47A. The present claim then is statute-barred and the second defendant is entitled to summary judgment.

12 On behalf of the plaintiff it was said that although the cracking was first noticed in October 2001, it was not until late August 2002 after receiving advice from a consulting engineer, that the plaintiff was able to say that the cracking arose as the result of defective footings: see par 8 and 9 of the plaintiff's affidavit, sworn 21 November 2003. That being the case, so it was submitted notice had been given as soon as practicable after the cause of action accrued and the action had been commenced within 12 months.

13 With respect, the authorities make clear that damage is sustained at the time when the inadequacy of the foundations is first made known or becomes manifest: see Sutherland Shire Council v Heyman (1984) 157 CLR 424 per Deane J at 505. The plaintiff's own statement of claim pleads that the damage became manifest in October 2001. Given the way the pleading is structured, there is no scope for arguing that the cause of action arose on a date later than October 2001. But even if the pleading were amended to refer to some later date, it is clear in my view that the cause of action arose when the cracking and consequential damage to the internal walls and ceilings first appeared. So the plaintiff's claim falls foul of s 47A.

14 It was also argued on behalf of the plaintiff that there was continuing damage - that is to say, the condition of the building is continuing to deteriorate. Presumably this argument was put in an attempt to bring the plaintiff within the last part of s 47A relating to continuing defaults. But this is not the type of continuing default anticipated by the last part of

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s 47A. The actual default on the part of the second defendant took place when, as alleged by the plaintiff, it approved the defective footing. The cause of action accrues when damage is suffered - that is, when the defect is known or becomes manifest. In that sense there is no continuing default. While the condition of the premises may worsen, meaning that the cost of putting the problem right may increase, that is a question that goes to the measure of damages. It is not a continuing breach of the duty of care. The last part of s 47A has no application to this case.

15 Having reached the conclusion that the second defendant is entitled to summary judgment, I need not deal with the application to strike out the plaintiff's statement of claim. But as this aspect of the application was fully argued and as there is a prospect that leave may be given under s 47A(3), it is appropriate that I make some general comments about the way the claim is presently structured.

16 The first point to make is that the plaintiff's claim, no matter how it is grounded, is a claim for economic loss. It is true that the fabric of the building has been damaged as a consequence of the inadequate foundations, but the measure of the plaintiff's loss is the difference in value between the property with the cracked walls and ceilings as against the value there being no cracking of the walls and ceilings. That this is the proper measure of damages is made clear by Deane J in the Sutherland Shire Council case. That being so, the particular rules which apply to claims for economic loss will apply in this case: see Perre v Apand Pty Ltd (1999) 198 CLR 180. That means that the matters upon which the duty of care depend are a combination of foresight of the likely harm, knowledge or means of knowledge of an ascertainable class of vulnerable persons who are unable to protect themselves from harm, the fact that implying a duty would not impair the legitimate pursuit by the second defendant of its own commercial interests and the fact that the damage flowed from the occurrence of activities within the second defendant's control. Put another way, the second defendant must have assumed some duty towards the persons who were originally constructing the dwelling on a property and they must have led those persons to believe that they could rely upon the second defendant's decision-making.

17 Clearly, at present, the basis of the duty owed by the second defendant to the plaintiff is not properly pleaded. The mere fact that the second defendant requires that plans and specifications be approved by it before construction of a dwelling is not, in my view, sufficient to ground a duty of care in a case such as this. That is not to say that a duty may not arise. It is not at all uncommon for local authorities to be under a duty to

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persons constructing dwellings within their municipality. But the present pleading does not contain sufficient material facts to ground such a plea.

18 The plaintiff does seek to rely upon s 661 of the Local Government Act. However, s 661 is permissive in nature. It permits, but does not require, the local authority to do certain things with respect to buildings within its municipality. I am unable to see how a duty of care could arise out of s 661. That section may form part of the matrix of fact which give rise to a duty of care and it may be relevant to that extent. But standing by itself, it does not establish a duty of care, statutory or otherwise.

19 In the circumstances, it is inappropriate that I comment further on the present statement of claim. It is sufficient if I say that as the pleading stands at present, the duty of care is not adequately pleaded and the statement of claim, in its present form, could not stand. Once the duty of care is repleaded, then other aspects of the pleading may well fall into place. Those are matters for another day.

20 In the circumstances then, I would enter judgment for the second defendant against the plaintiff. The plaintiff should pay the costs of this application, including reserved costs, and the costs of the action.