Premier Building and Consulting Pty Ltd v Spotless Group Ltd (Ruling No 10)
[2007] VSC 68
•19 March 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 8264 of 2003
| PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367) | Plaintiff |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS | Defendants |
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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST
No. W9/2004
| PREMIER BUILDING AND CONSULTING PTY LTD (ACN 066 568 367) | Applicant |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS | Respondents |
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IN THE VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
REAL PROPERTY LIST
No. W61/2005
| NORTH SUBURBAN PROPERTIES PTY LTD (ACN 065 883 614) | Applicant |
| v | |
| SPOTLESS GROUP LIMITED (ACN 004 376 514) AND OTHERS | Respondents |
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JUDGE: | BYRNE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 December 2006 | |
DATE OF RULING: | 19 March 2007 | |
CASE MAY BE CITED AS: | Premier v Spotless (No. 10) | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 68 | |
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff (Premier) | Mr J Burnside QC with Mr T Boston | Gadens Lawyers |
| For the First, Third and Ninthnamed Defendants (Spotless parties) | Mr S G Finch SC with Mr T J Walker and Mr J Slattery | Freehills |
| For the Secondnamed Defendant (North Suburban) | Mr M Dreyfus QC with Ms Marita Foley | Mirabelli, D’Ortenzio & Co |
| For the Fourthnamed Defendant (Collie) | Mr R Manly SC with Mr M Whitten | Monahan + Rowell |
| For the Seventh Defendant (Kilpatrick) | Mr J R Dixon with Ms R Doyle | Slater & Gordon |
HIS HONOUR:
On day 35[1] of this trial, counsel for the plaintiff sought leave to file and rely upon a witness statement of Kenneth Charles MacLeod dated 12 December 2006. For the most part there was no objection to this course; I rejected objections to certain parts of the witness statement and these parts were accepted in evidence. Having heard argument, I upheld objections to paragraphs 35 to 39 and paragraphs 42 to 43, saying that I would give my reasons later. These are my reasons.
[1]14 December 2006.
The trial is of claims brought by the plaintiff, Premier Building and Consulting Pty Ltd ("Premier") whose land at 227 Barkly Street, Brunswick is contaminated by PCE and White Spirit, chemicals which were in the 1960s and 1970s widely used in the dry cleaning industry. On the property adjoining the Premier land to the east, various companies within the Spotless group conducted a dry cleaning and laundry business in the years from 1960 to 1994 or thereabouts. Furthermore, for about 12 months in 1978-9 a Spotless company conducted dry cleaning activities using PCE on the Premier land itself.
Premier purchased the Premier land in November 1999 at which time it was used for commercial purposes. In 2001-2, Premier constructed 49 residential units on the Premier land, unaware, it is said, of the PCE or White Spirit contamination. In 2002, Moreland City Council, the sixthnamed defendant, refused to permit occupancy of the units unless and until the developer had provided certification that the land was free of contamination and the requirements of the Environment Protection Authority (EPA) satisfied.
Premier now seeks damages from the first, third and ninthnamed defendants ("the Spotless parties") as those companies within the Spotless group which were responsible for the discharge of the contaminants which made their way onto the Premier land. It seeks damages against other defendants, too, for their involvement in the situation in which it found itself in 2002.
The damages sought include the cost of remediating the Premier land as required by the EPA to remove the contaminants. Since the apartments on the Premier land are substantially completed, part of the soil which is to be removed lies under the existing building. Part of the damages claim, therefore, comprises the cost of underpinning the northeast corner of the building and supporting it to enable the contaminated soil underneath, to a depth of some 6m, to be removed and replaced. The cost of this and other remediation work quoted by JA Dodd Ltd was, in December 2005, of the order of $2.8 million of which about $350,000 is the allowance for underpinning.
I need hardly say that the foregoing is a very brief summary of the relevant parts of this case, sufficient only to provide a context for the decision which I have made. Many of the matters which I have set out above are in issue.
The defendants challenged the costs of removal and replacement of the contaminated soil. Accordingly, the work to be done, and therefore to be costed, is an issue at the trial.
The floor slabs which sit on the ground at the northern end of the apartment building are designed and constructed as suspended slabs sitting on concrete pads. The pads under the northeast corner themselves sit on steel screw piles founded at a depth of about one metre into the bedrock which is about four to five metres below the surface. The removal and replacement of the contaminated soil in the northeast corner would require an excavation to a depth of some six metres.
An engineer engaged by Premier for the remediation was MacLeod Consulting. For the purpose of the excavation, they proposed a structure that would support the slabs and the building over upon a number of bored piers founded in the bedrock at an appropriate depth below the required excavation level. A series of beams between these piers would then support the existing building during the excavation.
In the course of the openings at the commencement of the trial, counsel for Moreland outlined the evidence of its engineering witness, John McFarlane. Mr McFarlane in his witness statement dated 28 July 2006 expressed the view that, if excavation below the base level of the existing footing pads was required, the MacLeod underpinning proposal was appropriate. Nevertheless, a less extensive underpinning, with a consequent cost reduction, would be appropriate if the excavations could be limited in depth. He developed this opinion in a further report dated 27 November 2006. He proposed that the costly underpinning might not be necessary if the depth of the excavations under the northeast corner were reduced by up to 0.5 metres at some locations. The depth of the excavation is, of course, a question for the environmental engineers rather than a structural engineer.
This proceeding was commenced by writ filed on 7 October 2003. On 26 August 2004, I assumed its management and have done so up to trial. The trial has been conducted on the basis that the parties gave evidence in chief by witness statement. During the course of the interlocutory process, I fixed the times by which witness statements should be filed. With respect to the witness statements of Premier, I ordered on 29 April 2005 that it file its witness statements by 21 October 2005 and its witness statements in reply to those filed by the defendants by 28 April 2006. These dates were extended on 29 August 2005 to 16 December 2005 and 12 May 2006, respectively. On 12 December 2005, I ordered that any further witness statements by Premier on the remediation issues be filed on 27 January 2006. On 2 February 2006, I extended this last date to 24 February 2006 and the date for Premier's witness statements in reply to 7 June 2006. On 6 July 2006, with the trial commencement date only three months away, I extended the time for Premier's witness statements in reply to 11 September 2006. On this day I also made an order in the following terms:
If any witness statement is not delivered by the due date, the party in default be not permitted to rely upon evidence which ought to have been included in that witness statement unless for good cause shown the Court gives leave.
The trial commenced on 3 October 2006 and, apart from a week during which the parties sought to mediate their disputes, it has continued since then. It is a complicated and unusual trial. This is partly the result of the large number of parties: at the commencement there were no less than 10 parties or groups of parties separately represented. The trial included the issues raised in the litigation and also those raised in two associated VCAT applications which I am hearing concurrently with the litigation. There is a considerable body of expert evidence.
As a matter of the efficient conduct of the trial and with the concurrence of the parties, I directed at the outset that the evidence of expert witnesses of all parties on the environmental issues be clustered together, and this was done. This meant that the evidence called by parties down the schedule of parties was presented before the upstream parties had closed their cases and, further, that witnesses were interposed to suit their convenience and that of counsel and the Court. Within the cluster, however, witnesses were generally called in the order that the parties appeared on the writ.
Mr McFarlane was an expert witness retained by Moreland. When, following settlement, Moreland withdrew from the trial on day 19.[2] Mr McFarlane was then called as a witness by Kilpatrick on day 31. He was cross-examined on that day on behalf of the Spotless parties, North Suburban and Premier and was then excused. His evidence that the existing screw piles might support the northeast corner of the building during excavation was not challenged except on the basis that the building so supported might be unstable under wind load.
[2]13 November 2006.
Mr MacLeod was not included on the list of Premier witnesses and was not mentioned as a witness until it became apparent that the Premier environmental witnesses were not able to deal with the structural aspects of the remediation which they recommended. Accordingly, the design engineer Mr MacLeod was added to the list of witnesses on day 32.[3] His witness statement is dated 12 December 2006. It was circulated in electronic form at the end of that day and in hardcopy on 13 December. The argument as to its admissibility was conducted on Day 35.[4] For the most part, Mr MacLeod’s evidence was uncontroversial and was not objected to. Counsel for Kilpatrick, however, objected to paragraphs 35 to 39 and 41 to 43. Counsel for the Spotless parties objected to paragraph 32. I admitted paragraphs 32 and 41 as these were matters which had been challenged in cross-examination. In paragraphs 34 to 39, the witness offered his opinion that it would not be practicable to carry out the excavation work around the existing screw piles because it “would be unacceptable for occupational health and safety reasons". This contention is not developed other than to assert that it would be unsafe to carry out the excavation in an environment where these piles were closely spaced. If one of the piles were accidentally impacted by an excavating machine, the support for the northeast corner might fail. In paragraphs 42 and 43 he expressed the opinion that it would not be possible for occupational health and safety reasons to carry out excavations outside the Premier land to remove contaminated soil to the north under the buildings at 42 Weston Street.
[3]5 December 2006.
[4]14 December 2006.
Counsel for Kilpatrick submitted that the admission of this evidence would prejudice their client for it would open up issues which had not been previously raised, issues that had not been put to their witnesses and which would require them to explore and perhaps lead evidence on a matter which had not been previously raised. They pointed to the orders which had been made during the interlocutory stages of the proceeding. They accepted that there had been a good deal of flexibility with respect to the witness statements filed out of time, but said that this was an entirely new matter – a matter which had not been put to Mr McFarlane when he gave his evidence a week or so before. They argued that Premier had presented its evidence on this issue and they had responded to this evidence. The McFarlane criticisms of the Premier underpinning proposal had been raised as early as July 2006 when his witness statement was filed, it had been opened by counsel for Moreland at the outset of the trial and the Premier witnesses had been cross-examined on it as early as day 13.[5] Premier should therefore have addressed it when it presented its evidence rather than to lie in wait and then raise the matter in reply. I was reminded of the stringent terms of my order of 6 July 2006 and it was pointed out that no good cause had been shown for the failure to include this in the witness statements of Premier.
[5]24 October 2006
Counsel for Premier said that it was due to an oversight on their part that they had not addressed the occupational health and safety issues. There would be little inconvenience if Mr McFarlane had to be recalled to address this new matter and that the justice of the case required that Premier be permitted to present this evidence. I was reminded of what the High Court had said in Queensland v JL Holdings Pty Ltd[6] about subordinating the interests of case management to those of the rights of a party to present a case which was fairly arguable.
[6](1997) 189 CLR 146 at 154.
The evidence offered in paragraphs 35 to 39 is relevant; that in paragraphs 42 and 43 is not. The question of excavation outside the Premier land is not a matter before me. This said, paragraphs 35 to 39 are little more than bald assertions.
I rejected the evidence on the basis that it would have contravened the procedures which were in place for the management of this complex trial. If the trial had been conducted on a conventional basis Premier would have led its evidence and closed its case. The defendants in turn would then have called their witnesses and closed their cases. Notionally, therefore, we were at a point where Premier had called its evidence as had most of the defendants. Kilpatrick, as the seventhnamed defendant, had called Mr McFarlane as its witness. Premier's position then would have been that of a plaintiff which at this point was seeking to reopen its case to meet an allegation which had been a live issue since the trial began. Accepting, as I do, that there should be a degree of flexibility when normal processes are adjusted to meet the requirements of an unusual case, it would be unlikely that Premier would have been given leave to call this evidence in a conventional trial. Permission to do so in this trial would put at naught the advantages of the trial management which all parties had accepted.
I accept, of course, the observations of the High Court that case management is not an objective which should be allowed to distract the Court from its primary function of doing justice to the parties and of hearing and determining all the real issues between them. Nevertheless, the adoption of novel trial procedures to enable the efficient disposition of large cases such as this one should not be used to enable a party to seize an advantage which it would not otherwise have available to it. In short, parties should be faithful to the spirit of the trial process under which they accept, or which is imposed upon them by the Court, for the proper and efficient disposition of its business.
Accordingly, I declined to permit Premier to rely upon paragraphs 35-39 and paragraphs 42-43 of Mr MacLeod’s statement.
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