Probuild Constructions (Aust) Pty Limited v Shade Systems Limited - [2018] NSWSC 540

Supreme Court

New South Wales

Medium Neutral Citation: Probuild Constructions (Aust) Pty Limited v Shade Systems Limited [2018] NSWSC 540
Hearing dates: 24/04/2018
Date of orders: 24 April 2018
Decision date: 24 April 2018
Jurisdiction: Equity - Technology and Construction List
Before: McDougall J
Decision:
Grant defendant leave to amend its Technology & Construction List Response.

Catchwords: CIVIL PROCEDURE – application to amend Technology & Construction List Response – proposed amendment pleads that maintenance of litigation is unconscionable within the meaning of the Australian Consumer Law – whether proposed amended defence so weak so as to justify peremptory rejection – no rule of law that litigious conduct cannot be conduct in trade or commerce – instead, determining strength of proposed defence will require consideration of the overall evidence – leave to amend granted.
Legislation Cited: Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth))
Building and Construction Industry Security of Payment Act 1999 (NSW)
Trade Practices Act 1974 (Cth)
Cases Cited: Bride v The Shire of Katanning [2016] FCA 65
Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594
Macks v Viscariello [2017] SASCFC 172
Pertzel v Qld Paulownia Forests Ltd [2008] 2 Qd R 526
Category: Procedural and other rulings
Parties: Probuild Constructions (Aust) Pty Ltd (Plaintiff)
Shade Systems Ltd (Defendant)
Representation:
Counsel:
S Robertson (Plaintiff)
D Hume (Defendant)
Solicitors:
Maddocks Lawyers (Plaintiff)
CCS Legal (Defendant)

File Number(s): 2017/172386

Judgment (ex tempore – revised 24 april 2018)

HIS HONOUR: The plaintiff (Probuild) as contractor and the defendant (Shade Systems) as subcontractor made a subcontract on 14 October 2014. Under that subcontract, Shade Systems was to manufacture or supply and install external louvres for an apartment complex being constructed by Probuild for a developer.
In the usual way, the parties fell into dispute. There was an adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW). The adjudicator awarded a little under $280,000 to Shade Systems. That determination has been challenged in this Court, in the Court of Appeal and in the High Court. The primary judge decided the challenge in Probuild's favour, but the Court of Appeal and the High Court took a different view.
While all that was happening, Probuild commenced separate proceedings in this Court claiming liquidated damages for delay. The amount claimed is either $2.35 million or $11.625 million. It is a little unclear how a claim for liquidated damages could have alternatives varying so wildly, but no doubt some unfortunate trial judge will have to grapple with that and many other problems.
Shade Systems wishes to amend its Technology and Construction List Response, in what I will call the liquidated damages proceedings, to assert that the relevant conduct of Probuild in commencing and maintaining the liquidated damages proceedings is unconscionable and in breach of ss 20 and 21 of the Australian Consumer Law [1] .
1. Schedule 2 to the Competition and Consumer Act 2010 (Cth).
It is an integral part of that case that Shade…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWSC 540
Decision Date: 24 April 2018

CaseChat Overview and Summary

Probuild Constructions (Aust) Pty Limited filed an application against Shade Systems Limited in the Federal Court of Australia. The primary dispute centres around the maintenance of litigation, which Probuild claims is unconscionable under the Australian Consumer Law. The matter was heard in the Technology and Construction List. The primary legal issue before the court was whether the proposed amended defence, which alleges that the continuation of litigation by the plaintiff is unconscionable, was so weak that it justified a peremptory rejection. The court had to determine if there was a rule of law preventing litigious conduct from being considered conduct in trade or commerce. If such a rule existed, the court would have had to reject the amendment outright. However, the court found no such rule and held that determining the strength of the proposed defence would require a consideration of the overall evidence.

The court considered that litigious conduct could constitute conduct in trade or commerce, and therefore, the strength of the proposed defence would need to be evaluated in the context of the entire case. The court emphasised that the decision to allow an amendment should not be based on a preliminary assessment of the strength of the proposed defence. Instead, the focus should be on whether the amendment has a real prospect of success and whether it introduces new issues that need to be addressed. The court concluded that the plaintiff's proposed amendment was not so weak that it warranted outright rejection. Consequently, the court granted leave for the defendant to amend its defence to include the allegation of unconscionable conduct by the plaintiff in maintaining the litigation.

The court's decision highlights the importance of allowing parties to present all relevant defences, provided they have a reasonable prospect of success. The court did not dismiss the proposed amendment based on a preliminary assessment of its strength. Instead, it recognised that the strength of the defence would depend on the overall evidence presented in the case. The court's approach ensures that the litigation process remains fair and just, allowing all relevant issues to be considered. The final orders of the court granted leave for the defendant to amend its defence to include the allegation of unconscionable conduct by the plaintiff in maintaining the litigation. This decision ensures that the case proceeds with all relevant issues being addressed, promoting a fair and comprehensive resolution of the dispute.

Orders