Stiller v Palm

[2006] QDC 262

[2006] QDC 262

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No D20 of 2006

ALAN STILLER and BERYL ANN STILLER	Plaintiffs
and
DARREL PALM and ANDREW PALM	Defendants

BRISBANE

..DATE 12/07/2006

ORDER

CATCHWORDS:  Uniform Civil Procedures Rules r 899 - failure by defendants to perform obligations under a consent order to complete manufacture of a customized machine - order to be varied to require the plaintiffs to perform the objection if the defendants failure was not remedied within 21 days, the defendants becoming liable for "necessary costs and charges" caused by their default - order conditional on undertaking of plaintiffs to indemnify defendants against liabilities arising after their assuming possession of the machine.

HIS HONOUR: This is an application, of a kind novel in my experience, in which the plaintiffs seek to use rule 899 of the UCPR which is entitled "Substituted Performance".

The proceeding comes from Rockhampton where the Judge is unavailable to deal with it.  It concerns a triple rotor slasher machine which the defendants agreed to manufacture for the plaintiffs.  They paid some $22,000 for it but were disappointed in the product which appears to have been condemned by the authorities and specifically the Office of Workplace Health and Safety.

The Statement of Claim in the proceeding seeks damages, including consequential losses, in a sum exceeding $54,000 and, in addition, specific performance by the defendants of the agreement to produce a machine of what might be called merchantable quality or one fit for its purpose.

Eventually, the parties filed in the Rockhampton Registry a signed consent document which was replicated in an order made by the Registrar in Rockhampton on the 16th of May this year.  It provided in some detail for the completion by the defendants of a new slasher which would satisfy the relevant authorities.  The plaintiffs, who are in Goondiwindi, are retaining the unsatisfactory "mark-1" slasher, presumably as security, while the defendants attend to the manufacture of its replacement in Rockhampton.

A timetable was agreed to by the parties and incorporated in the order.  The defendants have fallen behind, the 26th of May 2006 was the date for completion of manufacture of the new slasher.

The plaintiffs have formed the view that there is no point whatever in waiting for the defendants to complete their obligations under the order and seek, pursuant to rule 899, that it be changed, essentially by appointing them to perform the manufacturing functions which the order imposed on the defendants.

Mr Palm Junior has represented the defendants today and proposes that some means be found which enable the manufacturing exercise to be completed by them, perhaps with the supervision of a panel of engineers or other consultants representing all interests, including the relevant State department.  He suggested also mediation.  The Court is not persuaded that any useful outcome within a reasonable time would be forthcoming by following the avenues adverted to by Mr Palm.   

It is prepared to allow him the time he indicated would be required to comply with the Court's order of last May, namely, 21 days which Mr West, for the plaintiffs suggested was about three times as long as would be required.  In my opinion, both convenience and the interests of justice would point to allowing the defendants the 21 days sought so that they might perform their obligations under the order to which they agreed. 

The costs to them, if they do not do so, may be significant. The plaintiff's application, setting out much of the language of rule 899 seeks that the defendants be ordered "to pay the costs and expenses caused by the failure to perform [their obligation under the order]". While acknowledging that the precise terms of the rule have been proposed, it seems to me appropriate to limit the "costs and expenses" to be dealt with in that way to "necessary" ones. Mr West did not oppose that change.

The context is one in which the plaintiffs propose that the defendants should have to pay them "the amount sworn to by the plaintiff, Alan Stiller, in an affidavit filed herein and served on the defendants if not challenged by the defendants on application within 14 days of such service." 

The proposed order is silent about what would happen if, as I suppose is likely, a challenge eventuates.  No doubt, under the liberty to apply reserved in the order directions would be given for a determination in this proceeding of the amount of costs and expenses which the defendants might have to pay. 

The Court is also sympathetic to the defendants' concerns that, should the plaintiffs take over completion of the slasher, they may be faced with liabilities in connection with it in circumstances where they have not been responsible for the final form of the item. 

Mr West, understandably, lacks instructions today to proffer any undertaking from the plaintiffs whereby they would offer indemnity to the defendants if the worst came to the worst. 

Apart from the plaintiffs taking over manufacture, the revised order which the plaintiffs propose makes some other changes: since they are to get immediate possession on their demand of the "mark-II" slasher, they no longer require to retain possession of its predecessor, which in new arrangements the defendants will be required to resume possession of.  Mr West tells the Court (and it may be material) that that is the requirement of the Department in any event.

The Court will make an order in terms of the initialled draft which annexes what may become the varied form of the Registrar's order made in Rockhampton on the 16th of May 2006.  The changes to the draft include the addition of the word "necessary", and correction of the date ascribed to the Registrar's order; it is now to be prefaced by the following additions after "the order of the Court is that:".

And I quote these additions:  "Unless the obligations affecting them set out in the Court's order of 16 May 2006 are fully performed by them within 21 days from today and unless the defendants within 28 days from today file in the Court an affidavit to that effect sworn by some independent person having appropriate expertise, then provided the plaintiffs have filed in the Court their written undertaking, should the plaintiffs take over and complete manufacture of the Triple Rotor Slasher Machine the subject of this proceeding, to indemnify the defendants in respect of any claims by third parties arising in relation to it after the plaintiffs' assuming possession of it..."   That is the end of the addition.

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