The Owners - Strata Plan No 8075 v ESH Group Pty Ltd

[2019] NSWDC 171

District Court

New South Wales

Medium Neutral Citation:	The Owners - Strata Plan No 8075 v ESH Group Pty Ltd [2019] NSWDC 171
Hearing dates:	27 March 2019
Date of orders:	27 March 2019
Decision date:	27 March 2019
Jurisdiction:	Civil
Before:	Letherbarrow SC DCJ
Decision:	1. I refuse to grant leave to the defendants to rely upon the two reports in question. 2. I dismiss the defendants’ application to vacate the hearing.
Catchwords:	CIVIL PROCEDURE — Experts reports served in breach of Court orders – Leave to rely upon – Exceptional circumstances - Hearings – Adjournment application
Legislation Cited:	Uniform Civil Procedure Rules 2005, Part 31.28 Civil Procedure Act 2005, ss 56 – 60 Practice Note DC (Civil) No 1, Standard Orders For Hearings
Category:	Procedural and other rulings
Parties:	The Owners – Strata Plan No 8075 (plaintiff) ESH Group Pty Ltd (first defendant) Melhem Civil Engineering Pty Ltd (second defendant) 19A Frazer Street Collaroy Pty Ltd (third defendant) ESH Holdings Pty Ltd (fourth defendant) EB Property Holdings Pty Ltd (fifth defendant) The Hadd Group Pty Ltd (sixth defendant)
Representation:	Counsel: R Perla (plaintiff) P Folino-Gallo (first, second, third, fourth and fifth defendants)     Solicitors: Turks Legal (plaintiff) Blackstone Waterhouse Lawyers (first, second, third, fourth and fifth defendants) The Hadd Group (sixth defendant)
File Number(s):	2016/00285463
Publication restriction:	None

Judgment

1. This matter is listed for hearing today. Such hearing was allocated to another judge of this Court yesterday afternoon. At the outset of today’s hearing before that judge, the six defendants sought leave to rely upon two experts' reports which had not been served in accordance with prior court orders. It is accepted by the legal representatives of the defendants that pt 31.28 applies in that they must demonstrate that there are exceptional circumstances that warrant the granting of the leave sought. The six defendants also sought that the hearing be vacated so that the plaintiff had time to meet such reports.

2. The evidence on the application, which was essentially argued by Mr Folino-Gallo, who is counsel for the first to the fifth defendants, comprises an affidavit of his instructing solicitor, Mr Venothan Panicker, sworn 26 March 2019. Mr Kazzi, solicitor for the sixth defendant, did not tender any evidence on the application. Mr Perla, counsel for the plaintiff, in opposing the application, tendered an email and a letter in relation to the service of another report which I will mention in a moment.

3. The two reports in question are exhibits B and C. A report served within time by the defendants, being from a Mr Najm, dated 24 October last and served on 29 November last, became exhibit D.

4. Some history in relation to the matter needs to be recited. The claim arises out of building works conducted next door to the plaintiff’s unit block.

5. It is alleged that such building work caused a wall to collapse and damage the plaintiff's unit block. This building work was undertaken between December 2013 and August 2014.

6. The statement of claim was filed on 23 September 2016 and the matter is, therefore, now over two and a half years old. This Court has time limits and currently there are only 85 matters in this Court's lists which are greater than two years old. I know this because of statistics I was provided with yesterday. In other words, only a very small percentage of the literally thousands of hearings that this Court deals with each year have not been finalised within two years. This matter has been case managed by the judicial registrar since January 2017. He has had it before himself for various directions more than a dozen times.

7. In relation to the service of expert evidence, the plaintiff, I am told by Mr Perla, complied with all court orders in relation to the service of its evidence.

8. The first order that the judicial registrar made in relation to the defendants' evidence was on 2 November 2017, when he ordered the defendants to serve their evidence by 23 February 2018. Such order was not complied with. The next order was made on 4 June 2018 when the judicial registrar ordered the defendants to serve their evidence, meaning all their evidence, by 28 September 2018. That order was also not complied with.

9. On 25 October 2018, the registrar extended time for all the defendants to serve their lay and expert evidence to 29 November 2018 and directed that the defendants would not be entitled to rely upon any evidence not served in accordance with that order without leave. That third order resulted in, as I understand it, exhibit D being served.

10. The matter was set down for hearing by the judicial registrar on 31 January 2019 for three days commencing today. At that time there was no suggestion made by the representatives for the defendants that they needed any further evidence.

11. On 22 March last, the sixth defendant terminated its solicitors who were, up until that point, acting for it as well as for the first to fifth defendants. Mr Kazzi, in-house counsel of the sixth defendant, has recently taken over the matter for the sixth defendant.

12. The reports for which leave is sought were both requested from the relevant experts well after 29 November 2018, being the last date upon which the defendants could serve their expert evidence. In this respect, the report from the geotechnical engineer, Mr Davies, was requested on 18 March last, a little over a week ago. The report from Mr Abbott was requested on 20 March last, being a week ago.

13. The explanation for this late seeking of further expert evidence is partially set out in the affidavit of Mr Panicker. A number of matters are referred to in paragraph 4 thereof. The first is that apparently there were settlement negotiations going on. Of course, parties should not stop preparing matters for hearing because they hope to settle them. The second matter referred to in Mr Panicker's affidavit is that another expert instructed by him was ANA Civil. Mr Panicker states in his affidavit that ANA Civil had communicated a conflict of interest and, therefore, it was necessary to look elsewhere. I was told during argument that ANA Civil were not retained until December 2018, again after the time that the defendants were ordered to have served all their reports.

14. Mr Panicker goes on to rely upon his removal as instructing solicitor for the sixth defendant. Why this meant that finalising the evidence did not occur in accordance with the timetable I do not understand.

15. The final matter referred to is his need to take instructions from entities "related to the first defendant but who did not have any role in the works the subject of the proceeding". This aspect was not developed in argument by counsel for the first to fifth defendants, Mr Folino-Gallo, and, if there were other witnesses that needed instructions to be taken from, it would seem to me that the relevant defendants had literally years to do so.

16. In argument, Mr Folino-Gallo relied upon, in addition to Mr Panicker's affidavit, the fact that he had been provided with a "tender bundle" of documents of which he is presently unsure he can meet. Such bundle of documents is not before me and I do not know what it contains. Mr Perla informed me that if any of those documents were not to be admitted by the trial judge, if the matter is referred back to him, Mr Perla would not seek an adjournment. The admissibility of whatever may be in this tender bundle, in my view, is a matter for the trial judge.

17. Finally, Mr Folino-Gallo argued that if the two said reports are not admitted into evidence, his clients will not have the benefit thereof and will be prejudiced in their defence of the claim.

18. Mr Perla argued that the plaintiff has served all its evidence in accordance with the court orders. He argues that the geotechnical engineer's report was served in April 2018 and that the defendants have had many months thereafter to serve their own report in response.

19. Mr Folino-Gallo argued that the report, which is exhibit D and which was served within time by the defendants, suggests in paragraph 7.4 that further evidence is needed and that is what led to the instruction of the two further experts. I must admit I do not read paragraph 7.4 in that way. In any event, the plaintiff had served its geotechnical engineer's report, as I said, in April 2018 and one would have thought that that would have suggested to the defendants that they might need a report in response.

20. More importantly, Mr Perla indicates that the plaintiff's experts, whose reports, as I have said, have been served in accordance with the Court’s orders, have not been required for cross-examination by the defendants and neither of those experts have been arranged to attend, this being the task of the defendants if they wanted them for cross examination. Mr Perla also complains that the geotechnical report sought to be admitted was served at 10pm last night and the other report, being from a forensic building expert, Mr Abbott, was served at 9 o'clock this morning.

21. Looking back over the matter as a whole I do not see any exceptional circumstances, as that phrase is understood, which would ground the granting of the leave sought.

22. Turning to the adjournment application, when matters are set down in this Court, the Court makes, pursuant to Practice Note DC (Civil) No 1, what are called the "Standard Orders for Hearings". Paragraph 13 thereof provides that, subject to ss 56 to 60 of the Civil Procedure Act, hearings will only be vacated or adjourned where there are very good reasons. These must be demonstrated by the party seeking the vacation or adjournment. The unavailability of counsel or a failure to comply with court orders or to properly prepare the matter for hearing will normally not be sufficient reasons.

23. Paragraph 14 goes on to state that an application for an adjournment must be made by way of a notice of motion with an affidavit in support and must be made at the earlier possible time. As I said, these “Standard Orders for Hearings” are made pursuant to Practice Note DC (Civil) No 1. Paragraph 12 thereof is a more lengthy form of paragraphs 13 and 14 of such orders. The practice note itself states in paragraph 12.2 that parties “who breach orders may be restricted in the evidence which they can rely on at the hearing."

24. Of course, these standard orders and the provisions of the practice note must be read pursuant to ss 56 to 60 of the Civil Procedure Act.

25. Here, the two subject reports were not even requested until after the time had run out for their service. One would have thought that, when it became apparent that further evidence was necessary, apart from contacting the experts, the matter would have been relisted before the Court so that the defendants could, at the earliest possible time, seek an order like they are seeking today.

26. There is no explanation in the affidavit as to why this application is being made on the day of the hearing. It seems to me quite a strong inference that those appearing for the defendants hoped to settle the matter but that when this did not happen, they then started to put more effort into its preparation.

27. If these reports are let into evidence at this point in time, this matter will have to be adjourned. The plaintiff will no doubt require further expert evidence in response and there will have to be conclaves between all the experts. All this is likely to result in the matter being delayed somewhere between six and 12 months. I say that as, sitting as list judge, I receive each day a list of available dates within this Court.

28. In other words, to make the orders sought will not result in the quick disposal of these proceedings. The orders will also not result in the proceedings being dealt with cheaply as the matter has been set down for three days and counsel and solicitors and a number of witnesses are no doubt available.

29. Returning to the issue of delay, I should also have indicated that, whilst this may now be a three day matter, if these experts' reports are let in and the hearing vacated and further evidence is obtained from the plaintiff's experts or from experts retained by the plaintiff, this hearing is likely to be considerably lengthened and may quite easily extend beyond five days. At the moment, five day hearing dates are almost a year off in this Court, so the delay that I referred to earlier, in fact, is likely to be quite an extensive one.

30. Looking at the justice of the situation, the defendants do have some expert material they can utilise. In circumstances where it seems to me that the preparation of the matter has been left till very late in the piece, the justice of the situation as do the issues of delay and cost, lead me to the view that it would neither be just, quick nor cheap to make the order sought nor are there very good reasons in support of them. Rather the defendants’ preparation seems to have been poor. Accordingly, I refuse to grant leave to the defendants to rely upon the two reports in question and I dismiss the defendants’ application to vacate the hearing. I therefore, refer the matter back to his Honour Judge Abadee for hearing.

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Decision last updated: 10 May 2019