The Owners - Strata Plan No. 80751 v Av Jennings (Cammeray)

[2018] NSWSC 1080

Supreme Court

New South Wales

Medium Neutral Citation:	The Owners – Strata Plan No. 80751 v AV Jennings (Cammeray) [2018] NSWSC 1080
Hearing dates:	06/07/2018
Date of orders:	06 July 2018
Decision date:	06 July 2018
Jurisdiction:	Equity - Technology and Construction List
Before:	McDougall J
Decision:	Refuse plaintiff leave to rely on report of Dr Scheirs dated 30 June 2018. Reserve question of leave in respect of two reports for further submissions. Otherwise grant plaintiff leave to rely on further affidavits and reports.
Catchwords:	CIVIL PROCEDURE – application for leave to rely on expert reports and affidavits served out of time – whether in interests of justice to grant leave – where hearing date is upcoming – impractical for defendant to deal with some of the reports in that time – whether hearing date should be vacated – where plaintiff had advance notice of necessity of expert evidence – no satisfactory explanation for delay given – vacation of hearing would create wasted court time – leave partially granted and partially refused.
Legislation Cited:	Civil Procedure Act 2005 (NSW) Home Building Act 1989 (NSW)
Category:	Procedural and other rulings
Parties:	The Owners – Strata Plan No. 80751 (Plaintiff) AV Jennings (Cammeray) Pty Ltd (Defendant)
Representation:	Counsel: DS Weinberger (Plaintiff) S Robertson / M Swanson (Defendant)   Solicitors: Chambers Russell (Plaintiff) Colin Biggers & Paisley Pty Ltd (Defendant)
File Number(s):	2015/363177

Judgment   (ex tempore – revised 6 july 2018)

1. HIS HONOUR: The plaintiff is the Owners Corporation of a strata title development at Cammeray. The defendant is the developer of that property, for the purposes of the Home Building Act 1989 (NSW). The Owners Corporation's case is that the property is affected by defects. It sues the developer pursuant to the warranties implied by section 18B of the Home Building Act. As I understand it, the builder is a cross-defendant, and so also is a particular contractor engaged by the builder.

2. In March this year, orders were made setting the matter down for hearing, estimated to take 10 days, to commence on 13 August 2018. The usual order for hearing was made and one would expect that by now the parties were knee-deep in preparation for a case that will involve complex factual and no doubt legal issues.

3. The matter comes before the Court today pursuant to the Owners Corporation's notice of motion filed on 4 July 2018. By that notice of motion, the Owners Corporation seeks leave to rely on a number of expert reports (or pages of expert reports) and a number of affidavits. The affidavits were non-contentious, and leave has been granted. The prayer for relief (Prayer 1) in respect of particular pages of an expert report dated 18 June 2018 was marginally controversial, but it has been dealt with. What remains in issue is, in particular, the Owners Corporation’s application to rely on a report of Dr John Scheirs dated 30 June 2018.

4. One of the defects of which the Owners Corporation complains is that the hot water return pipes in the building are defective, are failing and need to be replaced. Their replacement will involve very substantial expense. The Owners Corporation has already put on evidence dealing with that defect. One of the reports that sought to deal with the defect was a report of a Mr Stewart made in August 2015. That report referred, amongst other things, to possible manufacturing issues and said that the causes of failure required further investigation by a number of experts including "a polymers expert and/or materials scientist".

5. Another report dealing with the same problem came from the developer: a report of Mr Chance made in November 2017. Mr Chance, too, referred to the need for a polymer expert to be retained to establish the degree of material degradation. That warning was echoed in yet another report, filed for the cross-defendant contractor, but since that was only served in June this year, less significance may be placed on that.

6. There is no explanation for the delay in commissioning a polymer expert (for that is what Dr Scheirs is) to investigate and report upon the causes of the failure. It was suggested in the affidavit of the Owners Corporation’s solicitor that the testing and report "would have been unnecessary were the experts for the defendant and cross-defendant to have accepted the unsuitability of the...pipe material". I do not regard that as a proposition that ought be taken seriously. It is akin to saying that litigation would not be necessary if the proposed defendant admitted liability and admitted the quantum of damages caused.

7. The reality is, as was finally conceded, that Dr Scheirs' report is evidence-in-chief. It should have been served many months ago. There is no explanation for the delay in serving it. In my view, those matters weigh heavily against granting leave to the Owners Corporation to rely upon it.

8. Mr Weinberger of Counsel, who appeared for the Owners Corporation, submitted that the question of the defective pipes was of very considerable significance, monetarily and otherwise, in his client's case. I accept that. I can understand that it would be very expensive to remove and replace the whole of the affected piping.

9. Nonetheless, the fact of the matter is that it has always been the case for the Owners Corporation that the whole of that piping was defective. That appears from, amongst other places, the reports to which I have referred. What Dr Scheirs' report would do is provide a scientific basis for the proposition that the failures that have been identified to date are systemic, or endemic, and that indeed the whole of the piping ought be replaced.

10. The difficulty with that argument is that justice is not one way. The Court must consider, among other things, the position of the developer and the cross-defendant contractor. There is some evidence from Mr Haimish McGill, a hydraulics expert, that there are other polymer experts who could test samples of the pipes and report upon the questions in respect of which Dr Scheirs' advice was sought and given. He gives some evidence of how long it would take to get that done. The answers were "three to four weeks" or "at shortest four weeks". The hearing is five weeks away. It seems to me to be unrealistic to expect the developer to commission and brief an expert, receive its reply, and prepare its case on the basis of that reply in the time allowed. At the very best, the developer would have a week or so following receipt of the report to finalise its preparation on this important issue.

11. Further, it has to be remembered that the defects may affect also the case against the cross-defendant contractor. If that is so, that party may wish to obtain its own report.

12. Further, the issue is not limited to Dr Scheirs' report. If evidence is admitted on the basis of his investigations and conclusions, it will effectively cascade through the other expert evidence, including in particular the evidence of the quantity surveyor.

13. I accept that it would be possible to vacate the hearing date and to enable all parties to obtain whatever further evidence they require. I accept, further, that the impact of delay on the developer may not be significant, given that it appears to have opposed the fixing of a hearing date when that was done back in March. But regardless, the parties are now engaged upon the process of preparation for hearing. As I have said, I am required to take into account the interests of justice as they affect all parties, and not just the Owners Corporation.

14. Further, I am required by s 56 of the Civil Procedure Act 2005 (NSW) to take into account the just, quick and cheap resolution of the issues. It may be accepted that the interests of justice alone might favour granting the leave sought and vacating the date. But whether that would be cheap is open to question, and it certainly would not be quick. There is then the question of wasted court time: time that could have been given to other litigants who were ready to have their cases heard. The Court is entitled to take those matters into consideration in considering the exercise of the discretions that have been invoked.

15. If there had been no prior indication of the need for an expert such as Dr Scheirs, the balance might tip one way. But that is not this case. The need was flagged as long as three years ago, and was repeated last year.

16. If there were otherwise some persuasive evidence as to the reasons for the delay in seeking Dr Scheirs' advice, the balance might tip one way. But there has been no such evidence. The evidence, such as it is, seeks to blame the defendants by what I regard as a perverse exercise in logic.

17. In my view, no reason has been shown to permit the plaintiff to rely on Dr Scheirs' report. It follows that the relief directed to that end should not be granted.

18. That leaves two further reports. One is a further report of Mr McGill, to whom I referred earlier. The developer has had that report for a day or so. It accepts that it may be able to deal with part of the report, but has not been able to consider its position in relation to the whole. I am not prepared to grant leave at this point, until such time as the developer has had a proper opportunity to consider the report and its ability to deal with it.

19. Finally, leave is sought in respect of a report of a quantity surveyor that has not yet been served. It has not been served because, obviously enough, the ambit of the evidence to be given by him will depend upon the ambit of the evidence from others that is to be relied upon. What I have said may help in some respects to clarify that position.

20. The best way to deal with the outstanding issues is, it seems to me, to stand over prayers 2(b) and (c) of the notice of motion for some short time, to enable the developer and the contractor cross-defendant to consider their positions. I would expect them to give the Court a realistic appraisal of the ability of their extent to meet the McGill report in the time available. To the extent that the McGill report adopts or builds on Dr Scheirs' report, it is sufficient to say that since Dr Scheirs' report is not to be admitted, those parts of the McGill report will go nowhere.

21. I stand the notice of motion over to for argument on the outstanding issues and for orders to be made 9.15am on Wednesday, 11 July 2018 before me.

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Decision last updated: 12 July 2018