Unique Nominees (Aust) Pty Ltd v Urban Renewal Authority Victoria

[2014] VCC 16

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
BUILDING CASES DIVISION

Case No. CI-13-00258

UNIQUE NOMINEES (AUST) PTY LTD & ORS	Plaintiffs
v.
URBAN RENEWAL AUTHORITY VICTORIA	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	31 January 2014
DATE OF JUDGMENT:	31 January 2014 (revised 3 February 2014)
CASE MAY BE CITED AS:	Unique Nominees (Aust) Pty Ltd & Ors v. Urban Renewal Authority Victoria
MEDIUM NEUTRAL CITATION:	[2014] VCC 16

REASONS FOR JUDGMENT

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Catchwords:             Practice and procedure – Plaintiffs’ application to amend statement of claim – Whether application futile because of proposed Statute of Limitations defence – Presently unclear when damage occurred to plaintiffs, and cause of action accrued – Amendment permitted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D. Clough	Noble Lawyers
For the Defendant	Mr J. Richardson	K + L Gates

HIS HONOUR:

1The plaintiff seeks leave to file a further amended statement of claim. The original statement of claim, based on a cause of action in nuisance, was struck out. The present draft pleading relies upon causes of action in negligence and breach of statutory duty.

2The plaintiffs are a group of factory owners in Mordialloc. The factories are on land upon which the statutory predecessors of the defendant planted trees. The plaintiffs allege that tree roots caused damage to their factories requiring underpinning and other rectification works.

3The defendant has foreshadowed that it would rely upon a statute of limitations defence and submitted that in these circumstances it would be futile to permit the plaintiffs to file a further amended statement of claim.

4The writ was issued on 22 January 2013 and the plaintiffs first foreshadowed their intention to rely upon alternative causes of action on about 20 August 2013. For the purposes of the present application, I have regarded 20 August 2007 as the critical date for determining whether the plaintiffs’ causes of action arose before that date.

5This is an interlocutory application. There are matters of fact which have been alleged by the plaintiff which are presently untested. There are issues between the parties as to the appropriate legal principles which should apply, relating to when damage as an essential element of the causes of action had occurred. The limitations defence is a matter in respect of which the defendant would bear the ultimate onus.

6I consider I should approach the present application on the basis that I am satisfied, having regard to the defendant’s onus, whether the plaintiffs would have a “real” as opposed to a “fanciful” prospect of refuting the limitations defence at trial, or whether for some other reason it is appropriate that the matter be determined at trial rather than on an interlocutory basis. In that event, I shall allow the plaintiffs to amend their claim.

7On 1 November 2013, after I had heard lengthy argument from the parties, I ordered as follows:

“1.       By 4pm on 13 December 2013, the plaintiffs must file and serve a further draft of the proposed amended statement of claim which addresses the following matters:

(a)issues of reliance and vulnerability must be pleaded as part of the breach of statutory duty cause of action rather than simply being referred to in particulars;

(b)particulars must be provided of the loss and damage claimed by each plaintiff including any monetary sums claimed and how they are made up or calculated and the material facts relating to the occurrence of damage to each plaintiff’s property and when that was manifested in each respective property;

2. The plaintiffs must also, at that time, file and serve an affidavit or affidavits attesting to the truth of the matters contained in the draft pleading. If the affidavit is sworn on the basis of information and belief, the affidavit must state the identity of the person who provided the information contained in the draft pleading and the basis for the belief that the information is correct.”

8The plaintiffs have filed an affidavit sworn by their solicitor Coby Lee Carli Ceccomancini on 19 December 2013. The affidavit addresses the issue of the loss and damage claimed by each plaintiff and when that damage occurred. The defendant has criticised the affidavit as failing to address the issue of when damage “occurred”, and concentrating only on the question of when damage “manifested” itself. Further, it was argued that the plaintiffs’ building experts should have been asked specifically to provide evidence by way of opinion from the stated facts as to when those experts would say that damage had occurred.

9At the earlier hearing in November 2013, defendant’s counsel, Mr Richardson, referred to material which established that:

a.one factory owner had made a complaint in relation to structural damage in about 2004 or 2005;

b.other factory owners, among the plaintiffs, had reported cracking had occurred to their factories prior to August 2007;

c.some factory owners among the plaintiffs had suggested in conversations, including with the expert witnesses who had repeated the statements in written reports, that the problems with cracking to the factories had occurred over many years going back well before August 2007.

10      The plaintiffs’ affidavit material shows that:

a.the factory owner who complained of structural damage in 2004 or 2005 is not a plaintiff in the proceeding. Her factory is on land separate to the land on which the other factories are erected and the expert evidence is that her factory was built on fill and was therefore more susceptible to movement;

b.some superficial cracking was observed prior to August 2007. However, any significant cracking that developed into structural damage did not occur until late 2007, or in most cases, after February or later in 2008;

c.the reported statements about the occurrence of cracking to the factories was not inconsistent with the assertions made by the factory owners as set out in sub paragraph (a);

d.the expert evidence, including by reference to the appropriate Australian Standard, was that minor or superficial cracking is of little consequence and is very different to cracking which involves structural damage;

e.the expert evidence was that cracking can develop into structural damage over a very short period of time.

11There was no dispute during the course of argument that the mechanism of cracking to buildings arising from trees planted in the vicinity, includes the following elements:

a.as a tree grows, the root system spreads so that the tree can gain sufficient moisture;

b.if the root system spreads under or adjacent to a building, the roots may take moisture from the soil in the vicinity of the building;

c.the lack of moisture otherwise available to the tree, because of the weather, the season, or conditions of drought may affect this process;

d.the building may either subside or heave as a consequence;

e.this may result in cracking to the building particularly in the floor and walls.

12In these circumstances, the occurrence of damage, and therefore all the necessary elements of the relevant causes of action, would generally not arise until damage to the property became apparent or “manifested itself”.

13Mr Clough, counsel for the plaintiffs, submitted that a cause of action would not arise until there were circumstances similar to those referred to in the principles applicable to latent building defect cases, that is where either damage had manifested itself, or the damage would have become apparent if reasonable investigations had been undertaken.

14The principles which apply in latent defects cases are regarded as an ”exception” to the general rule. I consider, however, that it is reasonably arguable that similar principles would apply in the present case where the time of the actual occurrence of damage cannot be ascertained except by reference to whether damage has manifested itself, or by inferences drawn from the damage that has become apparent, which might demonstrate that damage had occurred at an earlier time.

15In light of the present expert evidence that minor cracking is inconsequential and structural damage in the form of cracking can arise very quickly and the statements by each of the factory owners as to when cracking arose in their factories and the nature and development of that cracking, it is unlikely there will be a significant difference between the manifestation that developed into structural damage and the time when the “damage” actually occurred, in order to found the causes of action.

16These matters of fact and the precise formulation of the appropriate legal principles should in my view be determined at trial rather than on an interlocutory basis. I consider that the plaintiffs’ rebuttal of the limitations defence could not be described as “fanciful”.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 31 January 2014 and revised 3 February 2014.

Dated:       3 February 2014

Philippa Gilkes

Associate to His Honour Judge Anderson