Wadren Pty Ltd v Probuild Constructions (Aust) Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING & CONSTRUCTION LIST

S ECI 2023 00960

WADREN PTY LTD (ACN 005 537 235) in its capacity as Trustee for the HOPPERS CROSSING UNIT TRUST (ABN 83 405 769 465) (and others according to the Schedule)	Plaintiffs
v
PROBUILD CONSTRUCTIONS (AUST) PTY LTD (Subject To A Deed of Company Arrangement) (ACN 095 250 945) (and others according to the Schedule)	Defendants
and
QIC PRIVATE CAPITAL PTY LTD (ACN 076 279 528) AS TRUSTEE FOR THE QIC PROPERTY FUND and another according to the Schedule)	Third Parties

S ECI 2023 05073

QIC WERRIBEE PTY LTD (ACN 624 121 204) as Trustee for the QIC WERRIBEE TRUST (and others according to the Schedule)	Plaintiffs
v
WADREN PTY. LTD. (ACN 005 537 235) as Trustee for the HOPPERS CROSSING UNIT TRUST (and others according to the Schedule)	Defendants

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JUDGE:	Delany J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 and 24 October 2024
DATE OF JUDGMENT:	21 November 2024
CASE MAY BE CITED AS:	Wadren Pty Ltd & Anor v Probuild Constructions (Aust) Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2024] VSC 724

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PRACTICE AND PROCEDURE — Two related multi-party proceedings — Building and construction — Applications for trial of separate questions — Technology, Engineering and Construction List — Active case management — Proposed preliminary trial to determine whether errors and defects in design of concrete structures and whether remedial works reasonable and necessary to rectify — Structural engineering expert evidence critical — Existing orders for early expert conclaves and reports — Applications adjourned until after completion of structural engineering expert evidence and any pleading amendments— Orders requiring the timely joinder of any additional parties — Observations concerning the approach to expert evidence in the TEC List — Murphy v State of Victoria [2024] VSCA 238, Tepko Pty Ltd v Water Board (2001) 206 CLR 1, Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd [2001] VSC 449, Inpex Operations Australia Pty Ltd v AIG Australia Ltd (No 2) [2023] WASC 61, referred to.

PRACTICE AND PROCEDURE — Civil Procedure Act 2010 (Vic) — Imperative for parties and practitioners engaged in complex litigation to comply with overarching obligations — Civil Procedure Act 2010 (Vic) ss 20, 22, 23 and 29, Part 4.9, s 49 and Practice Note SC CC1 paragraph 8 referred to.

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S ECI 2023 00960

APPEARANCES:	Counsel	Solicitors
For the 1st and 2nd Plaintiffs	Jeffery Gleeson KC with Premala Thiagarajan SC and James Grey	Allens
For the 1st Defendant	Jeremy Slattery KC with Alissa Crittenden	Clyde & Co
For the 2nd and 5th Defendants	Greg Harris KC with Tim Maxwell	Wotton + Kearney
For the 4th and 5th Defendants	Suresh Senathirajah KC with Arjunan Thangarajah	Colin Biggers & Paisley
For the 8th Defendant	Perry Herzfeld SC with Julia Watson	Ashurst
For the 9th Defendant	No appearance

S ECI 2023 05073

APPEARANCES:	Counsel	Solicitors
For the 1st – 4th Plaintiffs	Jonathon Moore KC with Jillian Williams	Jones Day
For the 1st – 3rd Defendants	Nick Hopkins KC with Brian Mason	Arnold Bloch Liebler
For the 4th Defendant	Perry Herzfeld SC with Julia Watson	Ashurst
For the 5th and 6th Defendants	Greg Harris KC with Tim Maxwell	Wotton + Kearney
For the 7th and 8th Defendants	Suresh Senathirajah KC with Arjunan Thangarajah	Colin Biggers & Paisley
For the 9th Defendant	Jeremy Slattery KC with Alissa Crittenden	Clyde & Co

TABLE OF CONTENTS

Overview.............................................................................................................................................. 1

Factual background........................................................................................................................... 3

Procedural history.............................................................................................................................. 5

Earlier case management orders...................................................................................................... 9

The delay in structural engineering expert evidence................................................................ 19

Orders for geotechnical expert evidence..................................................................................... 24

The Staging Applications............................................................................................................... 25

Proposed questions..................................................................................................................... 25
Rule 47.04: Principles.................................................................................................................. 28
The Staging Applications: Submissions................................................................................... 34
Co-Owners’ submissions.................................................................................................. 34
QIC Plaintiffs’ and Pacific Defendants’ submissions................................................... 37
KPMG’s submissions........................................................................................................ 38
Probuild’s submissions..................................................................................................... 39
Engineering Defendants’ submissions........................................................................... 42
Reply submissions............................................................................................................. 43

The Staging Applications: Consideration................................................................................ 48

Lay evidence...................................................................................................................................... 58

Orders................................................................................................................................................. 59

Additional parties/Joinder........................................................................................................ 60
Amendments to pleadings......................................................................................................... 60
Further hearing of the Staging Applications........................................................................... 61
Building surveying expert evidence........................................................................................ 63
Further disclosure....................................................................................................................... 66
Objections to documentary evidence relied upon by the experts........................................ 67
Documentsharing....................................................................................................................... 67
Other............................................................................................................................................. 67

HIS HONOUR:

Overview

On 23 and 24 October 2024 I heard two applications by the plaintiffs in related proceedings for the trial of identical preliminary questions (the ‘Staging Applications’). In addition to the Staging Applications the hearing was concerned with:
(a)disputes concerning the issues and questions to be addressed by structural engineering expert conclaves to be conducted pursuant to previous case management orders;
(b)an application for orders for expert geotechnical engineering evidence; and
(c)a dispute about further orders with respect to building surveying expert evidence. That dispute was largely addressed by written submissions provided by the parties after the hearing which I have considered and resolved in the Orders commencing at paragraph 193 of these reasons.
The Staging Applications are made by summonses dated 20 August 2024 by the plaintiffs in proceeding S ECI 2023 00960 (‘Co-Owners’ and ‘Probuild Proceeding’) and the plaintiffs in the related proceeding S ECI 2023 05073 (‘QIC Plaintiffs’ and ‘QIC Proceeding’ (and together with the Probuild Proceeding, the ‘Proceedings’)).
Both applications seek an order for the trial of separate questions pursuant to rule 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the ‘Rules’). In these reasons, I refer to the Co-Owners and the QIC Plaintiffs together as the ‘Applicants’.
The Applicants also seek an order that the trial of preliminary questions be heard concurrently with evidence in one being evidence in the other. I do not understand that aspect of the Staging Applications to be opposed.
Some of the parties across the Proceedings, being the first to third defendants in the QIC Proceeding (‘Pacific Defendants’), the fourth defendant in the QIC Proceeding (‘KPMG’) and the third and fourth defendants in the Probuild Proceeding (‘Building Surveying Defendants’), support the Staging Applications.
The first defendant in the Probuild Proceeding (‘Probuild’), and the second and fifth defendants in the Probuild Proceeding (‘Engineering Defendants’) oppose the Staging Applications.
As part of their opposition to the Staging Applications, Probuild and the Engineering Defendants submit that it would be premature to make an order for the trial of separate questions, including by reason of the stage which has been reached in the Proceedings and the steps which are expected to follow pursuant to existing case management orders.
I agree with the Applicants that the two broad areas proposed as the subject matter for a preliminary trial appear to be suitable for that purpose. The first, whether there are errors and defects in the structural design for the expansion of the Pacific Werribee shopping centre. The second, whether the remedial works that have been undertaken are reasonable and necessary to remedy such defects.
I agree with Probuild and the Engineering Defendants that it is premature to attempt to formulate questions for a preliminary trial at this stage of the Proceedings. An order for the trial of separate questions requires the precise identification of the questions and of the bases upon which those questions are to be answered.
The appropriate time to make any order for the trial of separate questions is after the completion of the structural engineering expert evidence pursuant to existing case management orders and after any pleading amendments made in consequence of that process.
I will adjourn the Staging Applications for further hearing to 26 August 2025 before Stynes J, the judge having the case management of these Proceedings. To facilitate the further hearing of the Staging Applications and the further conduct of the Proceedings I will make case management orders for steps to be taken by the parties in advance of the adjourned hearing.
In relation to the additional matters with which the hearing was concerned, described in sub-paragraphs 1(a) and (b) of these reasons, I made orders on 14 November 2024:
(a)in respect of the process for completion of the structural engineering expert evidence including the issues and questions to be addressed as part of that process;
(b)for a conclave, joint report and individual reports (in the event of any disagreement) by expert geotechnical engineers.
Factual background
The Proceedings are concerned with alleged defects in the structural design of a staged expansion of a regional shopping centre called ‘Pacific Werribee’ located in Werribee, Victoria.
In 2010, the first plaintiff in the Probuild Proceeding (‘Wadren’), a member of the Pacific Group of Companies, engaged Anthony Cesarello and Calibre Consulting (Melb) Pty Ltd (‘Calibre’) (together, the ‘Engineering Defendants’) to prepare a structural design for the staged expansion of Pacific Werribee. The proposed expansion (‘Stage 7 Works’) involved the development of two buildings (‘Stage 7 Buildings’).
Darren Slatter and Gardner Group Pty Ltd (together, the ‘Building Surveying Defendants’) were engaged to provide building surveying services in respect of the proposed Stage 7 Works.
In 2014, Wadren engaged Probuild to design and construct the Stage 7 Works under a design and construct contract.
The Stage 7 Works achieved practical completion between 17 April 2014 and 7 April 2017. At various times during the works, Mr Cesarello issued prescribed certificates certifying that design documents were compliant with applicable standards.
Between approximately May 2014 to March 2017, Calibre issued ‘monthly statements’ to Wadren which Wadren alleges represented to it that the works complied with design documents.
Between August 2014 and May 2017, Mr Slatter issued various building and occupancy permits.
Between March and September 2017, Calibre undertook site inspections and prepared three reports which identified concrete spalling in the southern car park (part of the Stage 7 Buildings) (‘Calibre Reports’).
In October 2017, Wadren initiated a sale campaign for the sale of 50% of its interest in Pacific Werribee. As part of that process one of the QIC Plaintiffs was given access to an electronic data room as a prospective purchaser. The Pacific Defendants, of which Wadren is one, admit that the Calibre Reports were never included in the data room.
The QIC Plaintiffs allege that in November 2017, an entity associated with Wadren within the Pacific Group of Companies engaged KPMG to prepare a report on the condition of Pacific Werribee. The report, uploaded to the data room in December 2017, stated that the structure was in good condition (the highest rating), identified ‘a few minor areas of concrete spalling’ which it said was not endemic and assessed the concrete related repair costs at $20,000.
In December 2017, one of the QIC Plaintiffs submitted an expression of interest to purchase 50% of Pacific Werribee. A heads of agreement was signed on 22 December 2017.
The QIC Plaintiffs allege that:
(a)after signing the heads of agreement, they engaged KPMG to undertake a site survey including to identify potential deficiencies and costs; and
(b)KMPG prepared various reports which described the condition of the Stage 7 Works as ‘good’.
In February 2018, Wadren contracted with the first plaintiff in the QIC Proceeding (‘QICW’) to sell 50% of its interest in Pacific Werribee for $611.5m. Settlement occurred on 31 May 2018. Since that date, Wadren and QICW have been the Co-Owners of Pacific Werribee.
The Stage 7 Buildings as designed are reinforced and pre-stressed concrete structures; comprised of structural blocks comprised of banned beams, slabs, and precast concrete elements, such as façade walls, stair shafts or lift shafts.
The plaintiffs in both Proceedings allege there are significant deficiencies in the structural design which has resulted in the need to undertake rectification works estimated to cost over $200m and scheduled for completion later this year. In addition to the cost of rectification, the Co-Owners allege they have suffered loss of income, in broad terms, from an inability to obtain rent from the Stage 7 Buildings while rectification work is being undertaken.
Procedural history
The Co-Owners commenced the Probuild Proceeding on 14 March 2023 against Probuild, the Engineering Defendants and the Building Surveying Defendants. Pleadings together with contribution and third party proceedings have been completed between existing parties in the Probuild Proceeding. While that is the case, it may reasonably be anticipated that the existing parties may seek to amend their pleadings in consequence of expert evidence to be prepared pursuant to case management orders.
The affidavit by Michael Ilott, solicitor for the Co-Owners, dated 20 August 2024 (‘Ilott Affidavit’) identified 10 categories of disputed issues in the Probuild Proceeding by reference to the Co-Owners’ further amended statement of claim dated 5 July 2024 (‘FASOC’):
(a)Are there defects in the structural design?
(b)Are the rectification works reasonable and necessary?
(c)Are the Co-Owners’ claims against Probuild made out?
(d)Are the Co-Owners’ claims against [the Engineering Defendants] made out?
(e)Are the Co-Owners’ claims against [the Building Surveying Defendants] made out?
(f)Did Wadren suffer loss as a result of the defendants’ wrongdoing?
(g)Did QICW suffer loss as a result of the defendants’ wrongdoing?
(h)What is the cost of the rectification works?
(i)What is the quantum of Wadren’s loss?
(j)What is the quantum of QICW’s loss?
On 30 October 2023, QIC and associated entities (the ‘QIC Plaintiffs’) instituted the QIC Proceeding against the co-owner of Pacific Werribee, Wadren, as well as companies associated with Wadren in the Pacific Group of Companies (together with Wadren, the ‘Pacific Defendants’) and KPMG.
The disputed issues in the QIC Proceeding are:
(a)whether the Pacific Defendants engaged in misleading and deceptive conduct in connection with the sale of a 50% interest in Pacific Werribee to QICW by failing to disclose the presence of defects in the structural design of the Stage 7 Works; and
(b)whether KPMG engaged in misleading and deceptive conduct (or otherwise, negligent misstatement or negligence) by failing to disclose the presence of defects in the structural design of the Stage 7 Works to the QIC Plaintiffs.
There are 11 parties to the Probuild Proceeding and a large number of primary, contribution and third party claims. Those same parties are now all parties to the QIC Proceeding. The only difference between the composition of parties in the two Proceedings is that two companies related to QICW being two of the QIC Plaintiffs are not parties to the Probuild Proceeding.
Existing parties to both Proceedings are bound by the disclosure obligations in s 26 of the Civil Procedure Act 2010 (Vic) (the ‘CPA’). Orders have previously been made concerning s 26 disclosure. There has been some informal discovery, confined to the early expert conclaves process, but otherwise discovery orders have not been made.
While there are already a large number of parties involved in both Proceedings, as became clear upon enquiry in the course of the hearing, there remains the potential for the joinder of additional parties.
The potential joinder of additional parties is an important consideration in determining that it would be premature at this stage to make the orders sought by the Staging Applications. It would be contrary to the overarching purpose of the CPA, namely, to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute, for the trial of separate questions to take place now, only to find that additional parties were later joined to one or both of the Proceedings who were not bound by the determination of those questions.
It is important that any additional parties who are to be joined to either proceeding are joined in advance of any trial of separate questions that might be ordered. It is also desirable and consistent with the overarching purpose and the overarching obligations owed by parties and practitioners, including the overarching obligation in s 25 of the CPA to act promptly and to minimise delay, that the joinder of any additional parties occurs promptly.
That is particularly the case having regard to the early expert conclave processes already underway in relation to the structural engineering and building surveying disciplines, and that will shortly be commenced by geotechnical engineering experts.
There is potential for the joinder of geotechnical engineers who had involvement in the Stage 7 Works. The Engineering Defendants have commenced a separate proceeding by generally indorsed writ against NSP Geotechnics Pty Ltd (as trustee for trustee of NSP Geotechnics Trust) and Peter Noonan (together, the ‘Geotechnical Engineers’). Written reports and advice alleged to have been provided by the Geotechnical Engineers in connection with the Stage 7 Works are referred to by the Engineering Defendants in their defence in the Probuild Proceeding dated 22 May 2024 (‘Engineering Defendants’ Defence’).

There is also potential for the joinder of at least one insurer. The builder, Probuild, is subject to a deed of company arrangement. Wadren has sought pre-action discovery in a separate proceeding against Probuild’s insurer, AIG Australian Limited (‘AIG’). The application for pre-action discovery heard by Barrett AsJ was partially successful.[1] By notice dated 5 September 2023, Wadren instituted an appeal from his Honour’s decisions. The appeal has been heard by Sloss J but has not yet been determined. I was informed by senior counsel for the Co-Owners that while Wadren has a copy of the Probuild policy of insurance, it does not have information which enables it to know how much of the cover has already been used and what remains. It may be the case that Wadren determines to join AIG or other Probuild insurers to one or both of the Proceedings.
[1]Wadren Pty Ltd & Anor v Probuild Constructions (Aust) Pty Ltd & Ors [2023] VSC 348 and Wadren Pty Ltd & Anor v Probuild Constructions (Aust) Pty Ltd & Ors (Supreme Court of Victoria, Barrett AsJ, 17 August 2023).
The Co-Owners submitted that the prospect of joinder of the Geotechnical Engineers or AIG should not disrupt the making of the staging orders sought.
As indicated during the hearing, I will order that with the exception of AIG or any other insurer of Probuild who may later be the subject of a joinder application:
(a)any application by any existing party in either proceeding for joinder of the Geotechnical Engineers or either of them or for the joinder of any other person; or
(b)any third party notice by any existing party in either proceeding against the Geotechnical Engineers or either of them or any other person,
must be filed and served by no later than 28 February 2025.
I will order that any application for joinder of, or any third party notice against, AIG or any other insurer of Probuild, by any existing party in either of the Proceedings, must be filed and served by no later than six months after the delivery of the decision of Sloss J or, should there be an appeal from her Honour’s decision, by no later than six months after the hearing and determination of any such appeal.
The orders I propose to make imposing time limits upon the joinder of parties and third party notices are made in reliance on the case management powers in ss 47 and 48 of the CPA.
Earlier case management orders
Detailed orders have previously been made by Stynes J for a series of early expert conclaves and reports involving structural engineering and building surveying experts. Pursuant to those orders, the expert conclave process is being facilitated by Dr Richard Manly KC, a barrister with considerable experience in building and construction disputes.
On 22 March 2024 orders were made in the Probuild Proceeding (’22 March Order’) as follows:
5. By 4:00pm on Friday, 12 April 2024, each party in the Probuild Proceeding who has not already done so is to confirm in writing:
(a)the name of any expert witness upon whose evidence it proposes to rely in relation to:
(i)structural engineering (including rectification design); and
(ii)building surveying; and
(b)the availability of that witness to participate in a conferral between the parties' nominated experts in the time period set out in order 8 of these Orders.
6. By 4:00pm on Friday, 19 April 2024, the parties who nominated experts under order 5 of these Orders are to confer and attempt to agree on:
(a)the issues they consider should be addressed by the proposed expert evidence in each discipline; and
(b)the documents they consider should be provided to the experts in each discipline in advance of and for the purpose of the First Expert Conclaves ordered in order 8 of these Orders.
7. By 4:00pm on Friday, 26 April 2024, following the conferral under order 6 of these Orders, the plaintiffs are to provide to the experts nominated by the parties:
(a)a copy of these Orders;
(b)a document which sets out the issues the parties agree should be addressed by the expert evidence, and any such issues on which they are not agreed; and
(c)all the documents which the parties agree should be provided to the experts in advance of and for the purpose of the First Expert Conclaves ordered in order 8 of these Orders, and a list of any documents (or categories of documents) on which they are not agreed.
8. By 4:00pm on Tuesday, 14 May 2024, the proposed expert witnesses in each discipline nominated by the parties must confer in the presence of Richard Manly KC and attempt to agree on:
(a)the issues they consider should be addressed by the proposed expert evidence, including whether they agree with those set out in the document referred to in order 7(b) of these Orders as well as identifying any other such issues;
(b)any specific methodology (such as testing, modelling and sampling) to be adopted in determining the issues that are to be addressed by the expert evidence; and
(c)the categories of documents upon which the experts expect to rely when conducting their analysis, including any additional categories of documents to those provided to them by the parties in order 7(c) of these Orders,
(First Expert Conclaves).
9. By 4:00pm on Tuesday, 28 May 2024, the parties' proposed expert witnesses in each discipline nominated by the parties are to prepare a joint report (First Conclave Reports) recording, in relation to the matters the subject of each of the First Expert Conclaves:
(a)the substance of all matters upon which they are agreed; and
(b)the matters on which they are unable to agree, and a succinct statement of the position of each expert in relation to each such matter.
10. The First Expert Conclaves ordered in order 8 of these Orders and the process of preparing the First Conclave Reports are to be conducted in the absence of the parties and their legal representatives. Notwithstanding this, the expert witnesses may jointly request further information, documents or direction by letter signed by them directed to the practitioners for each of the parties and may receive such further information, documents or direction.
11. The First Conclave Reports must be released concurrently to the parties and filed by the plaintiffs in the Probuild Proceeding within two business days of their release.
The structural engineering experts nominated by the parties (‘Structural Engineering Experts’) completed their first joint report on 14 May 2024 (‘Structural Engineering First Conclave Report’). They did so following a conference held on 6 and 7 May 2024 chaired by the facilitator, Dr Manly. Prior to the conference the parties had provided a proposed list of 18 issues to the Structural Engineering Experts for their consideration.
The Structural Engineering First Conclave Report includes a Scott Schedule which reflects that all Structural Engineering Experts agreed on their responses to the 18 issues. As stated in this report, the Structural Engineering Experts:
(a)considered further documents and instructions as well as confirmation as to the validity of assumptions made by them (or otherwise) are required for all 18 issues;
(b)will be assisted in ultimately providing their opinions by receiving a report from an independent geotechnical engineer as to the site sub-soil classification and it will be necessary for complex computer modelling to be conducted by an independent firm of structural engineers; and
(c)understand that in due course they will each be required to prepare their own reports providing their opinions as to the 18 issues and thereafter will be required to take part in a further conclave, the purpose of which will be to produce a joint report for use at the trial.
At a directions hearing of the Proceedings on 28 June 2024, further orders were made in the Probuild Proceeding concerning structural engineering expert conclaves (‘Probuild 28 June Order’) as follows:
Expert conclaves
11. The plaintiffs are to provide a copy of this Order to the Structural Engineering Experts (defined in order 14 below) and Richard Manly KC.
12. To the extent that any party to the QIC Werribee Proceeding nominates an expert in the structural engineering discipline, the parties to the Probuild Proceeding are to include those parties (as applicable) in the conferrals with respect to the matters identified in orders 13, 19 and 23 below.
Structural engineering expert opinion evidence
13. By 4:00pm on Friday, 26 July 2024, the parties are to use best endeavours to agree on:
(a)the issues they consider should be addressed by, and any instructions to be given to, the structural engineering experts for the purpose of the Structural Engineering Second Conclave (defined in order 17 below); and
(b)a draft list of questions to be addressed by the structural engineering experts (including any relevant assumptions and instructions) for the purpose of the Structural Engineering Fourth Conclave (defined in order 25(b) below).
14. By 4:00pm on Friday, 26 July 2024, the parties identified in Annexure A to this Order are to disclose to the other parties the documents identified in Annexure A, being the documents requested by the expert witnesses nominated by the parties in the structural engineering discipline (‘Structural Engineering Experts’) in their first conclave report dated 14 May 2024 (‘Structural Engineering First Conclave Report’).
15. If agreement concerning the matters set out in order 13 above is not reached by 4:00pm on Friday, 26 July 2024, then:
(a)by 4:00pm on Friday 16 August 2024, the parties are to file and serve written submissions in respect of any areas of disagreement;
(b)the Court will advise administratively as to any listing of the Proceedings for the purpose of determining any disagreement between the parties regarding the matters set out in order 13 above; and
(b)orders 16 to 18 below are stayed pending determination by the Court of any disagreement referred to in this order 15.
16. If agreement concerning the matters set out in order 13 above is reached by 4:00pm on Friday, 26 July 2024, then by 4:00pm on Friday, 2 August 2024, the plaintiffs are to provide to the Structural Engineering Experts:
(a)a document which sets out the issues and instructions the parties agree should be addressed by the Structural Engineering Experts for the purpose of the Structural Engineering Second Conclave;
(b)a document which sets out the draft list of questions and instructions to be addressed by the Structural Engineering Experts for the purpose of the Structural Engineering Fourth Conclave (defined in order 25(b) below); and
(c)copies of or access to the documents disclosed by the parties under order 14 of these Orders.
17. By 4:00pm on Friday, 23 August 2024, the Structural Engineering Experts are to confer, in the presence of Richard Manly KC, and having regard to the materials provided to them under order 16, attempt to agree on:
(a)which of the questions identified requires modelling to be undertaken, identifying the type or types of modelling required, including by specific reference to whether the model is for:
(i)equivalent static analysis;
(ii)dynamic analysis; or
(iii)both; or
(iv)some other modelling;
(b)the sample blocks to be used for each required modelling;
(c)the relevant inputs for that required modelling work; and
(d)the expert or experts (amongst them) who are to undertake the required modelling work so identified,
(‘Structural Engineering Second Conclave’).
18. By 4:00pm on Friday, 30 August 2024, the Structural Engineering Experts are to prepare a joint report containing their joint opinions (that is, identifying any issues upon which they agree), including reasoning, as to the matters the subject of the Structural Engineering Second Conclave (‘Structural Engineering Second Conclave Report’). If the expert witnesses are unable to express a joint opinion on any matter, then the expert witnesses must describe the difference(s) between the experts’ opinions and set out a summary of their respective reasons for disagreeing
19. By 4:00pm on Friday, 13 September 2024 the parties are to confer and attempt to agree on a process and timetable for the provision of any geotechnical engineer expert evidence.
20. By 4:00pm on Wednesday, 30 October 2024:
(a)the expert(s) nominated by the Structural Engineering Experts under order 17(d) is to undertake the required modelling work identified in the Structural Engineering First Conclave Report in accordance with the Structural Engineering Second Conclave Report; and
(b)the model prepared in accordance with order 20(a) above (‘Structural Engineering Model’) is to be provided to the other Structural Engineering Experts.
21. By 4:00pm on Friday, 13 December 2024, the Structural Engineering Experts are to confer, in the presence of Richard Manly KC, and attempt to agree on the Structural Engineering Model (‘Structural Engineering Third Conclave’).
22. By 4:00pm on Friday, 20 December 2024, the Structural Engineering Experts are to prepare a joint report containing their joint opinions (that is, identifying any issues upon which they agree), including reasoning, as to the matters the subject of the Structural Engineering Third Conclave (‘Structural Engineering Third Conclave Report’). If the expert witnesses are unable to express a joint opinion on any matter, then the expert witnesses must describe the difference(s) between the experts’ opinions and set out a summary of their respective reasons for disagreeing.
23. By 4:00pm on Friday, 14 February 2025, the parties are to confer and use best endeavours to finalise the list of questions (including any relevant assumptions and instructions) prepared in accordance with order 13 to be addressed by the Structural Engineering Experts in the Structural Engineering Fourth Conclave (defined in order 25(b) below).
24. If agreement concerning the questions to be addressed by, and any instructions to, the Structural Engineering Experts is not reached by 4:00pm on Friday, 14 February 2025, then:
(a)by 4:00pm on Wednesday, 19 February 2025, the parties are to file and serve any written submissions in respect of any areas of disagreement;
(b)the Court will advise administratively as to any listing of the Proceedings for the purpose of determining any disagreement between the parties regarding the questions to be addressed by, and any instructions to, the Structural Engineering Experts; and
(c)the process set out in order 25 below is stayed pending determination by the Court of any disagreement referred to in this order 24.
25. If agreement concerning the questions to be addressed by the Structural Engineering Experts is reached by 4:00pm on Friday, 14 February 2025, then:
(a)by 4:00pm on Wednesday, 19 February 2025, the plaintiffs are to provide to the Structural Engineering Experts a document which sets out the questions to be addressed by, and any additional instructions to, the Structural Engineering Experts;
(b)by 4:00pm on Wednesday, 19 March 2025, the Structural Engineering Experts are to confer, in the presence of Richard Manly KC, on the [questions to be addressed by the Structural Engineering Experts (‘Structural Engineering Fourth Conclave’);
(c)by 4:00pm on Friday, 28 March 2025, the Structural Engineering Experts are to prepare a joint report containing their joint opinions (that is, identifying any issues upon which they agree), including reasoning, as to the matters the subject of the Structural Engineering Fourth Conclave (‘Structural Engineering Fourth Conclave Report’). If the expert witnesses are unable to express a joint opinion on any matter, then the expert witnesses must describe the difference(s) between the experts’ opinions and set out a summary of their respective reasons for disagreeing; and
(d)by 4:00pm on Friday, 16 May 2025, the parties are to file and serve any report of their Structural Engineering Expert(s) providing the expert’s opinion and reasoning on any difference(s) of opinion identified in accordance with order (c) above. Each expert report must contain an annexure that lists all documents referred to or relied upon by the expert.
26. The Structural Engineering Second, Third and Fourth Conclaves ordered in orders 17, 21 and 25(b) above, and the process of preparing the Structural Engineering Second, Third and Fourth Conclave Reports are to be conducted in the absence of the parties and their legal representatives. Notwithstanding this, the expert witnesses may jointly request further information, documents or direction by letter signed by them directed to the practitioner(s) for each of the parties and may receive such further information, documents or direction. While the parties and their lawyers cannot talk to the experts during the course of each of the conclaves, they are free to do so between each of the conclaves (that is, after each report is issued and prior to the commencement of the next conclave).
27. The Structural Engineering Second, Third and Fourth Conclave Reports ordered in orders 18, 22 and 25(c) must be released concurrently to the parties and filed by the plaintiffs within two business days of their release.
At the same directions hearing on 28 June 2024, orders were made in the QIC Proceeding concerning the expert conclaves in the Probuild Proceeding (‘QIC 28 June Order’, and together with the Probuild 28 June Order, ’28 June Orders’) as follows:
Expert conclaves in the Probuild Proceeding
12. By 4:00pm on Friday, 12 July 2024, any party that has not nominated a structural engineering or building surveying expert witness and wishes to do so is to do so.
13. By 4:00pm on Friday, 26 July 2024, the plaintiffs in the Probuild Proceeding are to provide the expert witnesses referred to in order 12 with copies of the reports of the First Conclaves in the Probuild Proceeding relevant to the discipline in which that expert was nominated.
14. By 4:00pm on Friday, 2 August 2024, the expert witnesses referred to in order 12 are to indicate whether they agree with the opinions expressed in the report provided to them under order 13, and, if they disagree on any matter, then those expert witnesses must provide a report to the parties in the Proceedings describing the difference(s) between the experts’ opinions and set out a summary of their respective reasons for disagreeing.
The terms defined by the 22 March Order and the 28 June Orders are adopted in these reasons.
The conclave and joint report process in these Proceedings, of which the Structural Engineering First Conclave Report represents the completion of the first phase, is more complex than is standard in the Technology, Engineering and Construction List of the Supreme Court of Victoria (‘TEC List’) but the processes generally reflect the approach to case management of complex construction disputes in the TEC List.
Some of the submissions made during the hearing appeared to lack an understanding of the standard practice of case management of expert evidence in the TEC List and the rationale that underpins that approach. The approach to expert evidence in the TEC List and its purposes were explained by Stynes J in a speech delivered to the Society of Construction Law Australia on 14 June 2023, available on the Supreme Court website.[2] Given the content of some of the submissions, it is appropriate to refer to some of her Honour’s key observations:
(a)Construction disputes are complex by nature. The subject matter involves technical complexity for which the Court usually requires expert opinion, and the volume of documentary evidence is enormous.
(b)Whilst pleadings — the first stage of civil litigation — are designed to articulate a case and frame the issues in dispute, the real issues are frequently not capable of distillation in construction disputes until expert opinion is produced. Accordingly, it is commonplace in these disputes for pleadings to be amended once expert evidence is produced and technical issues in dispute are clarified, reflecting the significance of expert opinion for identifying (and in many cases, narrowing) the real issues in dispute.
(c)Absent appropriate case management of the expert evidence process, the Court is often faced with multiple and differing opinions (sometimes as many distinct opinions as there are parties), which are formed on the basis of different methodologies, materials and questions. The experts are engaged at considerable expense to the parties and the Court may be left without any useful guidance.
[2]Justice Kathryn Stynes, ‘Determining the real issues in dispute: Efficient and effective case management in the TEC List’ (Speech, Society Of Construction Law Australia, 14 June 2023).

Having regard to these observations, and the overarching purpose of the CPA, as the judge in charge of the TEC List, Stynes J has implemented a standard process for case management of expert evidence in cases where it is identified at the outset that expert evidence will be critical for resolving or determining the dispute. That process involves moving straight from pleadings into an early expert conclave process by which:
(a)the parties identify the discipline(s) of expert evidence they seek to adduce, and the experts upon whose opinion they intend to rely;
(b)the parties confer for the purpose of agreeing a list of issues and critical documents to be provided to the experts for each discipline;
(c)the experts meet in the presence of a facilitator nominated by the parties (or determined by the Court in default of agreement), and in the absence of legal practitioners and the parties, to identify the relevant issues for expert opinion, what methodology to adopt to address those issues, and the categories of documents they require;
(d)the experts then prepare a first joint report outlining those matters;
(e)the parties then provide the experts with the documents requested and a list of issues for them to address;
(f)the experts meet again for a second conclave in the same format as the first and prepare a second joint report setting out areas of agreement and disagreement; and
(g)in the event of any disagreement, the experts then prepare individual reports each containing their opinion limited to the area(s) of disagreement.
The early expert conclaves process results in the experts identifying the real issues in dispute and producing useful and comparable opinions for the assistance of the Court based on a consideration of the same issues by reference to the same materials.
I would add to her Honour’s standard regime for expert evidence, orders pursuant to Part 4.6 and s 49 of the CPA that without leave of the trial judge, there shall be no cross-examination of the experts at trial upon any agreed matter referred to in any of the joint reports. Such orders have not previously been made in these Proceedings. As I am not the judge responsible for the case management of the Proceedings, with the exception of the joint reports in the geotechnical engineering discipline, I will leave any decision about whether such orders are appropriate in respect of the other expert discipline to Stynes J.
In addition to her Honour’s standard expert conclave orders, the 28 June Orders provided for two additional conclaves, the Structural Engineering Second Conclave and the Structural Engineering Third Conclave. Those conclaves were ordered following receipt of the Structural Engineering First Conclave Report. As mentioned above, the Structural Engineering Experts agreed in that report that modelling was required to be undertaken. The parties agreed to provide for further conclaves for the experts to opine on the type(s) of modelling which should be undertaken and how the modelling should be carried out. The Structural Engineering Third Conclave is in place for the Structural Engineering Experts to agree on the model(s) developed in response to the Structural Engineering Second Conclave.
The delay in structural engineering expert evidence
Three areas of expert evidence (structural engineering, building surveying and geotechnical engineering) are relevant to the disputes in these Proceedings. Of the three disciplines, structural engineering evidence is by far the most critical. It is the structural engineering evidence that will underpin any trial of the two subject areas proposed to be dealt with in a preliminary trial pursuant to the Staging Applications.
Because the parties were not able to reach agreement upon the matters to be addressed by the Structural Engineering Experts during the Structural Engineering Second Conclave there has been slippage in the timetable fixed by the 28 June Orders.
In accordance with paragraph 17 of the Probuild 28 June Order, and as discussed in paragraph 56 of these reasons, the Structural Engineering Second Conclave is designed for the experts to determine what modelling work will be required for the purpose of addressing the questions anticipated to be put to the experts as part of the Structural Engineering Fourth Conclave.
The 28 June Orders required the parties to use their best endeavours to agree a list of issues and a draft list of questions prior to 26 July 2024 so that the experts could take the necessary step of building the model(s) in advance of the Structural Engineering Fourth Conclave.
As a result of the parties’ disagreement on the issues and draft questions, orders for the remaining steps in the structural engineering expert process were stayed pending the Court’s determination of the disagreement. Due to the delay occasioned by the inability of the parties to agree on the issues in advance of the hearing, and the delay occasioned by the hearing itself, it is now anticipated that the structural engineering expert evidence will be completed by 9 July 2025 (with the filing of individual reports) in lieu of 16 May 2025 as specified in the 28 June Orders.
As I stressed during the hearing, it is imperative when parties are required by orders to use best endeavours to agree, or are otherwise called upon by the Court to confer in order to seek to reach agreement, that counsel, solicitors, clients, and insurers, each of whom are bound by the overarching obligations in the CPA, comply with those obligations. In particular, the obligations to cooperate (s 20), to use reasonable endeavours to resolve disputes (s 22) and to use reasonable endeavours to either resolve issues by agreement or to narrow the scope of the remaining issues in dispute (s 23).
At the hearing, only three groups of parties wished to be heard in relation to the identification of issues and the draft list of questions for the Structural Engineering Second and Fourth Conclaves. Those parties were the Co-Owners, Probuild and the Engineering Defendants (‘the Expert Issues Parties’). While the Co-Owners and Probuild actively engaged in the process of seeking to reach agreement as provided for in the 28 June Orders, the Engineering Defendants did not. The Engineering Defendants did not become actively involved in these issues until after the Co-Owners and Probuild had cooperatively and meaningfully exchanged ideas and positions in an endeavour to reach agreement consistent with their CPA obligations.
When the Engineering Defendants did engage, it was late. They sought and were granted an extension of time to make submissions. When those submissions were received, they revealed that the Engineering Defendants sought a very different approach to the draft questions for the Structural Engineering Fourth Conclave than that adopted by the Co-Owners and Probuild. The different approach is apparent from the comparative table of draft questions included in the Co-Owners’ reply submissions filed on 18 October 2024.
While the parties who had engaged in meaningful consultation had not agreed — as appears from the comparative table; the Co-Owners’ draft questions are broadly framed, Probuild’s equivalent questions are more detailed – both sets of questions correspond sequentially and by subject matter and are easily compared. The Engineering Defendants’ draft questions on the other hand do not line up with either the Co-Owners’ or Probuild’s draft questions.
Had the Engineering Defendants engaged meaningfully in the conferral process as required by the 28 June Orders in a manner consistent with their obligations pursuant to the CPA, I doubt the level of disconnect between the parties apparent from the comparative table would have existed by the time the matter came for hearing.
In complex litigation involving multiple parties it is critical that parties, practitioners, insurers and funders are cognisant of the need to cooperate in the conduct of the proceeding and to comply with case management orders in a timely manner and in a manner that is consistent with their obligations pursuant to the CPA. The potential consequences for parties, practitioners and others bound by the overarching obligations of the failure to comply with those obligations are real and substantive. In the event of non-compliance, s 29 of the CPA confers broad powers on the Court to make such orders as it considers appropriate in the interests of justice, including an order pursuant to s 29(1)(e) that the person who has not complied not be permitted to take specified steps in a civil proceeding, and orders in relation to costs and expenses arising from a contravention (s 29(1)(a)). The Court has power to make such orders on its own motion.
On the second day of the hearing, following some preliminary observations by me concerning the obligations owed pursuant to the CPA and concerning the draft list of questions for the Structural Engineering Second Conclave, the hearing was stood down to enable the legal representatives for the Expert Issues Parties to confer and to see whether they could reach agreement upon the draft list of questions and other matters relating to the Structural Engineering Second and Fourth Conclaves.
At the conclusion of the hearing later that day, the Expert Issues Parties indicated they were close to reaching resolution of those issues. The parties agreed to confer the following week and a timetable for submissions was specified in the event the parties were unable to agree on outstanding issues.
On 30 October 2024, the Co-Owners’ solicitors provided my Chambers with a draft form of order which, they advised, reflected agreement (with one exception) of the Expert Issues Parties on:
(a)extensions to the timetable for the outstanding steps in the structural engineering expert evidence;
(b)a timetable for an expert conclave, joint report and any necessary individual reports in the geotechnical engineering discipline;
(c)the issues and instructions to be put to the experts for the purpose of the Structural Engineering Second Conclave; and
(d)the draft list of questions and instructions from which the experts are to determine at the Structural Engineering Second Conclave whether and what modelling is required to be undertaken ahead of the Structural Engineering Fourth Conclave.
The only disagreement concerned one additional instruction of the kind described in sub-paragraph 70(d) above which was sought by the Co-Owners and opposed by the Engineering Defendants (‘Additional Instruction’). At my request, the parties provided written submissions for my consideration.
On 1 November 2024, I determined the disagreement on the papers, finding that the Additional Instruction should be included in the orders. I also suggested to the parties that a second additional instruction might be required to respond to a request for clarification made by the Structural Engineering Experts in the Structural Engineering First Conclave Report, which the Co-Owners and Engineering Defendants raised in their written submissions but I considered was not addressed by the Additional Instruction (‘Second Additional Instruction’).
On 11 November 2024, the Co-Owners informed Chambers that the Expert Issues Parties had agreed a form of Second Additional Instruction but the Engineering Defendants also sought a third additional instruction on an entirely different matter, raised to my attention for the first time which was opposed by the Co-Owners and Probuild (‘Third Additional Instruction’).
On 14 November 2024, I made orders substantially in the form agreed by the Expert Issues Parties and provided to Chambers on 30 October 2024, with inclusion of the Additional Instruction and the Second Additional Instruction agreed by the Expert Issues Parties (‘14 November Orders’). I determined on the papers not to include the Third Additional Instruction.
The 14 November Orders were made following consultation and negotiation between the Expert Issues Parties and the legal practitioners acting on their behalf. There were a number of extensions agreed as to the time for conferral and various communications were exchanged between those legal practitioners and Chambers. The process of consultation and negotiation should have occurred prior to the hearing, including with the Engineering Defendants as active good faith participants.
In circumstances where the parties have now cooperated and as a result, agreement has largely been achieved, it is not appropriate to make any order pursuant to s 29 of the CPA on the Court’s own motion, or otherwise concerning the earlier non-engagement of the Engineering Defendants. However the legal practitioners, the parties and those who stand behind them stand on notice that if in the future there should be a failure to comply with CPA obligations in relation to conferral or similar orders, costs orders and orders preventing any non-compliant party from taking a specified step in the Proceedings may follow.
It goes without saying that orders for the case management of complex proceedings are not guidelines. If orders are not complied with, and if the overarching obligations for which the CPA provides are not adhered to, serious consequences may flow, including consequences of the type expressly referred to in s 29 of the CPA.
Orders for geotechnical expert evidence
In the Structural Engineering First Conclave Report, the experts commented that to provide their opinion about whether an experienced structural engineer, engaged in the Stage 7 Works, and exercising reasonable care and skill, would have concluded that the site sub-soil class of the stage 7 site most closely resembled ‘Class C_e — Shallow Soil’, not ‘Class B_e — Rock’, the Structural Engineering Experts would prefer to rely on the opinion of an independent geotechnical engineer concerning the site classification.
Pursuant to a summons filed by the Co-Owners on 5 October 2024 in the Probuild Proceeding I determined to make orders for an expert conclave and joint report of the parties’ nominated geotechnical engineering experts (‘Geotechnical Engineering Experts’). I made orders for such evidence in both Proceedings on 14 November 2024. While it is unnecessary to set out the terms of those orders, they provide for a more simplified process than the standard TEC List orders previously discussed. The intent of the orders is that the independent Geotechnical Engineering Experts are to express their opinion concerning sub-soil classification based on three scenarios:
(a)The first scenario is based on the information available to the Engineering Defendants and referred to in their defence in the Probuild Proceeding.
(b)The second scenario is to consider in addition to (a), other geotechnical information now available, without additional bore holes being drilled.
(c)The third scenario is, if the Geotechnical Engineering Experts consider the existing information is insufficient to identify the classification, to recommend further bore logs or tests, following which the parties can determine whether they consider such further drilling or tests should be undertaken. If at that point there is disagreement, the matter can be referred back to Court for determination.
The Geotechnical Engineering Experts are to prepare a joint report setting out areas of agreement and disagreement in relation to the three scenarios. As indicated in paragraph 55 of these reasons, one of the orders provides that there shall be no cross-examination at trial concerning matters agreed upon in the joint report of the Geotechnical Engineering Experts without leave of the trial judge.
The Staging Applications
Proposed questions
The Staging Applications were put at two different levels. At the first level the Applicants contended for orders in accordance with each summons, namely, an order that the following questions be heard and determined separately pursuant to rule 47.04 of the Rules:
(a)Are there errors and defects in the structural design of the Stage 7 Buildings as pleaded in prescribed sections of the respective Applicants’ pleadings (‘Issue 1’).
(b)Are the (adopting terms as defined in the FASOC):
(i)Temporary Measures;
(ii)Periodic Inspections;
(iii)Permanent Rectification Works;
(iv)Confinement Tie Rectification;
(v)additional bracing works pleaded in paragraph 254 of the statement of claim (as amended); and
(vi)the increased extent of maintenance works pleaded in paragraph 256(a) of the statement of claim (as amended),
reasonable and necessary to rectify any defects identified in answer to Issue 1, as pleaded in prescribed sections of the respective Applicants’ pleadings,
(the ‘First Level Questions’ or, as the Applicants refer to them, ‘the Stage 1 Issues’).
In terms, the First Level Questions substantially correspond to the first two categories of disputed issues articulated in the Ilott Affidavit and reproduced in paragraph 29 of these reasons.
At the second level, the Applicants contended for an order fixing a series of 19 “precise questions” annexed to the Ilott Affidavit (the ‘Second Level Questions’) which they submitted “may” be appropriate for determination at a preliminary trial pursuant to rule 47.04 of the Rules. “May” because the Second Level Questions are identical to the questions the Co-Owners proposed be put to the Structural Engineering Experts in the draft list of questions for the Structural Engineering Second Conclave, which may change further as a result of further steps in the conclave process.
Mr Ilott has given evidence that the Second Level Questions are anticipated to change in order to conform with the list of questions to ultimately be put to the experts for the purpose of the Structural Engineering Fourth Conclave.
Notably, the conferral process between the parties which took place between the hearing and 12 November 2024 in relation to the draft list of questions to be provided the Structural Engineering Experts has already resulted in the draft list of questions changing substantially from the form of the Second Level Questions, as reflected in the 14 November Orders.
But by way of further illustration, proposed questions 1-4 and 15 of the Second Level Questions are in the following terms:
Applicable standard for non-conformance assessment
1. What is the applicable standard for the non-conformance assessment, namely.
(a)is Probuild required to comply with:
(i)Building Code of Australia (BCA) 2013, so that AS1170.4 (2007) and AS3600 (2009) apply; or
(ii)BCA 2009, so that AS1170.4 (2007) and AS3600 (2001) apply; and
(b)is Calibre required to comply with:
(i)BCA 2013, so that AS1170.4 (2007) and AS3600 (2009) apply; or
(ii)BCA 2009, so that AS1170.4(2007) and AS3600 (2001) apply?
(Paragraphs 102, 109 and 126 of the FASOC)
Stage 7 Buildings
2. What is the composition of the Stage 7 Buildings, as designed?
(Paragraphs 13, 46-49 and 66 of the FASOC)
Applicable seismic design parameters and methodology
3. What are the applicable parameters for the seismic design for the Stage 7 Works, including:
(a)what “Importance Level” was applicable to the Stage 7 Buildings (and what is the resulting probability factor (Kp));
(b)what was the hazard factor (Z) for the site of the Stage 7 Works; and
(c)did the Stage 7 Site most closely resemble the site sub-soil class of Ce or Be?
4. What methodology for seismic design would an experienced structural engineer engaged for the Stage 7 Works exercising reasonable care and skill (reasonable structural engineer) have undertaken when preparing the design for the Stage 7 Works? (Paragraphs 50-54, 55-63, 65-69, 106, 129-140 and 145 of the FASOC)
[…]
Construction defects
15. To the extent any defects in the Stage 7 Buildings are identified, were those defects caused, wholly or in part, by a failure to construct the Stage 7 Buildings in accordance with the design documents?
(Paragraph 248(d) of Calibre and Cesarello's defence)

As recognised by the parties in the course of the hearing, if the Structural Engineering Experts were to agree upon the answers to the questions put to them in the Structural Engineering Fourth Conclave, such as questions 1–4 and 15, there would be no need for the Court to address those questions in a first trial, or at all.
Following oral submissions and upon review of the materials filed by the parties in advance of the hearing, it is unclear precisely which of the First Level Questions and the Second Level Questions the Applicants seek by way of relief in the Staging Applications. In these reasons, where I refer to a trial of separate questions, I mean either of these levels. The parties referred to the application for an order for the trial of separate questions as a staging application, and described such an order as one ‘staging’ the Proceedings. I adopt that language in these reasons.
Rule 47.04: Principles
Rule 47.04 of the Rules provides:
The Court may order that—
(a)any question in a proceeding be tried before, at or after the trial of the proceeding, and may state the question or give directions as to the manner in which it shall be stated;
(b)different questions be tried at different times or places or by different modes of trial.
‘Question’ is defined as:
any question, issue or matter for determination by the Court, whether of fact or law or of fact and law, raised by the pleadings or otherwise at any stage of a proceeding by the Court, by any party or by any person not a party who has a sufficient interest[.][3]
[3]Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 1.13.
The principles to be applied on application pursuant to rule 47.04 were outlined by the Court of Appeal in Murphy v State of Victoria (citations omitted):
1)A separate trial should be ordered under r 47.04 only with great caution and only in a clear case.
2)The attraction of trials of issues rather than of cases in their totality, ‘are often more chimerical than real’, so that separate trials should ‘only be embarked upon when their utility, economy and fairness to the parties are beyond question’.
3)The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding.
4)There should be no trial of a separate question on the basis of assumed facts unless the facts are agreed or can readily be determined judicially. Otherwise, the parties remain free to dispute the relevant facts at any later trial.
5)As a general rule, it is inappropriate to order that a preliminary issue be isolated for determination unless the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.
6)Factors which tell against making [an] order under r 47.04 include that the separate determination of the question:
a)may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;
b)may result in significant overlap between the evidence adduced on the hearing of the separate question and at trial; possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding; and
c)may prolong rather than shorten the litigation.[4]
[4][2024] VSCA 238 [28]; (2014) 45 VR 119, 126 (Nettle AP, Santamaria and Beach JJA) (‘Murphy’).
By reason of s 8(1)(a) of the CPA, the discretion to make an order pursuant to r 47.04 is to be exercised with a view to giving effect to the overarching purpose in s 7(1) of the CPA.
Similar caution to that expressed by the Court of Appeal in Murphy about making orders for the trial of separate questions was earlier expressed by Kirby and Callinan JJ (Gaudron J agreeing) in Tepko Pty Ltd v Water Board:
Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.
… A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court’s, rather than the parties’, interests.
… [T]here is an additional potential for further appeals to which the course of the trial on separate issues may give rise.[5]
[5][2001] HCA 19 [168]-[170]; (2001) 206 CLR 1, 55 (‘Tepko’).
In Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd, in a passage to which Probuild referred, Byrne J picked up on those cautionary sentiments (citations omitted):
There is a further difficulty recently adverted to by Kirby and Callinan JJ in Tepko Pty Ltd v Water Board that the procedure has the indirect disadvantage of prolonging the litigation where the determination of the preliminary issue is subject to appeal, so that the remainder of the trial must await the conclusion of a lengthy appeal process. This, together with other considerations, caused their Honours to observe that ”the attraction of trials of issues rather than of cases in their totality, are often more chimerical than real” and to counsel the profession that the trial of issues should ”only be embarked upon when their utility, economy, and fairness to the parties are beyond question.”[6]
[6][2001] VSC 449 [25] (‘Hyder Consulting’).
Byrne J continued:
From the perspective of a trial judge, it must be acknowledged, too, that the full implications of severance cannot be appreciated without a detailed familiarity with the evidence which might be led on the question or part of proceeding to be tried first and on those which are to await the subsequent trial. The trial judge, even a judge who has had dealings with the case as the judge managing the litigation, will not normally have such a familiarity.[7]
[7]Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd [2001] VSC 449 [25].
In opposition to the making of an order pursuant to r 47.04, Probuild and the Engineering Defendants relied on the following further observations by Byrne J in Hyder Consulting:
In a conventional trial of all issues, each of the parties has the opportunity of bolstering its case from the evidence of any witness called by any party, including those who may be called on issues which, in chief, do not bear upon that case. A party may in this way be unfairly disadvantaged if it is denied the opportunity to elicit this evidence. Furthermore, the credit of a witness called on one issue may be affected by the evidence of that witness or of other witnesses on other issues. The advantage, in terms of saving court time and expense, of trying certain questions or parts of a case before others may be eroded, if not destroyed, where a party at the first trial cross-examines a witness on the deferred questions on the basis that this ordinarily goes to the credit of that witness. Where this course is adopted, the cross-examiner is bound by the rule that answers given cannot be contradicted. The position is otherwise if the cross-examination can be justified as going to an issue. These considerations lead to the conclusion that the advantages of the severance of questions for trial before other questions or the division of a trial into parts, as a technique of efficient trial management, may lead to unfair advantage or disadvantage to a party or may prove to be illusory.[8]
[8]Hyder Consulting (Vic) Pty Ltd v CGU Insurance Ltd [2001] VSC 449 [25].
Probuild pointed to the large number of parties involved in the Proceedings and the large number of contribution and third party notices. It referred to the following statement by Bongiorno J in Australian Communications Corp Pty Ltd v Coles Myer Ltd concerning the potential adverse impact of a split trial order on the potential for settlement of multi-party disputes:
… the fact that modern litigation is generally referred for alternative dispute resolution at some point prior to trial, either by an order of the court or by the cooperation of the parties or both, is a further consideration to be taken into account in deciding whether to separate issues. To separate one issue from another necessarily means that alternative dispute resolution is somewhat less effective; the parties having concentrated their efforts, perhaps, on one issue to the neglect in the first instance of the others.[9]
(emphasis added in submissions)
[9][2002] VSC 443 [13].
More recently in Inpex Operations Australia Pty Ltd v AIG Australia Ltd (No 2), a case having some similarities with the present in terms of the nature of the subject matter and the degree of complexity, Lundberg J said (citations omitted):
The usual position, which all parties to these proceedings accepted, is that all issues of fact and law in dispute in an action should be tried together. The common experience of courts in Australia demonstrates there are compelling reasons for this approach. That said, recognising that there may be circumstances in which this is not in the interests of justice, most modern courts have the power to order that a trial be split and certain questions or issues be heard and tried separately.
[…]
The exercise of the discretion which is embedded in [the Rules] requires a proper foundation. There must be probative evidence before the court which justifies a departure from the usual position. That evidence should be more than conclusionary and not expressed at too high a level of generality.
[…]
The orthodox position is that all issues of fact and law in dispute in an action should be tried together. There are compelling reasons for this orthodox approach. The plaintiff, through the current applications, invite this court to exercise the discretion in [the Rules] to order that separate trials on the Substantive Issues and the Quantification Issues be undertaken.
In my view, the plaintiff has not discharged the burden of persuading the court that it should exercise the discretion to order separate trials.
I have firmly in mind the words of warning from the High Court in Tepko that applications of the present nature must be approached in a careful and considered manner, and I should be watchful of pursuing a deceptively attractive short-cut that ultimately serves to complicate and lengthen proceedings. The apparent benefits of a separate trial of issues can prove to be illusory. It is a course that can cause the very delay, expense and uncertainty it was intended to avoid.
The present litigation involves a series of complex claims for indemnity under detailed policies of insurance, concerning an immense liquified natural gas facility. The enormity of the claims and the litigation process which the plaintiff has initiated is, naturally enough, no preclusion to an application for a split trial. Indeed, large and complex cases are ones where procedural applications such as the present may well produce significant advantages in terms of efficiency and case management. It must be undertaken, however, only where the utility, economy, and fairness to the parties of such an approach are beyond question, and where to do so can be said to be in the interests of justice in a broader sense. In my view, it cannot be said, at least at present, that such advantages are beyond question or that it would be in the interests of justice to split the litigation.[10]
[10][2023] WASC 61 [57], [70], [72], [83], [92] and [152]-[155].
The Engineering Defendants submit, relying on MacLaren v Australia and New Zealand Banking Group Ltd, that it would be inappropriate to order a split trial where significant issues of credit will arise in both trials. [11]
[11][2022] VSC 662 [29] (Elliott J).
The discretion to make an order pursuant to r 47.04 is unfettered, but by reason of s 8(1)(c) of the CPA must be exercised in a manner that seeks to give effect to the overarching purpose provided for in s 7(1) of the CPA. It follows that the overriding consideration is whether the making of an order for the trial of separate questions will facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
In Inpex Lundberg J said of the equivalent rule in Western Australia:
The exercise of the foregoing powers must be approached in a cautious manner. The words of warning of Kirby and Callinan JJ in Tepko continue to provide a strong reminder to trial judges in this country to approach applications of the present nature in a careful and considered manner, and be watchful of pursuing a deceptively attractive short-cut that ultimately serves to complicate and lengthen proceedings…
[…]
The determination of an application for separate trials requires a careful balancing of the prospective advantages and disadvantages, bearing in mind the uncertainties of litigation. Ultimately, the decision to be made is a discretionary one and the discretion is to be exercised having regard to, and weighing, all the relevant considerations. In the English context, this process is sometimes described as a ‘pragmatic balancing exercise’.[12]
(Applicants’ emphases added and citations omitted)
[12]Inpex Operations Australia Pty Ltd v AIG Australia Ltd (No 2) [2023] WASC 61 [59] and [63].
In Electrical Waste Recycling Group Ltd v Philips Electronics UK Ltd, Hildyard J described the task to be undertaken when considering whether to exercise the discretion as follows:
All these sorts of factors seem to me to be potentially relevant and need to be taken into account in what is essentially a pragmatic balancing exercise in assessing how the case is likely to unfold according to whether there is or is not a split.
It follows that each case falls to be assessed by reference to its own facts, features and peculiarities. Further, the assessment has to be made before the Court can responsibly take any reliable view as to the prospects of success, and thus as to whether quantum will be a live issue or not.[13]
[13][2012] EWHC 38 (Ch) [7]-[8].
The authorities referred to including Murphy establish that the Applicants must persuade the Court that the benefits of a preliminary trial are ‘beyond question’ before an order will be made pursuant to r 47.04 the Rules.
If an order is to be made for the trial of separate questions pursuant to r 47.04, the authorities are clear that precision in the formulation of the question or questions is essential. In Jacobson v Ross, Brooking J (with whom Phillips J agreed) said:
It is much preferable to deal first with whether a preliminary question should be determined and in the course of doing so to deal with the terms of the suggested question, so as to ensure that it is an appropriate question and drafted with sufficient particularity; at the same time, the judge should ensure that any facts to which regard may be had in answering the question can be precisely identified.
[…]
Precision is essential in the statement of any question ordered to be tried under Rule 47.04.
[…]
Words used in a question formulated in an order as a preliminary issue should, so far as possible, be clear and beyond doubt. One should be able to ascertain their meaning by reference to the order itself, including any other documents which may be regarded as incorporated by reference into the order.[14]
[14][1995] 1 VR 337, 339-340.
The Staging Applications: Submissions
The parties advanced detailed submissions for and against the Staging Applications and in relation to whether orders should be made in terms of the First Level Questions or Second Level Questions. The parties also advanced argument concerning the proposition that the further hearing of the Staging Applications should be adjourned until after the completion of the Structural Engineering Fourth Conclave.
Co-Owners’ submissions
The Co-Owners submit:
(a)the Stage 1 Issues are framed by reference to specific parts of the pleading. There is a clear demarcation between the proposed two stages, with ‘limited’ factual overlap. The fact that there are likely to be pleading amendments does not inhibit the making an order under r 47.04, in circumstances where the range of potential amendments is already within the contemplation of the parties;
(b)while it is possible expert and lay witnesses will be called to give evidence in both trials, the evidence given in the proposed preliminary trial would be confined;
(c)Stynes J has already staged the proceedings by ordering early expert conclaves for the purpose of identifying the nature and extent of the alleged defects. An order under r 47.04 gives effect to that intention;
(d)allowing a preliminary trial would likely facilitate a resolution of the central matters in the Probuild Proceeding a full year early. A trial of the Stage 1 Issues in the second half of 2025 over a 3–4 week period, the reduced trial time anticipated following discussion during the hearing, is to be compared with a trial of the full proceeding which is unlikely to occur before the second half of 2026. The 3–4 weeks estimate is provided on the basis that the structural engineering expert conclave process can reasonably be expected to narrow the issues the subject of a preliminary trial.
(e)if (contrary to the Co-Owners’ position in the litigation) the Stage 1 Issues are resolved in the defendants’ favour, the Probuild Proceeding would ‘likely’ end. In that scenario, a subsequent trial would be avoided, saving significant time and costs;
(f)if the Stage 1 Issues are resolved in the Co-Owners’ favour, the parties will be in a better position to settle with knowledge of the defective works requiring rectification, the extent of rectification required, and a better understanding of the costs of rectification. In that circumstance the parties would be in position to work out the reasonable range of the quantum following the identification of the defects and of the reasonable and necessary rectification works. Even if the Proceedings do not settle, the scope of evidence will be reduced;
(g)in any case, staging is unlikely to prolong the Proceedings. The delay to the structural engineering expert conclave process, resulting from disagreement on the issues and draft list of questions for the Structural Engineering Second Conclave provides an example of how proceedings of this size and complexity, with many parties and some with conflicting interests, are vulnerable to delays across all aspects of the proceedings. During oral submissions, senior counsel for the Co-Owners, Mr Gleeson KC submitted that the estimated duration for a full trial of these Proceedings (3–5 months), as provided by the Applicants’ solicitors on affidavit, are unduly optimistic; and
(h)an order under r 47.04 would provide certainty as to the subject matter of the preliminary trial. That would assuage concerns that absent such an order, issues may arise which create an insurmountable conflict, preventing Allens and counsel from acting for the Co-Owners. In circumstances where the Co-Owners are jointly represented in the Probuild Proceeding by one firm of solicitors and counsel, and separately represented by two further sets of solicitors and counsel in the QIC Proceeding due to their opposing interests in that proceeding, Mr Gleeson submitted on behalf of the Co-Owners that the interests of the Co-Owners, the QIC Plaintiffs and the Pacific Defendants will inevitably fall into conflict where forensic decisions have to be made on matters such as the interpretation of documentary evidence, what witnesses say or should say, and how witnesses ought be questioned. That conflict would result in changing representation if the Staging Applications fail which may occasion a delay of between 4–6 months for new representation to get across the detail. Mr Gleeson on behalf of the Co-Owners summarised the nature of the conflict as resulting from:
A live issue about how much or how little was QIC – one of my clients – told or allowed to be told by Wadren, another of my clients, about problems or potential problems with the shopping centre that they were thinking of buying into.
[…]
… there will be necessarily questions in both proceedings about – take for example somebody addressing lay or expert witness, addressing the Calibre [R]eports. … Wadren’s interests will be served by saying whatever was communicated in there did not put us on notice about any major problem, for example, if we got it. And QIC's interests will be served better by saying the problems identified in the Calibre [R]eports are of sufficient moment that anyone would have realised they are difficult.
Now that will infect questions such as what evidence should be put on around that issue, lay or expert; what Redfern categories might be better suited to each party's strategic interests. And imagine during the trial itself. It is not clear to me how being separately represented will solve the problem of determining how that person is cross-examined with the flatly inconsistent objectives of the two plaintiffs.[15]
[15]Transcript of Proceedings (24 October 2024) 149.17-150.20.

Since the decisions in Murphy and Tepko courts have placed greater emphasis in commercial litigation, including in complex multi-party proceedings such as these, upon active case management. The approach adopted in the TEC list generally and the specific case management orders made in these Proceedings concerning expert evidence are prime examples of active management. To make orders at an appropriate time for the separate trial of whether there are errors and defects in the structural design and if so, whether the remedial works undertaken are reasonable and necessary to remedy those defects, leaving issues 3–10 identified in the Ilott Affidavit (reproduced in paragraph 29 of these reasons) for hearing and determination in a subsequent trial, builds on and is consistent with the 22 March Order and 28 June Orders. To make such orders is also consistent with the overarching purpose provided for in the CPA.
However, to make such orders now, whether by reference to the Fist Level Questions or the Second Level Questions, would be inconsistent with the earlier case management orders and would not facilitate the efficient, timely and cost-effective resolution of the real issues in dispute. There are a number of reasons why that is the case.
The first reason is because, depending upon what agreement is reached between the experts in the Structural Engineering Second, Third and Fourth Conclaves, there may be no Stage 1 Issues requiring judicial determination.
To predict that such an outcome is possible is not to be unrealistically optimistic. I proceed on the basis that the experts who are participating in the conclaves and are otherwise engaged in providing joint reports pursuant to case management orders are well qualified and experienced in their respective fields. The experts are expressly bound by obligations in the CPA to act honestly (s 17), not to mislead or deceive (s 21), to narrow the issues in dispute (s 23), to ensure costs are reasonable and proportionate (s 24) and to act promptly and to minimise delay (s 25).
There is every reason to be confident that the experts will each faithfully discharge the obligations to which I have referred.
The joint report completed following the Structural Engineering First Conclave reflected unanimous agreement between the experts. The TEC List approach to expert evidence generally and in these cases specifically is intended to encourage the experts, guided but not constrained by the existing pleadings, to identify and, relevantly in these cases, where appropriate, to agree on whether there are any and if so what defects in the structural design and also to identify and agree about which of the rectification works was reasonably necessary. The earlier case management orders are designed to ensure that all relevant documents are available to the experts to assist them in forming their opinions. The orders I have made for the geotechnical expert evidence respond to an issue previously identified by the Structural Engineering Experts. The experts are assisted in their work by the facilitator whose extensive experience I have already noted.
Taking the orders I have made concerning any matters agreed upon by the Geotechnical Engineering Experts into account and assuming similar orders are made by her Honour hereafter concerning the Structural Engineering Experts, if the experts come up with agreement on an issue which is currently in dispute on the pleadings, that issue will at that point cease to be an issue that separates the parties at any future trial. At a practical case management level and consistent with their obligation to narrow the issues in accordance with s 23 of the CPA, the parties will be bound by the agreement arrived at by the independent experts concerning that issue.
To make orders now, prior to the completion of the Structural Engineering Fourth Conclave, following which the extent of the real issues in dispute are likely to be known, would be premature.
The second reason why it would be both premature and contrary to the CPA to make an order now for the trial of separate questions is because I am not confident that all necessary parties who may be joined to the proceedings are already joined. The orders I will make setting deadlines for the joinder of any additional parties will ensure that joinder happens before any trial of separate questions thus ensuring that all relevant persons are bound. To proceed to order a trial of separate questions before all relevant persons are before the Court would be inconsistent with the overarching purpose.
The third reason it is premature to make an order for the trial of separate questions now is because at both levels, the First Level Questions and the Second Level Questions, the applications are anchored in the current pleadings, but all parties recognise that the pleadings are anticipated to change.
I do not agree with the Co-Owners’ submission that the range of potential pleading amendments is already within the contemplation of the parties.
The early expert conclave process that is currently underway will not only likely serve to both identify and narrow issues in dispute relating to both defects and rectification works, it may lead to amendments to the pleadings which are not yet ‘on the radar’. That is because while the experts are to address the 18 topics referred to in the Structural Engineering First Conclave Report, they are deliberately not confined in their performance of that task by the pleadings. If the experts come up with new or different defects or issues concerning the rectification works that fall outside the pleadings, consistent with the practice in the TEC List, the parties can reasonably be expected to amend their pleadings as appropriate to reflect these new matters.
The Staging Applications are not simple applications for a split trial of liability issues and quantum/relief. The relief sought in each summons refers to particular parts, sections and paragraphs of the pleadings in the proceeding in which that summons is issued. By way of example, the first of the First Level Questions in the Probuild Proceeding is framed in the following terms:
Are there errors and defects in the structural design of the Stage 7 Buildings as pleaded in Part IV, Sections F, G and I and paragraphs 117, 160(b) and (g), 178-179, 211 and 240 of the statement of claim?
It is the pleadings that define the issues for trial, including, as recognised by the orders sought in the summonses, any trial of separate questions. Until the pleadings process informed by the outcome of the Structural Engineering Fourth Conclave is completed it would be premature to make orders of the sort for which the Applicants contend.
Consistent with the CPA, the appropriate way to deal with the uncertainty of pleading issues is to fix a time following the completion of the Structural Engineering Fourth Conclave Report by which any amendment to any pleading must be filed and served. Only once that time has passed is there the requisite certainty about the pleaded issues to enable a trial of separate questions to occur. I will make timetabling orders to ensure any pleading amendments are made prior to the adjourned hearing.
I reject the validity of the ‘subject to further order’ ‘escape valve’ approach for which the Co-Owners contended. In circumstances where there is uncertainty about the issues that will require determination, at least some of the current issues can be expected to fall away, and uncertainty about the pleadings relevant to the two Stage 1 Issues proposed to be the subject of the preliminary trial, to make orders subject to further order would be to undermine the validity of staging orders otherwise made.
The fourth reason to refuse to make an order under rule 47.04 at this time is because I am not persuaded that the clear demarcation between the two issues proposed to be the subject of the two stages, which is needed to support the making of an order, has been established by the Applicants.
Taking by way of example the Second Level Questions, proposed question 4 is in the following terms:
What methodology for seismic design would an experienced structural engineer engaged for the Stage 7 Works exercising reasonable care and skill (reasonable structural engineer) have undertaken when preparing the design for the Stage 7 Works?
(Paragraphs 50-54, 55-63, 65-69, 106, 129-140 and 145 of the FASOC)
(‘Question 4’)
Question 4 is not a question that is drafted by reference to a single paragraph in the pleading. It references several parts of the pleading. One of the paragraphs referenced, paragraph 106(a) alleges:
An experienced structural engineer exercising reasonable care and skill would:
(a) In the premises of paragraph 61, have concluded that the site sub-soil class of the Stage 7 Site most closely resembled Class C_e – Shallow soil, not Class B_e – Rock;
Particulars
(a) Geotechnical report prepared by NSP Geotechnics Pty Ltd dated 30 July 2010 [PAC.003.004.0034];
(b) Geotechnical report prepared by NSP Geotechnics Pty Ltd dated 16 December 2013 [CAL.501.001.3597].
As is apparent from its terms, paragraph 106(a) contains an allegation that goes to issues of liability. That allegation is denied by the Engineering Defendants and is not admitted by Probuild in their respective defences.
Another example of what might be described as a “cross-over” question is proposed question 10. That question is in the following terms:
Did the final structural design of the Stage 7 Buildings comply with:
(a)the applicable standards determined pursuant to question A; and/or
(b)the D&C Requirements and the CA Requirements?
Part (a) of the question may purely enquire about the presence of the defect. Part (b) on the other hand goes to whether there was a breach of contract and raises issues of liability.
These examples are sufficient to demonstrate that at this stage of the Proceedings there is not a clear delineation between the proposed two stages of the hearing.
There is substance to Probuild’s submissions that until the Structural Engineering Fourth Conclave Report is completed it is difficult for the Court to be satisfied there is sufficient delineation of issues to meet the ‘beyond question’ criterion to which the Court of Appeal referred in Murphy.
The adjournment of the Staging Applications provides the opportunity for the moving parties, in consultation with the other parties as contemplated by paragraph 8 of Practice Note SC CC1, to refine the proposed questions for a preliminary trial following the completion of the Structural Engineering Fourth Conclave Report.
While unnecessary to rule on the issue because the Staging Applications are to be adjourned for further hearing, I accept there is substance to the Engineering Defendants’ submission that when drafting the questions there may be certain questions such as those involving the interpretation of applicable building regulations that are legal questions rather than questions for the experts. While that is the case, that does not mean that such questions are not appropriate for determination pursuant to rule 47.04.
I accept that by reason of the decision of the Court of Appeal in Murphy, it is not appropriate to frame questions to be answered on the basis of alternative assumptions. That potential problem may be addressed by a combination of questions which require the experts to consider and opine on alternatives and for the judge to decide as a matter of law which of those alternatives is required to be complied with.
During the hearing, senior counsel for the Engineering Defendants, Mr Harris KC, gave an example concerning the construction of the Building Code where there might be 10 methods pursuant to AS3600 which are ‘deemed-to-satisfy’ the requirements of the Code. It would be up to the experts to provide factual evidence about which of the alternative methods would be appropriate and for the judge to determine the proper construction of the Code as a matter of law.
The fifth reason why it is appropriate to adjourn the Staging Applications for further hearing concerns the question of the uncertainty that presently surrounds the likely duration of the proposed preliminary trial. If a preliminary trial could be completed within 3–4 weeks, that is a very different proposition to a preliminary trial lasting 1.5–2 months as contemplated by the Applicants in the lead-up to the hearing.
The completion of the Structural Engineering Fourth Conclave Report and any further pleading processes will enable the preparation of a trial plan for the proposed preliminary trial that provides an updated and realistic estimate of the duration required for any such trial.
There is a practical resourcing reason why it would not be appropriate at this time to order a preliminary trial on the premise that such a trial could take place in the second half of 2025. That is because the judge managing these Proceedings and the likely trial judge, Stynes J, does not have availability to hear a 1.5–2 month trial in the second half of 2025. The position would be different if the preliminary trial were estimated to require 3–4 weeks of hearing time. Following consultation with her Honour, a 4 week block commencing 10 November 2025 has provisionally been set aside for a preliminary trial of separate questions.
I do not accept if a preliminary trial were able to be heard in November 2025, that to order such a trial is likely to prolong or delay the hearing and determination of the Proceedings compared to a single trial. The inability to accommodate a 1.5–2 month trial in the second half of 2025 illustrates the likely difficulty of securing a much larger trial window than would be required for a single trial of all issues in the second half of 2026.
The sixth reason, I accept the proposition that a split trial approach which involves a preliminary trial of the two issues the subject of the First Level Questions has the potential to enhance the prospects of settlement. That is a factor in favour of making orders not only adjourning the Staging Applications but doing so together with directions intended to provide for the efficient further consideration of the applications in August 2025.
I accept that once the questions of what constitute the defects and what constitutes reasonable and necessary rectification work are determined, that it should be relatively easy to determine quantum. That is because the rectification work will have been done and the cost should be readily capable of being ascertained. There will need to be evidence concerning alleged losses from tenancy and other income relating to the Stage 7 Buildings, but as far as building rectification cost is concerned, that will likely become known after determination of the preliminary questions, enabling a ready ascertainment of the maximum exposure of the defendants.
I accept that the trial of separate questions may materially facilitate a commercial resolution of the disputes. The identification of the nature and extent of the alleged design defects and what rectification works were reasonable and necessary are core issues in the Proceedings. Once determined, the known outcomes on those issues are likely to assist the parties to evaluate their prospects both as to liability and quantum.
I do not regard the Applicants’ submission — that the experts, or the Court following a preliminary trial, may determine there are no defects or that the preliminary questions are wholly resolved in the defendants’ favour causing the litigation to end — as realistic. Implicit in that submission is the proposition that the Co-Owners have spent around $200m carrying out works to rectify defects that did not exist. As I mentioned during the hearing, that seems inherently unlikely.
I do not agree with Probuild that staging the Proceedings will detract from rather than promote the prospects of settlement. I do not agree that because KPMG and the Building Surveying Defendants are not directly involved in the Stage 1 Issues that a trial of preliminary questions will discourage those parties from participating in settlement discussions. The most likely outcome following a preliminary trial is that all parties will know the defendants’ maximum exposure.
The Proceedings involve multiple parties and significant quantum. I agree with KPMG that completion of the Structural Engineering Fourth Conclave Report will enable parties such as KPMG and the Building Surveying Defendants to consider the basis of their exposure. The better informed the parties are, the better the position each of them is in to consider settlement.
The seventh reason, to adjourn the Staging Applications until after the completion of the Structural Engineering Fourth Conclave Report will assist in the identification of what lay evidence will be needed to enable a preliminary trial of the two substantive issues the subject of the Staging Applications.
The adjournment of the applications provides the opportunity for the parties to confer and to consider what if any lay evidence may be needed or be appropriate as part of any preliminary trial. That includes if thought appropriate depending on the questions proposed, lay evidence from Mr Cesarello about the advice allegedly provided to him concerning site sub-soil classification referred to in the particulars to paragraph 61 of the Engineering Defendants’ Defence, such advice apparently not having been recorded or evidenced in writing.
As matters presently stand, it appears to me that concerns are exaggerated about witnesses being called twice and about credit attacks in a preliminary trial where the same witness is to give evidence in a subsequent trial. Given the approach which has been adopted to expert evidence, and the duties owed by the experts, I would be surprised if there are any credit issues involving experts.
The identification of witnesses via a draft trial plan and the identification of issues in the form of specific questions proposed for determination at a preliminary trial will enable any necessary directions to be given to manage issues that may arise from witnesses with the potential to be called to give evidence at both stages should a trial of separate questions be ordered.
The eighth reason, to the extent it is material to the determination of the Staging Applications, the adjournment of the applications rather than their dismissal, and the making of orders and setting of dates both fixed and tentative as I intend to do, reduces the likelihood of the conflict issue disrupting the efficient conduct of the Proceedings.
The conflict issue raised by the Co-Owners is an issue which, as explained by senior counsel for the Co-Owners, will need to be addressed and requires management. However, I do not consider the existence of the conflict issue warrants the making of an order now for a trial of separate questions rather than adjourning the Staging Applications until after the completion of the Structural Engineering Fourth Conclave.
When asked whether the better management of the conflict issues was the ‘only real reason’ to make an order under r 47.04 at this stage of the Proceedings, Mr Gleeson said on behalf of the Co-Owners ‘there are other reasons, and it’s the broader efficiency of the matter, that the parties do understand the structure of the proceeding going forward’. He submitted that without an order for a separate trial the parties ‘don’t have the certainty as to the architecture of the overall proceeding’.[24] He added:
… just proceeding with the timetabling of the structural engineers and their conclaves and their process without doing more and actually staging it compounds the potential problems because of the lack of structure.[25]
[24]Transcript of Proceedings (23 October 2024) 45.9-21.
[25]Transcript of Proceedings (23 October 2024) 50.28-51.3.
I am not persuaded that in light of the detailed orders I propose to make that there is much force in this submission. Other than the conflict issue, I cannot identify any other material reason why it would be preferrable to order a trial of preliminary questions now rather than, if considered appropriate to make such an order at that time, in August 2025.
Lay evidence

While the summonses do not seek an order that if the Staging Applications are successful the balance of the Proceedings should be stayed and that no steps should be taken to otherwise advance the matters to trial, during the hearing this was in substance what the Applicants contended for .
The potential problem, raised by Mr Gleeson, which would be faced by the solicitors and counsel retained by the Co-Owners, involves taking instructions from lay witnesses for proofs of evidence where what those witnesses say may be material to the claim by one of the 50% unit holders of Pacific Werribee against the other in the QIC Proceeding, and will remain an issue that needs to be dealt with and managed, irrespective of whether an order is made now or later for the trial of separate questions.
One means of managing conflict concerns would be to ensure that such lay evidence is not progressed until after any trial of separate questions or until orders are made dismissing the Staging Applications following the further hearing on 26 August 2025. Although Mr Gleeson initially said that an approach that involved no lay evidence or discovery prior to completion of a preliminary trial would be ‘unsatisfactory’, he later indicated that such an approach would provide sufficient certainty so long as it was clear that orders will not be made for the progression of interlocutory steps relevant to the subsequent trial, prior to the preliminary trial.
Mr Gleeson seemed to put as a matter of certainty, that around the determination of the Stage 1 Issues, Allens and counsel for the Co-Owners will no longer be able to act for the Co-Owners.
As senior counsel for Probuild, Mr Slattery KC submitted, it is not clear why the conflict issue to which Mr Gleeson referred will not continue if the present firm of solicitors and the Co-Owners’ counsel team is replaced by a new firm of solicitors or new counsel.
Probuild resisted the proposition, put by the Applicants and KPMG, that no action should be taken to progress the balance of issues until after the Structural Engineering Fourth Conclave has concluded and the Court makes a determination about any areas of disagreement among the experts. Probuild submitted that:
(a)progressing lay evidence facilitates the overarching purpose; and
(b)settlement prospects will be advanced by progressing evidence.
As senior counsel for Probuild correctly submitted, the conflict problem is not one of his client’s making. The same may be said of a number of the other defendants across the Proceedings.
It may well be necessary and appropriate to make orders concerning lay evidence following a further hearing in August 2025. However it is not necessary or appropriate to make any orders at this time concerning that subject matter.
Orders
For the reasons previously discussed, I will make orders in substance as set out below in the Probuild Proceeding.
Orders to similar effect will be made in the QIC Proceeding to the extent necessary.
Additional parties/Joinder
Any application by any existing party in the Probuild Proceeding or in the QIC Proceeding for the joinder of AIG or any other insurer of Probuild must be filed and served by no later than:
(a)six months after the delivery of the decision of Sloss J on the appeal by Wadren from part of the judgments of Barrett AsJ on 29 June 2023 and 17 August 2023 in proceeding S ECI 2022 03803 by notice dated 5 September 2023; or
(b)should there be an appeal from the decision of Sloss J, by no later than six months after the hearing and determination of any such appeal.
Other than any application for the joinder of AIG or any other insurer of Probuild, any application by any existing party in the Probuild Proceeding or in the QIC Proceeding for the joinder of:
(a)the Geotechnical Engineers or either of them or for the joinder of any other person; or
(b) any third party notice for any existing party in the Proceedings against the Geotechnical Engineers or either of them or any other person,
must be filed and served by no later than 28 February 2025.
Any application that proceeding S ECI 2024 03985 be consolidated with or managed or heard and determined together with the Probuild Proceeding and the QIC Proceeding or either such proceeding, including any application to that effect in proceeding S ECI 2024 03985 must be filed and served by no later than 4:00pm on Friday, 28 February 2025.
Amendments to pleadings
Any party to either of the Proceedings which wishes to amend its pleading or any third party notice or notice of contribution in either of the Proceedings (‘moving party’) must file and serve any proposed amended pleading or notice on all parties affected by the proposed amendment by no later than 4:00pm on Friday, 27 June 2025.
Any affected party who objects to the proposed amended pleading or notice (‘responding party’) must notify the moving party of its objection and the grounds for such objection by no later than 4:00pm on Friday, 4 July 2025.
In the case of objection, by no later than 4:00pm on Friday, 18 July 2025 counsel retained for the moving party and for the responding party must confer in relation to the objection as specified in paragraph 8.1.2 of Practice Note SC CC1.
If following conferral the parties are unable to agree upon any proposed amendment, the parties must send a joint email to the Chambers of Stynes J seeking a determination of those aspects of any proposed amendments remaining in dispute.
Further hearing of the Staging Applications
By no later than 4:00pm on Tuesday, 1 July 2025 the Applicants (moving parties) must serve on all parties to the Proceedings:
(a)a list of the separate questions those parties contend should be the subject of a preliminary trial (‘list of questions’); and
(b)a list of the witnesses, lay and expert, the Applicants anticipate will be required to give evidence at the preliminary trial (‘witness list’).
By no later than 4:00pm on Monday, 14 July 2025 any party who wishes to be heard on the adjourned hearing of the Staging Applications (‘interested party’) must serve on the moving parties and on all other parties that party’s response to the list of questions and witness list.
By no later than 4:00pm on Friday, 25 July 2025 counsel retained for the moving parties and for each of the interested parties must confer in relation to the list of questions and the witness list, as specified in clause 8.1.2 of Practice Note SC CC1.
Participation by parties in the conferral is without prejudice to that party’s right, should they wish to so contend, that no order should be made for a trial of separate questions.
Without the leave of Stynes J, no party shall be heard on the further hearing of the Staging Applications unless that party has by its counsel conferred in accordance with clause 8.1.2 of Practice Note SC CC1.
By no later than 4:00pm on Wednesday, 30 July 2025 the moving parties must file and serve on all parties to the Proceedings:
(a)a list of questions revised following the conferral process (‘revised list of questions’) in a schedule which clearly indicates questions which are agreed, and are opposed, and if opposed, by whom (‘responding party’);
(b)a witness list revised following the conferral process (‘revised witness list’) together with a draft trial plan for the conduct of the preliminary trial for which the moving parties contend, marked up to show any areas of disagreement and, in respect of those areas, specifying the party or parties who do not agree.
By no later than 4:00pm on Friday, 15 August 2025 the moving parties and the responding parties shall file and serve outlines of submissions in advance of the adjourned hearing of the Staging Applications:
(a)in a case of the moving parties, limited to 10 pages;
(b)in the case of each responding party who has participated in the conferral process, limited to 6 pages and limited as applicable to:
(1)the grounds on which that party contends no order should be made for a trial of separate questions;
(2)the revised list of questions to which that party maintains an objection; and
(3)the revised witness list.
The plaintiffs’ summons dated 20 August 2024 (including the Staging Application in the Probuild Proceeding) is adjourned for further hearing before Stynes J on 26 August 2025 at a time to be fixed on an estimate of one day.
If it is determined appropriate to hear the trial of separate questions pursuant to rule 47.04 of the Rules, provided that the subject matter of the preliminary trial concerns whether there are errors and defects in the structural design for the Stage 7 Works and whether the remedial works undertaken are reasonable and necessary, and the estimated duration of the preliminary trial is no more than 4 weeks in duration, then subject to further or other order, such trial:
(a)will commence on Monday, 10 November 2025 and sit for no more than 20 days (excluding Fridays);
(b)will be conducted in accordance with a trial plan, agreed between the parties or, in default of agreement, as determined at the adjourned hearing of the Staging Applications; and
(c)will be conducted on the basis that active participation in the preliminary trial will be limited to those parties who participated in the conferral leading to the revised list of questions and the revised witness list.
Building surveying expert evidence
By 4:00pm on Monday, 18 November 2024 each party who has not already done so is to confirm in writing:
(a)the name of any building surveyor expert witness upon whose evidence it proposes to rely on the issue of the applicable standard for any assessment or rectification of any defects (‘Building Surveyor Expert’); and
(b)the availability of that witness to participate in a conferral between the parties' nominated Building Surveyor Experts in the time period provided for below.
By 4:00pm on Monday, 25 November 2024 the parties are to confer and attempt to agree on:
(a)the questions they consider should be addressed by, and any instructions to be given to, the Building Surveyor Experts; and
(b)the documents they consider should be provided to the Building Surveyor Experts,
on the issue of:
(c)the applicable standard that should have been applied to the Stage 7 Works; and
(d)the applicable standard for any assessment or rectification of any defects for the purpose of the Building Surveyor Second Conclave (as defined below).
To the extent a document that a party considers should be provided to the Building Surveyor Experts for the purposes of the previous order has not been disclosed, that party is to disclose the document to the other parties by 4:00pm on Monday, 25 November 2024.
If agreement concerning the matters set out above is not reached by 4:00pm on Monday, 25 November 2024 then:
(a)by 4:00pm on Monday, 9 December 2024 the parties are to file and serve written submissions in respect of any areas of disagreement;
(b)the Court will advise administratively as to its determination on the papers of any disagreement between the parties regarding the matters set out in Order 2 above; and
(c)the orders below are stayed pending determination by the Court of any disagreement referred to in these Orders.
If agreement concerning the matters set out above is reached by 4:00pm on Monday, 25 November 2024, then by 4:00pm on Monday, 2 December 2024 the plaintiffs are to provide to the Building Surveyor Experts:
(a)a document which sets out the questions and instructions the parties agree should be addressed by the Building Surveyor Experts for the purpose of the Building Surveyor Second Conclave (as defined below); and
(b)all the documents which the parties agree should be provided to the Building Surveyor Experts for the purpose of the Building Surveyor Second Conclave (as defined below), excluding any duplicate documents.
By 4:00pm on Monday, 16 December 2024 the Building Surveyor Experts are to confer, in the presence of Dr Manly, on the questions agreed by the parties and/or determined by the Court on the issue of the applicable standard:
(a)that should have been applied to the Stage 7 Works; and
(b)for any assessment or rectification of any defects, having regard to the instructions and documents provided to them pursuant to these Orders (‘Building Surveyor Second Conclave’).
By 4:00pm on Monday, 23 December 2024 the Building Surveyor Experts are to prepare a joint report containing their joint opinions (that is, identifying any issues upon which they agree), including reasoning, as to the matters the subject of the Building Surveyor Second Conclave (‘Building Surveyor Second Conclave Report’). If the expert witnesses are unable to express a joint opinion on any matter, then the expert witnesses must describe the difference(s) between the experts' opinions and set out a summary of their respective reasons for disagreeing.
The Building Surveyor Second Conclave and the process of preparing the Building Surveyor Second Conclave Report are to be conducted in the absence of the parties and their legal representatives. Notwithstanding this, the expert witnesses may jointly request further information, documents or direction by letter signed by them directed to the practitioners for each of the parties and may receive such further information, documents or direction.
While the parties and their lawyers cannot talk to the experts during the course of the Building Surveyor Second Conclave, they are free to do so between each of the conclaves (that is, after each report is issued and prior to the commencement of the next conclave).
By 4:00pm on Monday, 24 February 2025 the parties are to file and serve any report of their Building Surveyor Expert(s) providing the expert’s opinion and reasoning on any difference(s) of opinion identified in accordance with the previous orders (‘Building Surveyor Individual Reports’). Each Building Surveyor Individual Report must contain an annexure that lists all documents referred to or relied upon by the expert.
The Building Surveyor Second Conclave Report and Building Surveyor Individual Reports must be released concurrently to the parties and filed by the plaintiffs within two business days of their release.
The plaintiffs are to provide the Building Surveyor Second Conclave Report and any Building Surveyor Individual Reports delivered pursuant to these Orders to the Structural Engineering Experts (as defined in order 14 of the Probuild 28 June Order, as varied) by 4:00pm on Wednesday, 26 February 2025.
Further disclosure
By 4:00pm on Monday, 27 January 2025 the plaintiffs are to disclose to the parties in the Proceedings:
(a)any further documents relied upon by MPN in developing the structural design for Permanent Rectification Works design; and
(b)any further occupancy permits for the Permanent Rectification Works (defined in the statement of claim, as amended).
By 4:00pm on Monday, 3 February 2025 the plaintiffs are to provide to the Structural Engineering Experts the documents disclosed pursuant to these Orders.
Objections to documentary evidence relied upon by the experts
By 4:00pm on Monday, 17 February 2025 the parties to the Proceedings are to exchange lists of any objections taken to documents provided to:
(a)the Structural Engineering Experts pursuant to order 7 of the Orders dated 22 March 2024, order 16(c) and/or 26 of the Probuild 28 June Order, order 2(c) of the Orders made on 14 November 2024 and these Orders;
(b)the Geotechnical Engineering Experts pursuant to order 21 and/or 25 of the Order made on 14 November 2024;
(c)the Building Surveyor Experts pursuant to these Orders.
By 4:00pm on Monday, 17 March 2025 the parties to the Proceedings are to confer and attempt to resolve any objections notified by the parties pursuant to these Orders.
Document sharing
To the extent not already served, the parties are to provide each other and to provide the parties to the QIC Proceeding:
(a)all documents provided to the experts pursuant to these Orders;
(b)the reports produced under these Orders; and
(c)any joint request by the experts for further information, documents or direction pursuant to these Orders, and all responses to such requests.
The documents referred to in these Orders may be used by any party in either of the Proceedings.
Other
The costs of all parties in relation to the Staging Application, including the costs of the hearings on 23 and 24 October 2024, are reserved.
Liberty to apply.

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SCHEDULE OF PARTIES

S ECI 2023 00960

WADREN PTY LTD (ACN 005 537 235) in its capacity as trustee for THE HOPPERS CROSSING UNIT TRUST (ABN 83 405 769 465)	First Plaintiff
QIC WERRIBEE PTY LTD (ACN 624 121 204) as trustee for THE QIC WERRIBEE TRUST (ABN 76 994 021 211)	Second Plaintiff
- and -
PROBUILD CONSTRUCTIONS (AUST) PTY LTD (subject to a Deed of Company Arrangement) (ACN 095 250 945)	First Defendant
EGIS CONSULTING PTY LTD (ACN 109 448 982)	Second Defendant
GARDNER GROUP PTY. LTD. (ACN 056 178 262)	Third Defendant
DARREN JOHN SLATTER	Fourth Defendant
ANTHONY GERARD CESARELLO	Fifth Defendant
EPC PACIFIC PTY LTD (ACN 153 243 586)	Sixth Defendant
PACIFIC SHOPPING CENTRES AUSTRALIA PTY LTD (ACN 005 537 244)	Seventh Defendant
KPMG PROPERTY & ENVIRONMENTAL SERVICES PTY LTD (ACN 103 479 992)	Eighth Defendant
QIC PRIVATE CAPTIAL PTY LTD (ACN 076 279 528)	Ninth Defendant
- and -
QIC PRIVATE CAPITAL PTY LTD (ACN 076 279 528) as trustee for THE QIC PROPERTY FUND	First Third Party
EPC PACIFIC PTY LTD (ACN 153 243 586)	Second Third Party

S ECI 2023 05073

QIC WERRIBEE PTY LTD (ACN 624 121 204) as trustee for THE QIC WERRIBEE TRUST	First Plaintiff
QIC PRIVATE CAPITAL PTY LTD (ACN 076 279 528) as trustee for THE QIC PROPERTY FUND	Second Plaintiff
QIC RETAIL (NO. 2) PTY LTD (ACN 080 215 167) as trustee for THE QIC RETAIL (NO. 2) FUND	Third Plaintiff
QIC RETAIL PTY LTD (ACN 067 279 546) as trustee for THE QIC TOWN CENTRE FUND	Fourth Plaintiff
- and -
WADREN PTY LTD (ACN 005 0537 235) as trustee for THE HOPPERS CROSSING UNIT TRUST	First Defendant
EPC PACIFIC PTY LTD (ACN 153 243 586)	Second Defendant
PACIFIC SHOPPING CENTRES AUSTRALIA PTY LTD (ACN 005 537 244)	Third Defendant
KPMG PROPERTY & ENVIRONMENTAL SERVICES PTY LTD (ACN 103 479 992)	Fourth Defendant
EGIS CONSULTING VIC PTY LTD (ACN 109 448 982)	Fifth Defendant
ANTHONY CESARELLO	Sixth Defendant
GARDNER GROUP PTY LTD (ACN 056 178 262)	Seventh Defendant
DARREN SLATTER	Eighth Defendant
PROBUILD CONSTRUCTIONS (AUST) PTY LTD (subject to a Deed of Company Arrangement) (ACN 095 250 945)	Ninth Defendant

Transcript of Proceedings (23 October 2024) 51.3-8; Transcript of Proceedings (24 October 2024)

239.30–240.12.

[2024] VSC 724

21 November 2024