Zhou v Rosch
[2017] FCA 805
•16 June 2017
FEDERAL COURT OF AUSTRALIA
Zhou v Rosch [2017] FCA 805
File number: NSD 2088 of 2016 Judge: RARES J Date of judgment: 16 June 2017 Legislation: Federal Court of Australia Act 1976 (Cth) Pt VB, s 37P
Federal Court Rules 2011 r 16.51
Home Building Act 1989 (NSW)
Cases cited: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199 Date of hearing: 16 June 2017 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: No Catchwords Number of paragraphs: 12 Counsel for the Applicant: Dr A Greinke Solicitor for the Applicant: Auyeung Hencent & Day Lawyers Counsel for the Respondents: Mr B Le Plastrier with Ms J Ambikapathy Solicitor for the Respondents: Fielding Robinson ORDERS
NSD 2088 of 2016 BETWEEN: RAN ZHOU
Applicant
AND: MIKE ROSCH
First Respondent
ELEGANT PROPERTIES PTY LTD (ACN 072 746 322)
Second Respondent
JUDGE:
RARES J
DATE OF ORDER:
16 JUNE 2017
THE COURT ORDERS THAT:
1.The interlocutory application filed 15 June 2017 be dismissed.
2.The respondents pay the costs of the interlocutory application on an indemnity basis.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)RARES J:
This proceeding commenced on 2 December 2016. Ran Zhou, the applicant, amended her statement of claim on 12 December 2016 pursuant to r 16.51 of the Federal Court Rules 2011. The proceeding came before me for the first case management hearing on 3 February 2017. It involves a claim by Ms Zhou for return of $170,000 that she paid to one or other of the two respondents, an individual, Mike Rosch who is a builder, and his company, Elegant Properties Pty Limited, under a contract to demolish a house and build two new ones on the same land.
The substantive basis of Ms Zhou’s claim was that neither Mr Rosch nor his company was licensed or insured under the Home Building Act 1989 (NSW) to perform the work the subject of the contract. That statute provided that a person could not contract to do any residential building work of the kind that the statement of claim alleged, that ultimately, Mr Rosch or his company entered into, unless the person was, first, licensed to perform such work and, secondly, insured in accordance with the Act.
At the first case management hearing on 3 February 2017, I explored with the solicitor then appearing for the respondents the evasive and unsatisfactory way in which their defence dated 18 January 2017 had been pleaded. Moreover, it seemed to me that the issues and the sum at stake required that the parties urgently seek to resolve the matter before they wasted costs that would far exceed what was at issue in the proceeding. I referred the matter to mediation before the Registrar to occur on or before 1 March 2017, unless the Court otherwise ordered. I ordered that the respondents file and serve an amended defence that pleaded responsively to the allegations in the statement of claim on or before 8 March 2017, and stood the matter over to 10 March 2017.
On 10 March 2017, the licensing situation of the respondents had still not been satisfactorily elaborated by the respondents. I made orders that on or before 14 March 2017, the respondents provide copies of any licence held by each of them at the date of the contract, and any insurance policy, certificate of eligibility or other document evidencing insurance arrangements applicable to the work the subject of the contract, and that Elegant Properties file and serve any cross-claim on Ms Zhou by 17 March 2017. I then varied the order for mediation so that it should occur on or before 26 April 2017 and stood the matter over to 28 April 2017 for further case management.
On 28 April 2017, I considered the contractual document itself. That was because of the ambiguities raised in the respondents’ pleadings as to who on the respondents’ side was the contracting party. I required the respondents to file and serve an affidavit attaching a copy of each of Mr Rosch’s and Elegant Properties’ Australian Business Number registrations and New South Wales builder’s licence as current between 1 January 2016 and 30 September 2016, in order to clarify the identity of the contracting party by reference to the respondents’ uses in the contract of Australian Business Numbers and licence numbers. I required the parties give general discovery on or before 8 May 2017, and made orders for the service of outlines of evidence of each lay witness either side wished to call and brief written opening submissions, limited to five pages, fixing the matter for hearing to commence on 28 June 2017 with an estimate of two days.
Alexander Robinson, the solicitor for Mr Rosch, but notably not Mr Rosch, swore two affidavits, one on 15, and one on 16, June 2017, seeking to support the respondents’ interlocutory application of 15 June 2017 to further amend their defence. Mr Robinson said that, during the process of preparing Mr Rosch’s outline of evidence on 1 June 2017, it became apparent to him for the first time that Mr Rosch and Ms Zhou had supposedly been operating on the basis of an assumption, arising from a conversation between Mr Rosch and her, that insurance would not be provided until the design was complete, which could only be provided after demolition of her existing premises had occurred, and that Mr Rosch had done a considerable amount of work at her request of which she allegedly took the benefit. Mr Robinson then instructed counsel to prepare a proposed further amended defence that pleaded the legal effect of these matters and, on 5 June 2017, Mr Robinson sent the proposed amended defence to the solicitors for Ms Zhou. A mediation occurred on 8 June 2017 before the Registrar, but was unsuccessful.
The proposed amendments will, as counsel for the respondents submits, extend the proceedings and involve a new, substantive and potentially complicated set of legal issues arising from the attempt to rely upon the alleged assumption to which Mr Robinson referred.
Consideration
In my opinion, it is not in the interests of justice to permit this late amendment in the circumstances. To do so would frustrate rather than facilitate the achievement of the overarching purpose of the civil practice and procedure provisions referred to in Pt VB of the Federal Court of Australia Act 1976 (Cth), namely, to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible. The amount of money involved in this proceeding is relatively trivial as against the expense that the parties already have incurred and are likely, at any hearing, however long it is, to incur, notwithstanding that it appears to be more important to the parties to continue to pursue their dispute over the $170,000 than to exercise their capacity to resolve it.
In my opinion, the respondents have had a far more than adequate opportunity to propound and articulate their defence to the amended statement of claim. At no time in the various case management hearings before me has there been any suggestion of the new argument now sought to be propounded as a defence. There is an absence of an explanation as to why Mr Rosch never raised, until giving his proof of evidence, the fact that Ms Zhou, if it were the case, had been fully aware of his or Elegant Properties’ lack of insurance and had wished, apparently, the work to go ahead. In my opinion, that tells very strongly against permitting the respondents now to raise this at the heel of the hunt: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199 at 226-227 [153]-[160] per Gilmour, Perram and Beach JJ.
The circumstances that made it necessary for me to make the various orders during case management to elicit from the respondents the nature of their defences and what the basis of them were should have enabled them, effectively, to have raised any substantive and important defence that they wished to, well before the time Mr Rosch provided instructions for his outline of evidence to Mr Robinson. To allow this new issue to be raised now, in my opinion, would restructure substantively the nature of the proceeding and add a range of complexity and difficulty to it that will put the sufficiency of the two day estimate that I relied on in jeopardy. Indeed, counsel for the respondents suggested that, as presently advised, the hearing without the proposed amendment is likely to conclude in a day, whereas if the amendment were allowed, it may be necessary to adjourn it after the two days to take detailed written submissions, inter alia, about the new defence sought to be raised.
In my opinion, it is in the interests of justice, having regard to the full and, in my opinion, fair opportunity the respondents have already had to propound any defence they wished to rely on, to have the hearing occur when it is supposed to occur, without the proceeding being further complicated by an amendment that could, and should, have been raised well beforehand by Mr Rosch giving his solicitor proper instructions as to the circumstances of his defence.
For those reasons, the interlocutory application must be dismissed and the respondents should pay Ms Zhou’s costs on an indemnity basis: see s 37P of the Federal Court Act.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 17 July 2017
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