The plaintiff, by statement of claim filed on 15 February 2018, seeks damages under the general law or the Australian Consumer Law as contained in Sch 2 of the Competition and Consumer Act 2010 (Cth) and Fair Trading Act 1987 (NSW) as against the first and second defendants. The sum now claimed has been quantified at 345,084.38 as against both defendants, together with interest calculated up to today at $5,043.90. The plaintiff also seeks an order for costs on the ordinary basis.
The evidence in question consists of the following:
1. the affidavit of Mark Machaalani, sworn 21 May 2018;
2. the affidavit of Manoj Abichandani, sworn 21 May 2018, together with a series of exhibits.
There is also a notice of motion, returnable instanter, the contents of which I will briefly set out, and a schedule of interest prepared for my assistance.
The defendants were called outside the Court three times and have not appeared. This means that this hearing must proceed in accordance with r 29.7 Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), which sets out the procedure to be followed if a party is absent. In those circumstances, the Court may proceed with the trial generally and may finalise the entire claim as long as certain important criteria have been satisfied.
The first of these is that a party is relevantly absent only if he, she or they had knowledge of or notice of the hearing date and is neither present nor represented when the matter is due to be heard. In the present case, I have had the benefit of seeing the affidavit material in support of the notice of motion, which provides details of the circumstances in which Mr Willatt has been served and also of notification of both parties of the hearing date in accordance with orders made by the judicial registrar and the registrar. I note in particular the orders made on 11 April and 13 April concerning notification of the opposing solicitor and the making of a substituted service order, which has within complied with as is set out in the affidavit.
I have next had careful regard to my obligations as a judge where a party is not present in accordance with the often‑cited authority of the decision of Barrett J in Satz v ACN 069 808 957 Pty Ltd [2010] NSWSC 365, and I have drawn the attention of counsel for the plaintiff to the provisions of UCPR r 29.7 to ensure that all appropriate measures have been drawn to my attention for the purpose of hearing this application.
The first issue I should note is that while there is an assessment of damages in relation to the second defendant, Altura Construction Pty Ltd, an application was made today for judgment to be entered against the first defendant and for the assessment to proceed on the basis that it would relate to the claim against him as well. The reasons for this are set out in part in the affidavit of Mark Machaalani and, basically, what is clear from the information provided to me and from the information provided to the Assistant Registrar Fukuda‑Oddie is that the solicitors for Altura Construction Pty Ltd in proceedings 2017/308945, who are instructed by the first defendant, appear to be acting for Altura Construction Pty Ltd in those proceedings which I understand are being heard by another judge in this Court. In those circumstances, appropriate orders were sought for those solicitors to be notified.
The first defendant is the sole director of the company which is the second defendant and from reading the affidavit material, it is clear that he is the controlling mind of the second defendant and any notification to the company must be taken as notification of the director.
While I am conscious that the Court should only in very clear circumstances make an order that default judgment be entered and assess the damages immediately, the circumstances in which there has been default judgment against the company for some time, the very close degree of connection between the first and second defendant, and the material set out in the affidavit, persuades me that it would be consistent with my obligations under s 56 Civil Procedure Act 2005 (NSW) to proceed on this basis rather than to adjourn the hearing for the purpose of ensuring that the first defendant is aware that default judgment has been entered against him in circumstances where he, as opposed to the company, may wish to oppose the entry of judgment.
The merits of the case are clear from the affidavit of Mr Abichandani and also from the helpful written submissions provided by counsel for the plaintiff.
The sums claimed arose from, essentially, remedial building work and a claim for loss of rental income in circumstances where a significant error was made by one or both of the defendants (hereafter referred to as "the defendants" as it would appear that there is some doubt as to which of them was the contracting party) made a significant error in that they allowed twice for a 1.5‑metre basement wall with the result that the wall was put in the wrong spot and there was a loss of a considerable part of the basement area for parking.
The circumstances were as follows. The plaintiff provided the defendants with construction documents in or about June 2016, being the plans and specifications provided to the plaintiff by the principal certifying authority under the Environmental Planning and Assessment Act 1979 (NSW). During the period July 2016 and September 2017 the works were carried out and a sum of $35,200 was paid. It was a requirement of the construction documents that the plaintiff surrender 1.5 metres of the site to the Parramatta City Council for road widening, which reduced the frontage of the site to 16.18 metres thereby creating new boundaries for the site. This is where the error was made and the 1.5 metres appears to have been inserted twice.
The defendants issued seven progress claims for the works, all of which were paid in full. There were engineering plans which have been provided to me, and I note also that in the course of construction work, the plaintiff paid for certain items, such as grates, material from an engineering firm and metal doors, which were delivered to the site and appear to have been retained by the defendants. It is clear that something went badly wrong because the affidavit of Mr Abichandani describes the problems he encountered, and although that description is brief, it paints a picture of what appears to have occurred after the plaintiff received an improvement notice from SafeWork NSW in January 2017 to engage a remedial builder after having been unable to contact the defendants who were last seen carrying out works in mid‑November 2016.
The remedial builder "Frontier" entered into a contract with the plaintiff on 13 January and they issued a series of claims, all of which have been paid in full by the plaintiff, as is set out in the plaintiff's affidavit at paragraphs 29 and 30.
The claim has been broken down in written submissions to be the following:
1. Rectification costs - A summary of these is set out in the written submissions at paragraph 22 and these total $240,780.94. This has been paid in full.
2. The costs of grates, material and doors - As noted above, the plaintiff paid for these, but they were apparently taken by the defendants. This totals $10,699.44.
3. Supervision costs - These are set out at paragraph 29 of the written submissions and total $36,104.
4. Loss of rental income - This is set out at paragraphs 31 to 41 of the written submissions. The method used has been to endeavour to place the plaintiff in the same position with respect to damages as if the contract had been performed and is put as being a second limb of the rule in the Hadley v Baxendale claim. The plaintiff has sought five months of lost rental on the basis that Frontier took five months to complete the rectification works and has costed this out accordingly. I note that what is claimed here is also described as being a loss of chance along the general principle set out in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638. I am satisfied that the method used is appropriate. I consider the amount of 50% discount for contingencies to be quite generous. Accordingly, this is $57,500.
The whole of the amount sought, namely $345,084.38, is made up of these separate sums, each of which I am satisfied is a reasonable amount.
[2]
Orders
Accordingly, I make the following orders:
1. Defendants called outside court 13D three times at 12.15pm and 12.20pm, no appearance.
2. Grant leave to the plaintiff to file a Notice of Motion for default judgment against the first defendant in court returnable instanter upon the undertaking of the plaintiff's solicitor to pay the filing fee in 7 days.
3. Direct entry of judgment against first defendant (note judgment already entered against second defendant), with damages to be assessed forthwith.
4. Judgment for the plaintiff against the defendants in the sum of $345,084.38 plus interest of $5,043.90, making a total of $350,128.28.
5. Defendants pay plaintiff's costs on the ordinary basis.
6. Exhibits retained until further order.
[3]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 13 June 2018
Parties
Applicant/Plaintiff:
Abichandani
Respondent/Defendant:
Willatt
Legislation Cited (6)
Australian Consumer Law Environmental Planning and Assessment Act 1979(NSW)