C & V Engineering Pty Ltd v Metropolitan Demolitions Pty Ltd

District Court of NSW|2022-05-25

Judgment

On 12 May 2022 I delivered reasons for judgment and directed the parties to confer with a view to agreeing on orders to reflect those earlier reasons (C & V Engineering Pty Ltd v Metropolitan Demolitions Pty Ltd [2022] NSWDC 154). In the course of those earlier reasons, amongst other things, I referred to the Court's predisposition, expressed during the hearing, to refer issues of quantum regarding the plaintiff's successful claim of a breach of contract in relation to Building B. I also indicated that neither party raised objection to the proposed referral.
The parties have supplied versions of proposed short minutes and submissions.
Although they made some submissions on the issue, the parties agree that the question of costs (and fees) should be addressed following the completion of the reference. The submissions may be put aside until it is necessary to address them. It would be expected that the existing submissions on costs will be supplemented following the reference.
The parties otherwise disagreed on the appropriate orders. That leaves in issue: 1. the terms for the referral; and 2. the basis for an award of interest on the judgment.
In addition, Metropolitan wishes to bring an application for further security for costs and proposes a timetable to adjudicate such application. C&V contests that timetable.

Terms for referral

There is substantial agreement on the terms of referral. The identity of the referee has not yet been settled, but a mechanism is put in place to resolve this question if there is dispute about who should be the referee. There are only two issues which are contention, and they are minor in the scheme of things.
The first issue concerns the questions for the referee. The parties are in dispute whether the questions for the referee regarding component sums charged by the plaintiff for Building B are "justified and reasonable" (as Metropolitan would prefer) or simply "reasonable" (as C&V would prefer). There may or may not ultimately be any substantial difference between either formulation, but the Court would be assisted in the referee's views on the more expansive basis formulated by Metropolitan.
The second issue concerns materials for the referee. C&V wishes to include all of Mr Pizzolato's affidavits (with the exhibits) served in the proceeding. Metropolitan wishes to confine the material only to his first affidavit. For its part, C&V wishes to exclude, from the referee's purview, BKK Engineering Tax Invoices (Exhibit 2) which Metropolitan wishes to place before the referee. Again, within reason, the Court would be assisted by the material which the parties genuinely consider he or she should have regard to in the reference. That inclines the Court to include all of Mr Pizzolato's affidavits and the BKK Engineering Tax Invoices within the bundle of material to be furnished.

Interest

It appears to be common ground that the quantum of the claim for interest will be affected by the reference. The parties now seek a determination as to the basis upon which such claim should be calculated: the contractual rate, or the rate prescribed by ss 100-101 of the Civil Procedure Act 2005 (NSW), and which are applicable to awards in this Court (Practice Note DC (Civil) 15).
C&V contends that it follows from the Court's acceptance that its Terms and Conditions were part of the contract for Building B that the contractual rate in cl 7 should apply. Possibly in anticipation of a submission by Metropolitan that the amount of the rate was penal, C&V points to several authorities, including Bhundia v Sommers (No.4) [2021] NSWSC 455, where the default rate of 30% per annum was applied.
Metropolitan disputes that the Court made any finding that Metropolitan accepted the interest rate, even though it accepts that the Court found that the labour rates in the terms and conditions had been accepted. Secondly, a precondition to the charging of the contractual rate was the "customer" (Metropolitan) having entered into a 'credit agreement' with C&V; and C&V admitted that no such credit agreement existed. Thirdly, no evidence was adduced to prove the NAB overdraft rate.
Metropolitan's second submission is accepted. It is unnecessary to decide the correctness of its first and/or third submissions.
After the reference has been completed, pre-judgment interest should be calculated in accordance with the rates prescribed under the CP Act.

Orders

In summary, the Court generally adopts as correct Metropolitan's version of the short minutes, with the inclusion, within the materials to be forwarded to the referee, of the additional two affidavits of Mr Pizzolato (with exhibits) referred to in C&V's short minutes (proposed orders 8(e)-(f)).
The parties agree that the matter should be returnable to the Court for further directions after the referee has delivered the report (proposed order 16 in Metropolitan's short minutes). No return date has been agreed by the parties, which presumably is attributable to no referee having yet been appointed (and therefore no preliminary indication being received as to when the report might be issued). When the matter is before the Court for the hearing of the application for further security, the parties should be in a position to indicate what the next return date will be. In the event, however, that the dispute about any further application for security is resolved in the meantime, I will retain 1 July 2022 as a general return date for mention of the matter.
Subject to those variations, I make orders in accordance with orders 1-18 (inclusive) of Metropolitan's short minutes, an edited version (to conform to these reasons) of which is annexed to these reasons.

Annexure A Form 44 (version 3) UCPR 36.1A ORDER COURT DETAILS Court District Court of New South Wales Division Civil Registry Sydney Case number 2021/00108258 TITLE OF PROCEEDINGS Plaintiff C&V Engineering Services Pty Ltd ACN 003 275 134

Defendant Metropolitan Demolitions Pty Ltd ACN 099 769 052 PREPARATION DETAILS Prepared for Metropolitan Demolitions Pty Ltd Defendant Legal representative Mark Irwin, Vincent Young Legal representative reference MI:AW:210119 Contact name and telephone Andrew Wardan, 02 9261 5900 Contact email mark.irwin@vincentyoung.com.au TERMS OF ORDER MADE BY THE COURT BY CONSENT

Security for Costs 1. The Defendant to file a motion and affidavit in support of any application for further security for costs within 5 business days of the making of these orders. 2. The Plaintiff to serve any evidence in response within 5 business days of the Defendant serving its motion and affidavit. 3. The parties to each serve written submissions two business days prior to the hearing of the application. 4. The Defendant's application for security for costs be returnable before Abadee DCJ on 1 July 2022 at 9:30am. Referral 1. Mr Madden and Mr Sanig to produce within four weeks of these orders a joint report setting out the matters in respect of which they agree and disagree, and short reasons for the scope of their disagreement. The Joint Report to specifically address the issues referred to the referee and to take into account the affidavit of Mario Pizzolato served 2 May 2022. 2. Pursuant to rule 20.14 of the Uniform Civil Procedure Rules 2005 (NSW), the following issues are referred to a referee: 1. Were the hours charged by the Plaintiff in relation to the Building B Contract for workshop labour reasonably incurred? If not, what were the reasonable hours to be charged in accordance with the Building B Contract? 2. Is the sum charged by the Plaintiff for workshop usage costs justified and reasonable? If not, what is the reasonable sum for the Plaintiff to charge for workshop usage costs in accordance with the Building B Contract? 3. Is the sum charged by the Plaintiff for consumables justified and reasonable? If not, what is the reasonable sum for the Plaintiff to charge for consumables in accordance with the Building B Contract? 1. The referee be a quantity surveyor as agreed by the parties within 5 business days of these orders, or failing agreement, the Defendant to nominate three quantity surveyors and the Plaintiff to choose one of the three named quantity surveyors. 2. Neither party or its representatives or experts to communicate unilaterally with the any potential referee save to inquire as to the potential referee's willingness to be appointed and availability. 3. Direct that (without affecting the powers of the Court as to costs) the parties, be jointly and severally liable to the referee for the fees payable to him. 4. Direct that the parties deliver to the referee forthwith a copy of this order together with a copy of Division 3 of Part 20 of the UCPR. 5. Direct that: 1. the referee consider and implement such manner of conducting proceedings under the reference as will, without undue formality or delay, enable a just determination to be made including, if the referee thinks fit, including: 2. the making of inquiries by telephone; 3. site inspection; 4. inspection of plant and equipment; and 5. communication with experts retained on behalf of the party. 1. The referee to be provided with: 1. a copy of the reasons of Abadee DCJ dated 12 May 2022; 2. Expert Report of Michael Sanig of Turner & Townsend Pty Ltd dated 16 March 2022; 3. Expert Report of David Madden of MBMpl Pty Ltd dated 26 April 2022; 4. Affidavit of Erik Van Cooney dated 15 December 2021; 5. Affidavit of Mario Pizzolato affirmed 10 August 2021, together with exhibit MP1; 6. Affidavit of Mario Pizzolato affirmed 26 April 2022, together with exhibit MP2; 7. Affidavit of Mario Pizzolato dated 2 May 2022; and 8. BKK Engineering Tax Invoices (Exhibit 2). 1. Amendments to the Schedule, whether by agreement or on a contested basis, are to be the subject of an order made by the Court. 2. The referee to deliver a copy of his report to the Court and the parties within 28 days of appointment. 3. Grant liberty to the referee or any party to seek directions with respect to any matter arising in proceedings under the reference upon application made on 3 days' notice or such less notice ordered by the Court. 4. Stand the proceedings over for further directions on 1 July 2022 at 9:30am. Costs and fees 1. The question of costs is to be addressed following the completion of the Reference. Interest 1. The Defendant is to pay the Plaintiff interest in accordance with the Court's pre-judgment interest rate as per Practice Note 15 on any amount determined as owing finally owing to the Plaintiff.

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: 25 May 2022

Civil Procedure Act 2005(NSW)ss 100, 101

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