Chemtieh v Atieler Hazzouri Architects Pty Ltd ACN 095725072 and CDC Certifiers Pty Ltd ACN 609740285

District Court of NSW|2024-12-17|Before: Adam P

The Application to allow the service of further expert reports as to liability and quantum

The plaintiff's argument

The plaintiff has served the defendants with a report of Mr Dowse (referred to by Ms Hawkins as Mr Prowse). The report is not before me, but I understand that it anticipates the future preparation of a further report by Mr Dowse. The plaintiff seeks to have the orders of 19 April 2024 set aside and permission given to the plaintiff to file the existing report of Mr Dowse. The plaintiff further seeks a timetable to be set, allowing further time for a further report of Mr Dowse to be prepared and served, and for a report of an accountant with respect to quantum to be prepared and served, and to give the defendant time to produce and serve reports in response.
The plaintiff concedes that an expert report which has not been served in accordance with rule 31.28 is not admissible unless there are exceptional circumstances that warrant the granting of the leave. The plaintiff argued, however, that rule 31.28 is not applicable to an application for the setting aside of a guillotine order to give further time for the service of an expert report.
The plaintiff's submissions referred to recent consideration of this issue by Dhanji J in Soma-Devan v Scentre Shopping Management Pty Ltd t/as Westfield Hurstville No 2 [2024] NSWSC 95 (Soma-Devan) which cited Irfan v Western Sydney Local Health District [2023] NSWSC 845 ("Irfan"), in which Harrison J, at [23], said: 23. In Addison v BHP Billiton Iron Ore Pty Limited [2019] NSWSC 1433, Cavanagh J concluded that UCPR 31.28 is not applicable in circumstances similar to the present (albeit in that case where no hearing date had been fixed). His Honour held that on proper construction, UCPR 31.28 goes to the admissibility of expert evidence, which is ultimately a matter for the trial judge. His Honour observed at [23]-[29]: (a) the purpose of UCPR 31.28 is to ensure that each party is aware of the relevant expert reports that will be relied on by the other party well before the hearing. (b) UCPR 31.28(4) applies to an application for leave under UCPR 31.28(3), which concerns admissibility of reports not served in accordance with UCPR 31.28. UCPR 31.28(4) does not concern applications for leave to serve a report contrary to the orders of the Court, nor to applications for an extension of time to serve a report late but before the hearing. (c) consequently, his Honour did not need to consider whether or not there were "exceptional circumstances" relating to late service of the report. 24. Cavanagh J's construction of UCPR 31.28 was adopted by Lonergan J in Dickson v State of NSW [2021] NSWSC 234 at [29]-[31]. Her Honour agreed with the acknowledgment by defendant's counsel that the Court has discretion to extend time for compliance with the rules under UCPR 1.12, and her Honour went on to state: In any event, to the extent that I needed to conclude that there were special circumstances, in my view the special circumstances are first that the matter is still in the case management phase, the breach and causation aspects have some complexity to them and the reports obtained include relevant information that would assist the court in understanding the issues and practicalities relevant to duty and breach and so those reports should be allowed to be deployed by the plaintiff in the proceedings.

The defendants' argument

The defendants said the following in their August submissions: 19. Rule 31.28 of the Uniform Civil Procedure Rules 2005 (NSW) addresses the service of expert evidence, relevantly: "(3) Except by leave of the court, or by consent of the parties - (a) an expert's report or hospital report is not admissible unless it has been served in accordance with this rule [. . .] (4) Leave is not to be given as referred to in subrule (3) unless the court is satisfied - (a) that there are exceptional circumstances that warrant the granting of leave, or (b) that the report concerned merely updates an earlier version of a report that has been served in accordance with subrule (1)." 20. Exceptional circumstances are those which are "unusual, special or uncommon"; they are not exceptional where there is a late retainer of an expert and the report is served late: Les & Zelda Investments Pty Limited v Whitehaven Coal Pty Limited [2024] NSWSC 1037 at [48] (Whitehaven). Leave pursuant to UCPR 31.28 remains discretionary and should be exercised with regard to the requirements of sections 56 - 58 inclusive of the Civil Procedure Act 2005 (NSW). 21. The principles in relation to an application to set aside a guillotine order were most recently set out in The Owners v Strata Plan No. 94784 v Mirvac Projects Pty Ltd [2024] NSWSC 741 (Mirvac). In Mirvac, the plaintiff consented to a guillotine order in respect of further expert liability evidence to be served by 1 March 2024. In breach of that order the plaintiff sought to serve further expert reports going to the issue of liability. Each of the experts that were engaged to provide a further report were engaged in the closing days of February 2024: Mirvac, [10]. The solicitor for the plaintiff sought to explain the delay on the basis that they arose because of: "…the issues in the proceedings; the number of experts; the time taken to instruct experts and to arrange and co-ordinate the inspection of the Property including 190 units and common property; the availability of experts; my own competing commitments." 22. Justice Stevenson rejected the explanation above as sufficient to justify dissolving or varying the guillotine order. Any such explanation must be adequate, comprehensive and candid: Mirvac, [14]. Further, even an adequate explanation may not be enough where the efforts of the plaintiff to retain an expert have not been undertaken in a timely manner: Whitehaven, [61].
The defendants summarised their argument against the setting aside of the guillotine order in their December submissions as follows: C. Lifting the guillotine order 25. The Notice of Motion seeks that the guillotine order made by Judicial Registrar Howard on 19 April 2024 be set aside. 26. The starting point is that an interlocutory order stands unless the moving party demonstrates that there is a change in circumstances, demonstrated by evidence, that render the continuation of the order unjust: Adam P Brown Male Fashions Ply Limited v Philip Morris Inc. [1981] HCA 39; (1981) 148 CLR 170. 27. More specifically, a guillotine order may be set aside where: a. The applicant provides an adequate, comprehensive and candid explanation for the failure to comply with the order: The Owners - Strata Plan No, 94784 v Mirvac Projects Pty Limited [2024] NSWSC 741, [14] per Stevenson J. b. The applicant demonstrates that its efforts to obtain the evidence have been conducted in a timely manner: Les & Zelda Investments Ply Limited v Whitehaven Coal Limited [2024] NSWSCD 1037, [60] - [61] per McGrath J. 28. The Plaintiff has not satisfied any of the general or specific requirements to lift the guillotine order and that application must be refused accordingly.
The defendants argued that no explanation has been given for the late service of Mr Dowse's existing report. Further, no explanation has been given as to why steps were not taken to brief Mr Dowse earlier and why the material which the plaintiff contemplates obtaining by way of a second report of Mr Dowse has not already been obtained. The defendants make the point that the need for the plaintiff to provide an explanation was made clear to the plaintiff in the defendants' August submissions and in the defendants' November submissions and by Judge Gibson on 15 October 2024.
The defendants argue that Mr Livers' affidavit does not contain an adequate explanation. Language difficulties are routinely overcome with the assistance of interpreters and cannot justify a delay of many months. Documents can be obtained by the use of subpoenas, among other methods.

Consideration

I accept the plaintiff's argument with respect to rule 31.28. It does not apply to the plaintiff's application to set aside the guillotine order and allow the service of further expert reports.
The plaintiff has offered no reason, beyond the plaintiff's limited ability to speak English and his personal issues, as to why the order of 19 April 2024 has not been complied with. The plaintiff's lawyer agreed to that order, some nine months after filing the Statement of Claim. Presumably, by that time, he was well aware of his client's circumstances.
There is no evidence that the plaintiff took steps to obtain documents in a timely manner. The plaintiff's solicitor, in his affidavit of 4 July 2024, recounts asking the Council and the defendants to provide him with documents in 2021, but formal steps to obtain documents seem not to have been pursued until years later, after the filing of the Statement of Claim. The plaintiff's solicitor says that he inspected the Council's file in June 2021, but found nothing "to shed light on the Plaintiffs' allegations and instructions".
No proper basis for the setting aside of the guillotine order has been provided.

Summary and conclusion

For the above reasons, the applications in the Notice of Motion must be refused.
The following order will issue: (1) The plaintiff's motion filed on 5 July 2024 is dismissed.

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: 06 February 2025

Australian Consumer Law Civil Procedure Act 2005(NSW)

First, the Sale of Goods Act 1923(NSW)

The defendants' argument

The defendants provided three sets of written submissions; the first filed on 28 August 2024 ("the August submissions"), the second filed on 12 November 2024 ("the November submissions") after receipt by Mr Berriman of the third draft and the third prepared after receipt of the fourth draft on 16 December 2024 and handed up at the hearing on 17 December 2024 ("the December submissions").
In the August submissions, the principles relevant to the application to amend the Statement of Claim are set out at paragraph 18: 18. The principles relating to the amendment of pleadings are well known. Leave is required pursuant to section 64(1)(b) of the Civil Procedure Act 2005 (NSW) (CPA), such amendments to be made to determine the real issues in the proceeding: section 64(2) of the CPA. Such decisions are to be made in accordance with the dictates of justice: section 58(1) of the CPA and the factors in section 58(2). Those factors are to be weighed in light of (a) the nature and importance of the amendments sought; (b) the extent of delay and the explanation for it; (c) the prejudice flowing from the amendment; (d) the parties' choices to date; and (e) the effect on the civil justice system - on other participants; the use of public resources; and the potential loss of confidence that arises from applications acceded to without proper explanation: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 75; [2009] HCA 27 (Aon).
The defendants pointed out that more than sixteen months had elapsed between the filing of the Statement of Claim and the service of the fourth draft.
The defendants said that Mr Livers' affidavit did not explain the delay between the filing of the Statement of Claim and the service of any of the draft amendments. The defendants said, in the August submissions, "It is unclear what has prompted the amendments, and correspondingly why they should be allowed". It was said that, in the absence of an explanation, there could be no exercise of weighing the explanation against the effects of delay and the objectives of the Rules, as required by Aon. In those circumstances, there could be no amendment.
It was argued that the fourth draft is defective to the point where it cannot be filed. This argument is set out in the December submissions. The argument is put in two parts: firstly, formal matters, and secondly, substantive matters. I will set out the argument as it was put in the December submissions: Formal matters … 10. …the Fourth PASOC appears to insert new matter without the appropriate underlining to indicate that it is in fact new, contrary to the requirements of r 19.5(2) of the Uniform Civil Procedure Rules 2005 (NSW). In particular: a. Paragraphs 26 to 36 of the Fourth PASOC appear to be new. Paragraph 26 as it appears in the Fourth PASOC is entirely different to the paragraph 26 that appears in the Statement of Claim. b. Paragraph 27 of the Statement of Claim appears to have been either deleted in its entirety or moved to paragraph 41 without the appropriate interlineation. c. The words 'Plaintiff' and 'Defendant' are not capitalised in the Statement of Claim but are capitalised in the Fourth PASOC. While not fatal, it raises a concern that there are other amendments not appropriately marked out in accordance with the Uniform Civil Procedure Rules 2005 (NSW). d. Finally, Fourth PASOC does not build upon the First or Second PASOC. For example, paragraph 26 that appears in the Second PASOC does not appear in the Fourth PASOC; and the Fourth PASOC restores paragraphs 31 to 45 whereas these had been deleted from previous versions. 11. The following sections address more substantive points by reference to the headings used in the Fourth PASOC. Narrative 12. Paragraphs 1 to 18 narrate certain events. Objection is taken to those paragraphs for the following reasons. 13. First, paragraphs 1 c and 1 d are conclusory. Each asserts that an individual is liable for the conduct of a third person; and that the conduct of those third parties was negligent without specifying the acts, the omissions or the bases on which those acts are said to be negligent. 14. Second, the particulars to paragraphs 7 and 13 do not support the pleaded implied term. In particular, particulars 7c., 7d., 18c., 18d., are elements of a duty of care in negligence and have no work to do in the context of implication of terms. Further, particulars 18f., 18g., and 18h are irrelevant to the implication of terms. 15. Third, paragraph 12 pleads that the First Defendant engages the Second Defendant on behalf of the Plaintiff. To the extent that an agency relationship is intended to be pleaded as between the Plaintiff and the First Defendant, it is incompletely pleaded. 16. Fourth, paragraph 13 does not specify whether the term is implied by law or implied in fact. The reader may infer that the term pleaded in paragraph 13 is implied in fact by contrasting the text of paragraph 13 with the text of paragraph 7 and its particulars. The corollary of that analysis is that paragraph 13 is inadequate, because it fails to plead the satisfaction of the criteria for the implication of terms as articulated in BP Refinery (Westernport) Pty Limited v Shire of Hastings (1977) 180 CLR 266, namely that a) the term must be capable of clear expression; b)not inconsistent with any express term of the parties' agreement; c) necessary to give business efficacy to the contract; d) be fair and equitable ; and e) so obvious that it goes without saying. None of these criteria are addressed, let alone satisfied. The Australian consumer law claim 17. To the extent that paragraphs 19 to 25 rely upon the report of Mr Jake Dowse dated 10 May 2024, those paragraphs impermissibly rely upon evidence served in defiance of a guillotine order made on 19 April 2024 by Judicial Registrar Howard. As the Plaintiff has not substantiated any application to lift that guillotine order by reference to the applicable authorities, the Plaintiff should not be permitted to circumvent it by particularising the report in the Fourth PASOC. Breach of s 19 of the Sale of Goods Act 1923 (NSW) 18. Paragraphs 26 to 35 should be regarded as embarrassing for three reasons: a. First, the claim for a breach of s 19 of the Sale of Goods Act 1923 (NSW) suffers from several conceptual difficulties. b. Second, the claim impermissibly rolls up the claims against the First and the Second Defendants. c. Third, the paragraphs do not plead a complete cause of action as against either Defendant. 19. First, the Sale of Goods Act 1923 (NSW) applies to agreements for the transfer of property in goods from the seller to the buyer for monetary consideration (s 6(1)). The Act defines 'goods' as including chattels personal other than things in action and money (s 5(1)). A contract, the substance of which is the execution of work or the application of skill is not a contract to which the Act applies: Brooks Robinson Ply Limited v Rothfield [1951] VLR 405; affirmed Toby Constructions Products Ply Limited v Computa Bar (Sales) Ply Limited [1983] 2 NSWLR 48. 20. On the terms of the Fourth PASOC, the Plaintiff retained the First Defendant to provide architectural services ([6]) and, inferentially, retained the Second Defendant to provide certification services ([13]). So much is apparently acknowledged in paragraph 27 of the Fourth PASOC. On the authorities referred to in paragraph 19 above, the Sale of Goods Act 1923 (NSW) applies to neither defendant, because neither has entered into a contract for the sale of goods as defined by sections 5 and 6 of the Act. 21. A further conceptual difficulty arises from paragraph 33, which alleges that s19(2) of the Act applies in respect of the Complying Development Certificate. Inferentially, this is a claim against the Second Defendant exclusively. Section 19(2) of the Act relates to sales of goods by description. The characterisation of the relevant contract as a sale by description should be expressly pleaded; it is not; and the claim is therefore incomplete. 22. Paragraphs 28 and 29 impermissibly elide the distinction between the First Defendant and the Second Defendant. That arises because a) paragraph 28 fails to distinguish between the works of each defendant; and b) paragraph 29 refers to 'the Agreement', presumably being a reference to the contractual relationship that is alleged to exist as between the Plaintiff and each of the Defendants separately; or perhaps referring to an agreement to which all three were a party. The Defendants should not be left to guess. 23. Returning to point a) made in paragraph 22 above, the Fourth PASOC does not plead a complete cause of action as against either Defendant as it does not specify the relevant defect in the services provided to support a finding of a breach of either the conditions implied by s 19(1) or s 19(2) of the Act. More specifically: a. paragraph 28 refers to the "advice, architectural plans, information" presumably being the services provided by the First Defendant. However, no defect is pleaded sufficient to establish a breach of the statutory conditions. b. paragraph 30 pleads that the Complying Development Certificate is not fit for the "Intended Purpose" a term left undefined. None of the particulars assist to understand the "Intended Purpose". The particularisation of paragraphs 7 to 9 is especially unhelpful as they plead allegations against the First Defendant only. c. paragraph 34 of the Fourth PASOC fails to specify the particular "matters" (that being the term used) that comprise the First Defendant's breach of either or both of the implied conditions. A claim in negligence 24. Paragraph 39 to 41 plead a rolled-up claim in negligence against the First and Second Defendants. Shortly put those paragraphs are embarrassing because they are conclusory; and conflate the cases as against each of the Defendants. For completeness, paragraph 40 suffers from the further defect that it makes unparticularised allegations of actual and constructive knowledge against each Defendant.

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