Chemtieh v Atieler Hazzouri Architects Pty Ltd ACN 095725072 and CDC... [2025] NSWDC 2 | Case summary

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.

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

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