Ford v Greer

PARTIES : Katrina Ford (Plaintiff) Paul Roland Greeg t/as PRG Building Inspections and Appraisals 'Australia' (Defendant)

COUNSEL : E G Romaniuk (Plaintiff) M Windsor (Defendant)

SOLICITORS : Sparke Hlemore (Plaintiff) Carroll & O'Dea (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20263/2007 - KATRINA FORD v PAUL ROLAND GREER t/as PRG BUILDING INSPECTIONS AND APPRAISALS 'AUSTRALIA'

JUDGMENT (Separate determination) 1 HER HONOUR: This is a tragic case. By notice of motion filed 7 October 2008 the defendant seeks an order that the quantification of any damages payable to the plaintiff by the defendant be determined separately from and after the determination of all the other questions in the proceedings. 2 The plaintiff is Katrina Ford. The defendant is Paul Roland Greer t/as PRG Building Inspections and Appraisals 'Australia'. The plaintiff relied upon the affidavit of her solicitor Hanaan Indari dated 22 October 2008. The defendant relied on two affidavits of Dino Liistro sworn 3 October 2008 and 31 October 2008. 3 On 22 July 2006, the plaintiff fell from a balcony structure to the ground below when the balcony structure failed causing her to suffer severe personal injuries. The plaintiff is now a permanent T4 paraplegic. The plaintiff's three children also have commenced proceedings (the related proceedings) against the defendant for damages for alleged psychological injuries that they have sustained as a result of their mother's injuries.

The pleadings 4 The plaintiff pleads by amended statement of claim dated 17 October 2007, that on about 16 January 2002 the defendant performed a building inspection at her premises at Panania and provided a written building inspection report No P3922 dated 16 January 2002 (the "report"). The premises included a raised and/or suspended timber deck balcony structure (the "balcony"). The defendant inspected the balcony structure and referred to and/or commented upon that balcony structure in its report. The report was not made for or at the request of the plaintiff. The plaintiff did not become an owner of the premises until about July 2005. The plaintiff says that by reason of the comments in the report regarding the balcony the owners believed the balcony to be sound and safe and not in need of any work to render it a sound and safe structure. On 22 July 2006, the balcony failed and the plaintiff fell and suffered serious injury. 5 The plaintiff sues the defendant in negligence and alleges that he failed to advise, inform and warn the owners and/or the plaintiff that firstly, the balcony was not safe and secure; secondly, as the material used to construct the balcony were of a particular class or quality, the balcony would not be safe and secure with the passage of time; thirdly, as the materials used to construct the balcony were of a particular class or quality, the balcony was not safe and secure at the time the report was prepared; fourthly, the balcony was not constructed in a manner which was safe and secure; and fifthly, the timber used in construction of the balcony was not safe for external use. 6 The plaintiff pleads that the report did not contain any advice, information, or warning concerning the balcony, nor was there any oral advice, information, or warning given. As a result, the owners of the premises did not perform, or did not cause to be performed, any works to the balcony structure as they were of the belief that the balcony was sound and safe. The plaintiff pleads that there was misleading and deceptive conduct by the defendant and as a result of the defendant's misleading and deceptive conduct pursuant to s 42 of the Fair Trading Act 1987, she seeks damages. She says that the defendant represented in the report that the balcony was safe and secure, when it was not.

The defence 7 By defence filed 10 January 2008, the defendant denies firstly, that he owed a common law duty of care to the plaintiff; and secondly, denies that he breached any common law duty. The defendant says that it should be noted that whilst the report described the balcony as of generally sound and serviceable condition at the time of inspection, it stated moisture decayed timber decking boards may require eventual replacement. He says that the report explicitly identified the scope and limitation, namely that the report was not "an all encompassing report dealing with the building from every aspect" but a reasonable attempt to identify any obvious or significant defects apparent at the time of inspection. 8 The defendant further says that the report was not a certificate of compliance, that it was not a structural report, but rather the report was based on a visual inspection, which did not involve the defendant breaking apart, dismantling, removing or moving objects or digging, gouging, forcing or performing invasive procedures. The report did not involve destructive probing; and it did not comment on defects that may be the subject of prevailing weather conditions, pest, health and safety issues; and was not a special purpose property report. The report also specifically disclaimed liability due to the failure of the report to notify any problems in any areas or sections of the premises that were physically inaccessible. 9 The defendant's report was prepared for the use and benefit of Carol Lowe, Matthew Lowe and Angela Robyn Lowe, not the plaintiff. The defendant says that he did not accept liability or responsibility to any other party who relied on the report and that any other party who did rely on the report did so at their own risk.

The plaintiff's version of events 10 Relevantly, the plaintiff in her statement (filed 26 February 2008), gives her account as to her knowledge of the condition of the balcony and how the fall occurred. It is as follows. 11 In about July 2004, a few months after the plaintiff and her partner Matthew Lowe had commenced their relationship, she and her three children moved into the premises. Before she and Mr Lowe moved in together, Mr Lowe had been living at the premises with a friend. At the time the plaintiff moved in with Mr Lowe, she understood that Mr Lowe was a part owner of the premises with his sister and mother and that they owned the house together in equal shares. The plaintiff did not have an interest in the house at that time. 12 In July 2005, the plaintiff and Mr Lowe married. After their marriage, they obtained some refinancing, and bought out Mr Lowe's mother and sister and became the owners of the premises together. During the time the plaintiff was living at the premises, there were no structural renovations done at all. The only work that was done was ripping up some carpet, taking wood panelling off the walls and other non-structural cosmetic renovations. All the structural aspects, including the balcony, stayed the same the entire time the plaintiff was living at the premises. 13 The plaintiff stated that she never made any detailed inspection of the structural elements of the premises and she felt she had no reason to nor qualified to do so. At the times when the family had used the balcony, the plaintiff did not see anything about the balcony or railing that caused her concern about its safety and strength.

Day of the accident 14 On Saturday 22 July 2006, the day of the accident, the plaintiff and Mr Lowe had been at work until around 3.00 pm and at around 3.30 pm the plaintiff and her husband were out on the balcony. 15 The plaintiff was sitting on a fold out camping chair on the balcony which overlooked the backyard. The plaintiff remembers that her husband was having a beer but she was not drinking anything and had not consumed any alcohol during the day. The plaintiff was sitting on the left of the balcony and her husband was to her right, facing her. The plaintiff says that she got up from her chair and started talking about the renovations they were thinking of doing to the backyard. The plaintiff walked around to her husband's right and was talking about some things they wanted to do at the side of the house and gesturing in that direction. As she was doing this, she put her hand on the side of balustrade of the balcony. 16 The plaintiff says that she did not lean heavily on the balustrade but had her hand resting on it for support while gesturing with the other hand. The plaintiff says that she would have had some pressure on the balustrade but not her full weight. She then saw the front part of the balustrade pull out from the rest of the structure at the front right hand corner. As that happened the side railing she was resting her hand on leaned out, the plaintiff lost her balance and fell with it to the ground. 17 The plaintiff's husband Mr Lowe says that she basically landed on her head. She remained conscious after the accident and was taken to Liverpool Hospital where investigations revealed the major injuries of factures T5, C6 and C7 vertebrae, and factures of the skull. The defendant has not been ordered to file his statement in relation to his inspection of the balcony, but I have reproduced his report below.

The report 18 The report reads as follows: ______________________________________________________________ BUILDING INSPECTION REPORT Complies with Australian Standard As 4349 1 Property Inspections

Report to: Carol Gwendoline Lowe, Matthew James Lowe, Angela Robyn Lowe Xx XXXXX XXXX Panania, NSW 2213

Solicitor: Greg Byles G Byles and Associates, Liverpool

Telephone: xxxx xxxx Fax xxxx xxxx ______________________________________________________________ Purchaser: Carol Gwendoline Lowe, Matthew James Lowe, Angela Robyn Lowe

Re: Structure at: XX XXXXX XXXX Panania Report No P3922 Date of inspection: 16th January 2002 D.F.T. Licence No R94759 ______________________________________________________________ IMPORTANT INFORMATION REGARDING THE SCOPE AND LIMITATIONS OF THE INSPECTION AND THIS REPORT 1. This report is not an all encompassing report dealing with the building from every aspect. It is a reasonable attempt to identify any obvious or significant defects apparent at the time of the inspection. Whether or not a defect is considered significant or not depends, to a large extent, upon the age and type of the building inspected. This report is not a certificate of Compliance with the requirements of any Act, Regulation, Ordinance or By-Laws. It is not a structural report, should you require any advice of a structural nature you should contact a structural engineer. 2. This report is confined to visual inspection only limited to those areas and sections of the property fully accessible to the inspector on the date of the inspection. The inspection did not include breaking apart, dismantling, removing or moving objects including, but not limited to foliage, moulding, roof insulation, floor or wall coverings, sidings, ceilings, floors, roofing, behind stored goods in cupboards, other areas that are concealed or obstructed. The inspector did not dig, gouge, force or perform any other invasive procedures. Visible timbers cannot be destructively probed or hit without the written permission of the property owner. 3. This report does not and cannot make comment upon, defects that may have been concealed the assessment or detection of defects (including rising damp and leaks) which may be subject to prevailing weather conditions, the presence or absence of timber pest, gas fittings, common property areas, environmental concerns, the proximity of the property to flights paths, railways or busy traffic, noise levels, health and safety issues, security concerns, sile drainage (apart from surface water drainage), swimming pool and spas (non-structural), detection or identification of illegal building work, in trade areas exposed finishes, document analysis, electrical installations, any matters that are solely regulated by statute, areas or items that could not be inspected by the consultant (NB such matters MAY upon request be covered under the terms of Special-purpose Property Report). 4. In the event of any controversy or claim arising out of, or relating to this report, it will be settled by arbitration in accordance with the rules of the Institute of Arbitrators Australia. Any judgements from such arbitration shall be binding upon both parties." _____________________________________________________________ 19 The report referred to the upstairs living/rumpus room. Alongside the heading "Doors", it reads: "A aluminium sliding door appears to be in a serviceable condition and provides access to a raised/suspended timber deck balcony structure with welded metal and timber handrails and balustrade fixtures, all of which appear to be generally in a sound and serviceable condition however various moisture decayed timber decking boards may require eventual replacement overtime."

Determination of separate question 20 Rule 28.2 of the Uniform Civil Procedure Rules states: "28.2 Order for decision The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings." 21 There are a number of authorities on this topic which include Tepko Pty Limited v Water Board (2001) 206 CLR 1; Perre v Apand Pty Limited (1999) 198 CLR 180 at [436]; State of New South Wales v Lepore (2003) 212 CLR 511 at [187]; Dunstan v Simmie Co Pty Ltd [1978] VR 669 at 671.30; and per Rolfe J in ABB Engineering Construction Pty Limited v Freight Rail Corp [1999] NSWSC 1037. In Idoport Pty Limited v National Bank Ltd [2000] NSWSC 1215, Einstein J at [7]-[8] helpfully provides a compendium of cases upon this topic, which I need not reproduce here. 22 In Tepko v Water Board, Kirby and Callinan JJ cautioned against the severing of issues by the court. Their Honours stated (at [168] - [171]): "…we should not leave this case without making four comments. Both Mason P and Fitzgerald JA were critical of the course of limiting the issues to be tried that the primary judge adopted. In Perre v Apand Pty Ltd attention was drawn to difficulties that can be caused when that course is adopted. In light of the experience in this case, what was there said should be restated with emphasis. The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests. Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question.

The fourth of our comments is related to evidence compiled, committed to writing and filed in advance of the hearing. Parties frequently, either together or separately, compile "books of documents". Although most of these have the potential to be admitted in evidence, often they are defective in form. Many of them are often irrelevant, or their significance is either not recognised or adverted to during the hearing. Their status, as in the case of the letter written by Mr Rhodes, can be ambiguous. Discrimination and economy should be exercised by those who prepare cases in which documentary evidence is likely to be extensive and important. Those who conduct such cases should ensure that what is actually in evidence, and its relevance and significance, are clearly identified." [Footnotes omitted] 23 In Pioneer Park Pty Limited v ANZ Banking Group Limited [2005] NSWSC 832 (cited in Admiral I Pty Ltd v Leighton Contractors Pty Ltd [2005] NSWSC 1105 at [19] per Barrett J), Einstein J rejected an application for separation of liability and quantum. His Honour (at [7]) stated that "far and away the most significant factor" was the fact that the evidence of a plaintiff was likely to be critical both as to liability and as to damages/quantum in a number of ways. Additionally, expert evidence, which both parties anticipated putting on in relation to liability, was also material to any assessment of loss or damage. His Honour (at [8]) noted: "It is envisaged that the same experts would be used relating to those issues both as to liability and as to quantum. Certainly, the same or very similar expertise is required and there is obviously a substantial overlap in the … [material] … the experts will need to review for the purpose of addressing the liability issues on the one hand, and the quantification issues on the other. It is obviously illogical and inefficient for the experts to engage in that exercise on two different occasions." 24 Since these decisions were handed down the Local, District and Supreme Courts in New South Wales have been affected by the Civil Procedure Act 2005. Sections 56 to 62 are relevant. 25 Sections 56, 57 and 60 of the Civil Procedure Act relevantly provide: "56 Overriding purpose

(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.

(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings,

(b) the efficient disposal of the business of the court,

(c) the efficient use of available judicial and administrative resources,

(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

60 Proportionality of costs In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute." 26 In Integral Home Loans Pty Ltd & Anor v Interstar Wholesale Finance Pty Ltd & Anor [2006] NSWSC 1464, Brereton J (at [6]) stated: "While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously."

See also Tyrrell v The Owners Corporation Strata Scheme 40022 [2007] NSWCA 8.

Separate determination 27 The defendant submitted that the utility, economy and fairness to the parties warrant a trial of the separate issues of liability. The defendant denies that there is a claim for common law duty owed by him where he was the author of a property pre-purchase inspection report, to a person who neither commissioned, owned or occupied the property the subject of the report. 28 The defendant says that this is not a case where savings of time and expense are illusory. The defendant estimates the hearing time of a separate trial at six days, the plaintiff estimates four days. If it is to be assumed that an order was made pursuant to Practice Note cl 7, the time for the hearing of liability is likely to be even shorter than the estimate given of five days plus for liability alone with an addition eight days plus for quantum. 29 The plaintiff relies on expert evidence for her claim for damages. She has obtained reports in relation to spinal surgery, neuropsychology, rehabilitation medicine, occupational therapy, urology, architecture, quantity surveying, a building consultant and motor vehicle assessment needs. The parties have served five reports on the issue of liability. The defendant has obtained a report of Associate Professor Jones and a urologist, but these reports have not been served. The defendant is yet to obtain evidence relating to psychological symptoms, ongoing need for medical treatment, attendant care needs, gratuitous care needs, residential requirements, including building construction and/or medication and transport needs. The plaintiff's urological state has not yet stabilised. 30 The defendant has not yet had the three children assessed. The defendant submitted that if the matter was to proceed to hearing on all issues it would be required to expend significant costs in qualifying experts in at least six specialist fields and in the case of the children's claims, at least three experts. But to my mind a more important factor is that if the plaintiff's claim in so far as liability is concerned is unsuccessful, the plaintiff's children may be relieved of having to be seen by psychologists for the purpose of the preparation of medico legal reports. However, the plaintiff has already obtained her own medico legal reports, the costs of which are substantial. 31 The defendant submitted that it would be illogical and inefficient if the experts had to provide reports in relation to both quantum and liability, and to have a separate determination in such circumstances. The defendant says that this is not a case where there is an overlap of evidence to be given by expert witnesses and that the only common witness in a hearing of liability and quantum would be the plaintiff. The defendant also states that liability issues are separate and discrete from those of quantum. In my view, there will be an overlap of witnesses, namely the plaintiff and her husband. 32 The defendant further submitted that a hearing of all issues would require a disproportionate use of resources. If this case were to proceed to hearing on all issues the defendant would unnecessarily incur the disbursements and costs of engaging experts to comment on issues, which may ultimately have no relevance to the outcome. The defendant says that the primary focus in this case remains on the liability issues. I accept that if liability is determined separately, the defendant may save expenditure in obtaining medical reports in numerous specialities. 33 The plaintiff's counsel submitted that credit will be in issue and this significant factor militates against the granting of a separate trial. However, there does not seem to be any significant factual dispute as to the manner in which the accident occurred, nor that as a result of the fall, the plaintiff became a paraplegic. What does seem to be the main issue in dispute is essentially a legal one. That is, is the plaintiff entitled to rely upon a report to which she was not a party, or did the defendant owe a duty of care to prospective purchasers particularly in the light of the stipulated scope and limitations of the inspection of the report. If that were the scope of the separate determination, it would have been suitable for separate determination. However, that is not the case because the plaintiff has also pleaded a breach of s 42 of the Fair Trading Act. 34 So far as s 42 is concerned, the plaintiff will need to establish firstly, conduct on the part of Mr Greer; secondly, conduct that is misleading or deceptive; thirdly, that there was reliance on the conduct; and fourthly, loss or damage caused by the conduct - see Ronald Wallace Gould v Peter Vaggelas (1984) 157 CLR 215 and Jebeli v Modir and Golyaei [2005] NSWCA 184. There will be a different chain of enquiry albeit mainly of the defendant. 35 The plaintiff is a solicitor. She would understand that the determination of liability first does not mean that an abbreviated course was adopted and the decision was reached in the courts rather than the parties' interest. 36 If the plaintiff is unsuccessful in relation to liability, I accept that there may be an additional appeal. However, if the plaintiff is successful on liability the damages component of the claim may then be the subject of a settlement conference. It may be that the parties do not reach an overall settlement, they could agree upon various heads of damage. However, the parties have already been ordered to undergo mediation in relation to all issues. 37 The separate determination as currently framed, in the notice of motion, is that "the quantification of any damages payable to the plaintiff by the defendant be determined separately from and after the determination of all the other questions in the proceedings". This separate determination would include the determination of causation. The Court would be required to determine whether certain injuries and disabilities were caused by the fall. This depends on medical opinion and the defendant will be obliged to obtain and serve medical reports for this separate determination. To embark on this enquiry defeats the purpose of leaving only quantum for determination, and leads me to conclude that there will not be substantial savings of time and expense, particularly as the plaintiff has already obtained her medico-legal reports. 38 In my view there is no bright line that distinguishes between the separate determination and the rest of the matters in dispute. In the end, I do not accede to the order sought by the defendant. There should not be an order made that the quantification of any damages payable to the plaintiff by the defendant be determined separately from and after the determination of all the other questions in the proceedings. The defendant's notice of motion filed 7 October 2008 is dismissed. 39 Costs follow the event. The defendant is to pay the plaintiff's costs as agreed or assessed.

(1) The defendant's notice of motion filed 7 October 2008 is dismissed.

(2) The defendant is to pay the plaintiff's costs as agreed or assessed. ***********

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