Icon Co (NSW) Pty Ltd v The Owners - Strata Plan No. 97315

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment (EX TEMPORE) (REVISED 22 june 2022)

1. BRERETON JA: On 5 April 2022, Black J sitting in the Technology and Construction List in the Equity Division heard and determined as a preliminary question, under Evidence Act 1995 (NSW), s 192A, the question of the admissibility of certain parts of an expert report of one Mr Driscoll, sought to be tendered by the defendant in proceedings which, together with two other sets of proceedings, are set down for hearing for some eight weeks commencing next Monday, 2 May 2022. The paradigm was set out by his Honour in paragraph 2 of the judgment taken from paragraph 1.11 of Mr Driscoll's report, which asserted: "Based on the information provided to me, the increase [in premiums paid or payable by the Owners Corporation] was mainly contributed to by the failure of the Owners Corporation or its insurance brokers to take proper steps in arranging the insurance coverage". The parties agreed that the other paragraphs in the report to which objection was taken would survive or fall according to the ruling made on that paragraph. Ultimately, his Honour held that the paragraph was inadmissible, for reasons which culminated as follows: "…[I]t seems to me that there would be a fundamental denial of procedural fairness to the Owners Corporation if the case were permitted to expand, by expert evidence, beyond the case that was raised by Icon, in its Technology and Construction List Response, and in a way that would potentially shut the Owners Corporation from taking steps that it says it would have taken including joinder of other parties, had an amendment been sought and permitted. For these reasons, I reject that part of the paragraph to which objection is made. The same result would follow for all other evidence addressing the same matters, unless there is some other basis identified, in respect of any particular paragraph or sentence, which would support the admission of that evidence."
2. The defendant below, Icon Co (NSW) Pty Ltd, applies for leave to appeal from his Honour's ruling. By the proposed appeal, it would seek to agitate two questions which it characterises as follows: first, did the primary judge err in ruling the "Driscoll inadmissible evidence" irrelevant and therefore inadmissible; and secondly and anterior to that, did the primary judge err in the discretionary decision to embark on the s 192A admissibility inquiry, and particularly on the basis of relevance.
3. It has often been said that to warrant a grant of leave to appeal it is generally required that there be identified an issue of principle, a question of public importance, or a reasonably clear injustice going beyond something that is merely arguable: see, for example, Jaycar Pty Ltd v Lombardo; [1] BE Financial Pty Ltd v Das; [2] The Age Company Limited v Liu; [3] Secretary, Department of Family and Community Services v Smith; [4] and Choi v University of Technology Sydney (No 2). [5] For my part, as illustrated in my albeit dissenting judgment in Marlin Brands Australia Ltd v Brando Aus Holdco Pty Ltd, [6] where the resolution of a question anterior to trial may have a significant impact on the conduct of the trial, and in particular may result in a trial proceeding on a correct footing, rather than on a footing liable to be disturbed on appeal post-trial as incorrect, there is much to be said for a grant of leave to appeal, at least if a seriously arguable case of error is shown.
4. So far as the applicant seeks to agitate that there was error in the primary judge's decision to embark on the question of the admissibility of the disputed evidence pre-trial under Evidence Act, s 192A, that involves impugning a discretionary decision of a trial judge in a matter of practice and procedure. That there are arguments against, as well as in favour of, pre-trial rulings on a question of admissibility has been identified, for example, by Gaudron J in TKWJ v The Queen. [7] However, no failure by his Honour to have regard to any relevant consideration, no taking into account of any irrelevant consideration, no error of principle, nor any other discretionary error of the type referred to in House v The King, [8] has even arguably been identified. In my view, there are no prospects of an appeal against his Honour's decision to embark on an inquiry and make a ruling under s 192A succeeding.
5. The real issue is whether there is a seriously arguable case of error so far as concerns his Honour's ultimate determination that the disputed evidence was inadmissible on grounds of relevance.
6. In the Technology List Statement, the plaintiff below pleaded that, as a result of the breaches of the statutory warranties of which it complained, "the plaintiff has suffered and stands to suffer loss and/or damage", including but not limited to: "Costs, losses, and liabilities incurred and to be incurred as a consequence of the breach, including without limitation ... increased insurance premiums." The List Statement did not further elaborate the causative link.
7. The List Response filed by the defendant in answer to that allegation first denied it, and insofar as concerns the question of insurance premiums, added: "The Owners Corporation has not pleaded: (A) when the alleged loss in the form of increased insurance premium was allegedly suffered, the quantum of such loss, and the circumstances in which it is alleged to have been suffered; and (B) how this alleged loss is said to be causally linked to one or other alleged breaches of the statutory warranties by Icon."
8. The pleading added: "[Icon] says further that insofar as the Owners Corporation is claiming a loss in the form of increased insurance premia, the Owners Corporation did not take reasonable steps to mitigate any loss that it may have suffered in this regard."
9. Notwithstanding the gratuitous observations about what the Owners Corporation had not pleaded, no application was made to strike out the pleading in the List Statement as insufficiently pleading the question of causation, nor, so far as has been able to be ascertained, was any request made for further and better particulars in that behalf.
10. The question of causation of that loss came to be further elaborated when the plaintiff served an expert report, called the "Parisi report", in September 2021. To oversimplify the substance of that report, it was to the effect that the type of insurance cover available, and therefore the cost of that cover, was constrained because of the defects which the property in question had experienced, which were said to constitute the breach.
11. The question of the relevance of the evidence to support the case of failure to mitigate pleaded in paragraph 17(i) of the List Response was raised before the primary judge, [9] but no issue was taken before us with the manner in which his Honour disposed of that argument. Otherwise, the issue turned on whether it was admissible as responsive evidence to the allegation of causation. His Honour held it was not, in substance because it was not relevant on the pleadings as they stood.
12. His Honour was well aware that in the Construction List, as in the Commercial List, the List Statement and List Response are not pleadings in the strict sense, and that a pragmatic view must be taken of the case as it develops through the List Statement, the List Response, and the evidence as it is served. But as I understand his Honour's judgment, it was to the effect that if the defendants wished to contend that the increase in insurance premiums was attributable not to the breaches, but to a want of due care or skill or attention on the part of the Owners Corporation or its brokers, then that was an allegation liable to take the Owners Corporation by surprise which ought to have been pleaded, analogous to a defence of contributory negligence which ought to have been pleaded, or to an allegation of novus actus interveniens which ought to have been pleaded. I am unable to discern any error in his Honour's conclusion to that effect.
13. The effect of his Honour's ruling is to foreclose the adducing of evidence that failure to obtain less costly insurance was attributable to the fault of the Owners Corporation and its brokers. It does not foreclose the adducing of evidence that contradicts the Owners Corporation's evidence that it was attributable to the breaches. That is the distinction I understand his Honour to make at paragraph 7 of the judgment, where his Honour says that the applicant remains entitled, "to lead evidence that those steps were not taken, or that they do not prove a link between the alleged breaches and the loss claimed", but not "to raise an affirmative claim that other parties were responsible for the claimed loss based on unidentified facts, without pleading it, or giving an opportunity for procedural fairness in respect of it."
14. I am unable to accept that this is a case which could not have been raised before service of the Parisi report in September 2021. Had the applicant wished to elucidate the case it had to meet, then it was open to it to request further particulars of the List Statement. Moreover, although it was put in terms that the issue arose only in September 2021 (when the Parisi report was served), it might equally (when one bears in mind that the Driscoll report was served on 4 March 2022) be put in terms that it had arisen at least as long ago as September 2021.
15. For those reasons, in my judgment there is an insufficiently arguable case of error in his Honour's ruling, on the pleadings as they stand and on the case as a whole as it stands, in rejecting the Driscoll inadmissible evidence as inadmissible. But I observe that his Honour reserved the question that it might be otherwise if the pleadings were amended, and did not foreclose an application for leave to amend the pleadings. Likewise, the making of the ruling under s 192A does not preclude the parties from revisiting the admissibility of the disputed evidence, if the course of the trial so warrants it.
16. On the view to which I have come, it is unnecessary to decide the jurisdictional point as to whether a decision under s 192A to exclude evidence is an appealable interlocutory judgment or order as to which Aon Risk Services Australia Ltd v Australian National University, [10] and the authorities discussed in it, including Rich v ASIC, [11] apply.
17. For those reasons, in my opinion leave to appeal should be refused with costs.
18. KIRK JA: I agree with the orders proposed by Brereton JA and with his reasons and would add just two comments. The first, as Brereton JA has noted, is that no issue arises on this application as to any issue of amendment, nor does any issue arise on this application as to the limits of cross-examination or the like that might arise in the course of the trial.
19. Secondly, the applicant has argued that there is some dispute in the case law as to whether or not a ruling on the admissibility of evidence is something capable of being the subject of an interlocutory appeal under s 101 of the Supreme Court Act. This case is not an appropriate vehicle to determine any such question in light of the issues and circumstances outlined by Brereton JA in his judgment.
20. BRERETON JA: The orders of the Court therefore are that the application for leave to appeal be dismissed with costs.

Endnotes

1. [2011] NSWCA 284 at [46] (Campbell JA; Young and Meagher JJA agreeing).
2. [2012] NSWCA 164 at [32]-[38] (Basten JA; Tobias AJA agreeing).
3. (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13] (Bathurst CJ; Beazley and McColl JJA agreeing).
4. (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] (Gleeson JA; Macfarlan and Payne JJA agreeing).
5. [2020] NSWCA 342 at [40] (Bell P, as his Honour then was; Emmett AJA).
6. [2022] NSWCA 59 at [51] onwards (Brereton JA, dissenting).
7. (2002) 212 CLR 124; [2002] HCA 46 at [43] (Gaudron J).
8. (1936) 55 CLR 499; [1936] HCA 40.
9. See Primary judgment at [11].
10. (2010) 244 FLR 440; [2010] ACTCA 28.
11. [2005] NSWCA 233; 54 ACSR 36. 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: 01 July 2022