Strata Plan 39743 v Linknarf Management Services; Alan J Crowley v Linknarf Managements Services

2008/289500 Strata Plan 39743 (Plaintiff) Linknarf Management Services Pty Ltd (First Defendant) Interfrank Group Holdings Pty Ltd (Second Defendant) McAlpine Hussman Pty Ltd (Third Defendant) PARTIES : 2008/289501 Alan J Crowley (Plaintiff) Linknarf Management Services Pty Ltd (First Defendant) Interfrank Group Holdings Pty Ltd (Second Defendant) McAlpine Hussman Pty Ltd (Third Defendant)

COUNSEL : GR Waugh (Plaintiffs) D Talintyre (Third Defendant)

SOLICITORS : McCulloch & Buggy (Plaintiffs Lee & Lyons (Third Defendant)

LOWER COURT FILE NUMBER(S) : 2008/289500 2008/289501

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2008/289500 STRATA PLAN 39743 v LINKNARF MANAGEMENT SERVICES PTY LTD & 2 ORS 2008/289501 ALAN J CROWLEY v LINKNARF MANAGEMENT SERVICES PTY LTD & 2 ORS

JUDGMENT (Review Registrar's decision - interrogatories) 1 HER HONOUR: By notices of motion filed 24 August 2009, the plaintiffs in both proceedings seek an order that the orders made by Registrar Bradford on 27 July 2009 be set aside and in lieu thereof orders be made that within 21 days the third defendant answer interrogatories. 2 The plaintiff in proceedings No. 2008/289500 is Strata Plan 39743. The plaintiff in proceedings No. 2008/289501 is Alan J Crowley ("the plaintiffs"). Respectively, the first, second and third defendants in both sets of proceedings are Linknarf Management Services Pty Ltd, Interfrank Group Holdings Pty Ltd and McAlpine Hussman Pty Ltd ("the defendants"). The plaintiffs relied on the affidavit of Daniel Stiles affirmed 9 July 2009. 3 On 27 July 2009, Registrar Bradford dismissed both motions. It was his view that interrogatories were not necessary for the fair disposition of the matters. The second defendant consented to and has answered interrogatories. The plaintiffs have declined to make these available to the third defendant. 4 The statements of claim in both proceedings seek similar relief. The plaintiffs both claim damages suffered from the same fire, which occurred on 2 September 2002 in strata premises located at Singleton. The interrogatories sought in both matters are very similar. 5 The first and second defendants were occupiers of Lot 11 in Strata Plan 39743 where the fire broke out. The fire broke out in a refrigerator in the "Franklins" store at Singleton. The plaintiffs have pleaded that the defendants were negligent. 6 The third defendant says that there were three different types of refrigerators in the shop that contained chicken meat. They are firstly, a refrigerator unit immediately to the front of the meat preparation area, manned by staff which contained deli meat, and (separately) loose chicken, for purchase by weight; secondly, to the right hand side, there are further refrigerators which included a chicken refrigerator which contained packaged chicken products - this refrigerator was self serve; and finally, on the other side of the shop (not visible in the photograph) there are another bank of freezers which contained frozen chickens. 7 On 11 June 2009, the third defendant's solicitors advised the plaintiffs' solicitors that their client does not have the detailed records or the knowledge to answer the proposed interrogatories.

Review 8 Rule 49.19 of the Uniform Civil Procedure Rules 2005 provides: "49.19 Review of registrar's directions, certificates, orders, decisions and other acts If in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit." 9 Relevantly, in Tomko v Palasty (No 2) [2007] NSWCA 369 Hodgson JA (with whom Ipp JA agreed) stated (at [6]-[11]): "6 I agree that a review of a decision of a registrar is not an appeal, subject to s 75A of the Supreme Court Act; and that in such a review a court must exercise its own discretion.

7 In my opinion, this discretion extends to a discretion as to whether, and if so how, to intervene; and in my opinion, there is an onus on a person seeking to have a court set aside or vary a registrar's decision to make out a case that the court, in the interests of justice, should exercise its discretion to do so.

8 In the case of a decision on practice or procedure, this will normally require at least demonstration of an error of law, or a House v The King error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one." 10 Since the Registrar made his decision, the third defendant has filed an amended defence in which it now admits that it had previously serviced refrigerators at the subject premises but says there is more than one "chicken refrigerator" and the plaintiff has failed to particularise in the statement of claim which refrigerator is pleaded. However, the refrigerator where the fire broke out has been identified by the plaintiffs on a map attached to the interrogatories. The third defendant further says that its servicing of refrigerators at the subject premises did not include any work on any junction boxes forming part of the refrigerator(s) or at all. 11 The third defendant's documents that were produced on subpoena and letter from W B Whiteford & Co (NSW) Pty Ltd were tendered in evidence (Ex A and B respectively) at this hearing. These documents were not before the Registrar. 12 The plaintiff has obtained three expert reports for the purposes of this application. They can be summarised as follows:

(1) The report of TC Forensic Pty Ltd dated 17 October 2002. It concludes that the finding of arc damage on a connector indicates the fire originated from the junction box underneath the chicken refrigerator. The exact reason for the fault, which caused the fire in the junction box, could not be determined. This court's attention was drawn to the passage where the author stated that he spoke to Mr McLean of Newcastle Police Crime Scene Unit who in turn reported that he spoke to some of the staff from Franklins who informed him that there had been problems with this refrigerator approximately six months ago and repairs were then made by the third defendant. This evidence is of little relevance considering the third defendant has admitted servicing the refrigerator.

(2) The report of JM & JA Gardner consulting engineers dated 26 October 2002 canvassed three alternative possibilities for the cause of the fire. They are: 1 A loose connection, which could have allowed one of the wires to contact one of the others. - This would normally be expected to occur a relatively short time after any work on the junction box was carried out. It could not be confirmed if recent work was carried out. 2 A loose connection causing localised heating and melting of the insulation. - this would normally occur with relatively high currents, such as electrical heating elements. This cabinet only contained fluorescent lighting and fans, and no defrost elements. Therefore this would be considered unlikely. 3 Ingress of moisture or water in a junction box. - Water lying on top of insulation between live parts can cause "tracking" of electricity through insulating material and, result in its eventual breakdown. When this occurs there will be localised heating and eventual arcing between live parts. 13 The JA & JM Gardner report concluded that based on evidence, that firstly, the fire was accidental and started inside a junction box located underneath the refrigerated cabinet, as a result of an electrical fault; secondly, the junction box supplied power to the cabinet, and was not associated with any other part of the building electrical installation; and finally, the reason for the initial fault to have occurred could not be determined but it was thought that there water ingress was highly probable. 14 The plaintiffs' counsel emphasised the possibility of a loose connection in an effort to draw a link between the third defendant and the cause of the fire on the basis that it serviced a fridge about three weeks prior to the accident. 15 In the bundle of documents tendered by the third defendant (Ex A) an invoice refers to work carried out at Franklins on 19 August 2002, three weeks before the fire. The work is identified as: "Attended store to check on stock soft in chicken freezer. Stripped and defrosted case. Checked defrost, okay. Removed and replaced faulty light fitting in freezer room. Adjusted freezer loading door. Removed and replaced 2 fan motors in service deli case." 16 The plaintiffs' counsel also drew this court's attention to a reported conversation between an expert, Mr John Gardner and Mr Kerry Whiteford of W B Whiteford Electrical Pty Limited where it was reported he [Mr Whiteford] said: "- They normally carry out subcontract work for McAlpine Houseman Refrigeration and were involved in the original installation but, he thought that there had been a more recent refurbishment which was carried out by others. - His company was only involved in the refrigeration installation, and not the light and power wiring. - Over the years he has received many calls to the Franklins Store to repair electrical faults caused by the staff hosing down walls and allowing water to enter power points and other electrical items. He said had advised them many times to wipe down walls but this always seemed to be ignored. - He also indicated that Franklins do not clean out the drains under the refrigerated cabinets and it is not unusual for flooding or water build up to occur." 17 However, a letter from W B Whiteford & Co to this court in answer to a subpoena states, "after extensive review of available records we can find no records of any work being carried out at Franklins, John Street, Singleton." These two statements appear to be at odds with each other. I shall refer to this conflict later in this judgment. 18 The third expert's report, namely that of John L Gray Pty Ltd of 15 May 2003 concluded that on the balance of probability, the fire is more likely than not to have been a result of electrical arcing/short between at least one electrical wire connector that was situated inside a junction box underneath the freezer in question. 19 Hence, it seems that the experts' opinion as to the most likely place where the fire started was inside a junction box underneath the freezer. There are several possible explanations as to the cause of the fire.

Interrogatories 20 Rule 22.1(4) of the Uniform Civil Procedure Rules reads: "In any case, such an order is not to be made unless the court is satisfied that the order is necessary at the time it is made." 21 The accepted test of necessity is what is reasonably necessary for the disposing fairly of the matter or necessary in the interests of a fair trial: Boyle v Downs [1979] 1 NSWLR 192 at 205, Yamazaki v Mustaca [1999] NSWSC 1083. The answers which are sought are material in the sense that they may enable the plaintiff either to maintain its own case or to destroy the case put against it: Griebart v Morris [1920] 1 KB 659 at 664 and Schutt v Queenan & Anor [2000] NSWCA 341 at [12]. 22 In Chong v Nguyen [2005] NSWSC 588, Rothman J said at [16]: "The word 'necessary' when used in relation to a requirement on the exercise of a power granted to a court should generally and does here mean 'reasonably required or legally ancillary' to the achievement of the goal, in this case, of a fair trial. I refer to the joint judgment of Gaudron, Gummow and Callinan JJ in Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 which, while determining whether there was a valid basis for contempt proceedings, examined the power of the District Court to issue injunctive relief. They said: 'The term "necessary" in such a setting as this is to be understood in the sense given it by Pollock CB in Attorney-General v Walker (1849) 3 Ex 242, namely as identifying a power to make orders which are reasonably required or legally ancillary to the accomplishment of the specific remedies for enforcement provided in Division 4 of Part 3 of the District Court Act. In this setting, the term "necessary" does not have the meaning of "essential"; rather it is to be "subjected to the touchstone of reasonableness" ( State Drug Crime Commission of NSW v Chapman (1987) 12 NSWLR 477 at 452).'" 23 The interrogatories sought to be answered are: "1 Were you retained to perform work in the Franklins store in the premises situated at 52 - 56 John Street, Singleton in the three years ending and including the 2 nd September, 2002? 2 If the answer to interrogatory 1 is in the affirmative did you perform work on the refrigerator during that period? 3 If the answer to interrogatory 1 is in affirmative but you cannot identify whether you performed the work on the refrigerator, did you perform work on any refrigerator at that premises during the three years ending but including the 2 nd September, 2002? 4 If the answer to interrogatory 2 and/or 3 is in the affirmative: (a) When were you retained to perform work? (b) By whom were you retained to perform work? (c) If a fault was notified to you on all or any of the occasions you were retained, what was identified as the fault and when were you notified? (d) What work was performed on each of the occasions identified in the answer to interrogatory 4(a)? (e) If work was performed on all or any of the occasions referred to in the answer to interrogatory 4(a) but was not performed by your agents or servants but by another or others retained by you, who did you retain on each such occasion? (f) Did your agents or servants or others, if repairs were performed by others retained by you, did they to your knowledge identify any fault as a result of any of the retainers referred to in answer interrogatory 4(a)? (g) If the answer to 4(f) is in the affirmative, what was the fault and what was its cause? (h) If the answer to 4(g) is in the affirmative, was any recommendation made or advice given by your agents or servants, or those retained by you to perform the work, to the staff of the shop to prevent or minimise a fault occurring in the future. If so what was the advice and when and to whom was it given? (i) Did you, or those retained through you, receive payment for services performed in respect of the retainer or any of the retainers referred to in the answer to interrogatory 4(a)? (j) If the answer to interrogatory 4(i) is in the affirmative, when and in what sum was payment received?"

The Registrar's reasons 24 The Registrar in his reasons dated 27 July 2009 stated: "… the court needs to be satisfied that it is necessary to make the order and that it is necessary for the proper determination of the issues. On the material that is available to me I am not satisfied that the plaintiff has established that to make the order is necessary. The expert evidence which has been annexed to Mr Styles' report quite clearly comments on the question of causation and being effectively a short circuit by water egress. Those report are detailed reports and they have not raised any questions as regard to the question of service or maintenance by the third defendant or whether that was a causative issue in these proceedings. …" 25 The plaintiffs submitted that there was evidence before the Registrar that: (1) The third defendant was required by Franklins to perform work at the subject shop in the three years prior to the date of the fire; (2) W B Whiteford Electrical normally carried out work for the third defendant; (3) Over the years Mr Kerry Whiteford of W B Whiteford had received many calls to the Franklins store to repair electrical faults caused by staff hosing down walls and allowing water to enter power points and other electrical items; (4) Mr Whiteford had advised Franklins many times to wipe down the walls but this advice always seemed to be ignored; (5) Franklins did not clean out the drains under the refrigerator cabinets and it was not unusual for flooding or water or build up to occur; (6) The fire had started at low level behind the left hand side of the subject cabinet and spread upwards and out along the top; (7) The fire started in the junction box connecting power to the refrigerator cabinet as a result of electrical arcing; (8) The reason for the initial fault was highly probably due to water ingress to the junction box. Water lying on top of insulation between live part can cause " tracking " of electricity through insulating material and, result in its eventual breakdown which causes local heating and eventually arcing between live parts. 26 While there was a report of a reported statement by Mr Whiteford before the Registrar and this court, Kerry Whiteford wrote to this court on 15 January 2009 informing it that the company had no records of any work being carried out at Franklins, Singleton. As it appears that Mr Whiteford may have been sub-contracted by the third defendant it may be that his company has no written records but he has a memory of servicing the refrigerators at Franklins. But the extent of his knowledge and involvement in the servicing of the refrigerators and the advice he gave, if any, is best tested by him being called as a witness and being the subject of cross examination, not by way of answering interrogatories. 27 The allegations against the third defendant are that firstly, it failed to adequately maintain the chicken refrigerator to prevent short circuit; secondly, there was a failure to properly advise the first and second defendants of the risk of a short circuit; and thirdly, there was a failure to recommend to the first and second defendants that effective safety equipment be installed to a prevent short circuit from causing a fire (S/C [6]). 28 So far as the interrogatories are concerned, the third defendant has admitted that it performed work on the refrigerators and it has produced documents relating to its work at Franklins for the period prior to the fire. They answer interrogatories (1) to (3). If there is knowledge of actual work done on the refrigerator then it is in the domain of the third defendant, although the third defendant's solicitor has advised the plaintiff's solicitor that the third defendant does not have detailed records or the knowledge to answer these interrogatories. So far as any recommendations that were made or advice given to the plaintiff it should have knowledge of them. I agree with the Registrar that the experts have not requested that further information be obtained from the third defendant so that they can express their opinions. In my view, the answers to these interrogatories are not necessary for disposing fairly of the matter, nor are they reasonably necessary in the interests of a fair trial. The decision of Registrar Bradford dated 27 July 2009 is affirmed. In both matters the notices of motion dated 24 August 2009 are dismissed. 29 Costs are discretionary. Costs usually follow the event. The plaintiffs are to pay the third defendants' costs as agreed or assessed.

(1) The decision of Registrar Bradford dated 27 July 2009 is affirmed.

(2) In both matters the notices of motion dated 24 August 2009 are dismissed.

(3) The plaintiffs are to pay the third defendant's costs as agreed or assessed. I certify that this and the 13 preceding pages are a true copy of the reasons for judgment herein of the Honourable Associate Justice Harrison.

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.