Workcare Management v Gajic Holdings

Australian Securities and Investments Commission v Rich [2006] NSWSC 826 CASES CITED : Sam Management Services (Aust) Pty Ltd v Bank of Western Australia Ltd [2009] NSWSC 702 Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471

PARTIES : Workcare Management Pty Limited (plainitff) Gajic Holdings Pty Limited (defendant)

COUNSEL : R W Washington, R Lahood (plainitff) A G Rogers (defendant)

SOLICITORS : Thomas Henry Bray Lawyer (plaintiff) Mitry Lawyers (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

Date of Hearing: 23-24 June 2010 Date of Judgment: 30 June 2010

2010/95135 Workcare Management Pty Limited v Gajic Holdings Pty Limited (No. 2)

JUDGMENT 1 REIN J: I delivered judgment in this matter on 11 June 2010 and stood the matter over to 18 June to enable orders to be finalised. On 18 June, counsel for the defendant, Mr Rogers, indicated that he could not agree to the orders, as his client wished to apply to re-open its case. I gave the defendant leave to file a Notice of Motion in that connection and stood the matter over until 23 June to enable the motion to be heard. 2 The evidence relied on by the defendant is Mr Gajic's affidavit of 17 June 2010, Mr Jelicic's affidavits of 17 June and 23 June 2010, and Mr Samardic's affidavit of 23 June 2010. The plaintiff relied on the affidavit of Mr Frassetto of 22 June 2010. 3 Mr Jelicic is a director of Aleksander Design Group Pty Ltd ("ADG"). ADG was originally retained by Devcon to provide architecture services (Mr Jelicic's wife is an architect employed by ADG). In February 2009, ADG was engaged by the plaintiff to produce development application plans ("DA plans") and construction certificate plans ("CC plans"). 4 The evidence of the defendant, including the affidavits in reply, was sought to be adduced to establish that the evidence given by Mr Frassetto and Mr Zammitt at the hearing (and in Mr Frassetto's latest affidavit), that is, that the DA plans lodged in May 2009 and approved by the Council were sufficiently detailed to support a construction certificate and that it had been WMC's intention to rely on the DA plans, was false. Mr Samardic also deposes to the fact that the work that he saw being carried out on level 1 was not consistent with the DA plans. The defendant also tendered on the application the development application lodged by Mr Frassetto on behalf of WMC.

5 Mr Gajic's affidavit is to the effect that he learned from Mr Alcorn, but only after judgment was given, that Mr Frassetto had said in his evidence that the DA plans were sufficiently detailed to support the issue of a construction certificate and that is what the plaintiff had intended to rely on.

6 Mr Washington, counsel for the plaintiff, submitted that the evidence which the defendant wished to lead was contested and not decisive, but it is evidence which, if accepted, particularly when taken together with other material already before the Court, supports, or at least may support, the conclusion that the plaintiff's claims that it had, since May 2009, always intended to rely on the DA plans to obtain a construction certificate, were false, and hence would support the conclusion that the plaintiff's own failure to obtain detailed plans was a cause of the plaintiff's inability to obtain a construction certificate, and not simply the defendant's breaches.

7 I had occasion to refer to the matters that need to be considered when deciding whether or not leave should be given to re-open a case in Sam Management Services (Aust) Pty Ltd v Bank of Western Australia Ltd [2009] NSWSC 702, although that was a case in which judgment had not, at the time of the application, been handed down because it had been listed for judgment at that time. I set out the matters that had been identified by Austin J in Australian Securities and Investments Commission v Rich [2006] NSWSC 826 at [18] and to which attention should be given, namely: "(i) the nature of the proceeding; (ii) whether the occasion for calling the further evidence ought reasonably to have been foreseen; (iii) the consideration of fairness that the defendant is entitled to know all of the evidence he has to meet in taking forensic decisions as to cross-examination and the nature and extent of the evidence he will himself adduce on the matters in question; (iv) the extent to which the plaintiff has embarked upon calling evidence on the issue in question in its case in chief; (v) the importance of the issue on which the further evidence is sought to be adduced to the pleaded issues in the case; (vi) the degree of relevance and probative value of the further evidence sought to be adduced and its potential to involve an undue waste of time; (vii) the prejudice to the defendant in terms of delay in the completion of the proceeding and the consequential costs; (viii) the public interest in the timely conclusion of litigation; (ix) what explanation is offered by the plaintiff for not having called the evidence in chief." 8 The guiding principle is whether it is in the interests of justice that leave be granted: see Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478 per Clarke JA (Mahoney and Meagher JJA concurring).

9 The defendant's contention is that the plaintiff could not have obtained a construction certificate even if all of the essential services had been completed by the defendant, because the plaintiff itself was required to obtain the detailed drawings required for the issue of a construction certificate. For the defendant to make good this contention, it had several alternatives open to it: (1) to show that the work being carried out by the plaintiff or its sub-tenants was different to the work detailed in the DA plans; (2) to show that the DA plans were insufficiently detailed to support a construction certificate; or (3) to show that the plaintiff was intending to obtain more detailed plans than the DA plans. 10 So far as (1) is concerned, the defendant made no attempt to establish this at the hearing, even though Mr Samardic had made an assertion in an email to the effect of (1). So far as (2) is concerned, this was probably a matter best dealt with by expert evidence, but the defendant did not rely on any expert report, and the plaintiff's witnesses asserted that the DA plans were intended to be, and were, more detailed than required for simply development approval and were sufficient for the issue of a construction certificate. 11 So far as (3) is concerned, this was dealt with by the defendant at the hearing by cross-examination of the plaintiff's witnesses, it being put to them that they never had any intention of relying on the DA to obtain the construction certificate, and when they said that they did, that their assertions now that they so intended were not credible given the lack of any contemporaneous correspondence to support it and the absence of any advice to their certifier that that is what they intended to do. Approach (3) is really an expansion of (2), or possibly an amalgamation of (1) and (2) - that is, the reason that the plaintiff intended not to rely on the DA plans was because of (1) or (2) or a combination of both. To the extent that (3) involves something more, it is not strictly relevant if the plaintiff could have obtained a construction certificate on the basis of the DA plans as submitted, and it was not precluded from so doing even if it had, at some earlier time, intended doing otherwise, either out of ignorance or some other reason. Having said that, establishing that the plaintiff did not, and does not, intend to proceed to a construction certificate without more detailed plans than those contained in the DA would very likely be closely linked to (1) or (2). 12 Mr Gajic says that after the judgment was handed down, he was surprised to hear from Mr Alcorn, who was in Court during the hearing, that Mr Frassetto had asserted that WMC intended to use the DA plans. This evidence was given to support a claim that the defendant was not aware until after the hearing that the evidence now obtained ought be obtained. Mr Alcorn gave evidence at the hearing and has been intimately involved in the dispute, but there is no affidavit from him to the effect that he was surprised by Mr Frassetto's evidence or the evidence of Mr Zammitt, who had said something similar at T56.14-23. 13 I think it was incumbent on the defendant to establish at the hearing that the plaintiff could not have obtained a construction certificate for reasons other than the absence of essential services, and I do not accept that the evidence of Mr Jelecic and Mr Samardic was not available to the defendant prior to the hearing. The defendant was not entitled to assume that the plaintiff would accept that the DA plans were insufficient, particularly when two more obvious lines of attack by the defendant were open but nor pursued - that is, establishing that what was being installed bore no resemblance to the DA approved plans, as Mr Samardic now says in his affidavit, and establishing with expert evidence that the DA plans were insufficient material from which to obtain a construction certificate, which is evidence that even now the defendant does not seek to lead. No adjournment was sought after Mr Zammitt and Mr Frassetto had given their evidence. It is relevant too that the matter was an expedited hearing and that ADG's involvement in the preparation of the plans was known to Devcon and Gajic. It is also relevant that the evidence which the defendant now seeks to lead from Mr Samardic includes evidence that it could, and should, have led at the hearing. 14 What I have said is, I think, sufficient to preclude the grant of leave. However, there is another reason which straddles (iv), (v) and (vi) of the items set out in [7] above. The principal basis of my judgment was to focus on the provision of an incomplete building to the lessee. It was the defendant's case that the Court needed to examine whether a construction certificate would have been issued or not. My conclusion as to whether the plaintiff could have obtained a building certificate was not that it could have (and I accepted that at least one other matter, the absence of a waste management plan, was relevant to that), but that even if there were multiple reasons, some of which were as a result of the defendant's breach and some of which were as a result of the plaintiff's breach, this would not preclude liability for the damages in the form of rent. Mr Rogers submitted that reliance on the principle enunciated in Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 346 was erroneous. Mr Washington submitted that the decision was binding on me and did apply to the present circumstances. 15 Mr Rogers' careful analysis, I admit, has induced considerable doubt in my mind as to the applicability, in these circumstances, of the statement of principle relied on. But even if Mr Rogers' submission were accepted, it would not be determinative of the outcome, since the point only arises in connection with the question of whether the construction certificate would have been issued, and the view that I took was that the decisive matter was whether the plaintiff, making no claim for damages other than the rent claimed from it, suffered damage in being provided with a building that was not complete as a result of the defendant's breach of contract, not whether loss had arisen by reason of the absence of a construction certificate. The condition of the base building was not something to which the plaintiff contributed. At most, then, if leave were granted, if the fresh evidence of the defendant were accepted, and if the conclusion contended for were reached, both as to the facts and the law, it would not alter the result. Conclusion 16 I therefore refuse leave to the defendant to re-open its case.

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