Zepinic v Chateau Constructions

Judgment - EX TEMPORE 1These proceedings were commenced on 30 April 2013 by the filing of a Statement of Claim. It is alleged that the defendant in various respects breached a home building contract entered into between the plaintiff and his wife, and the defendant, in February 2006. The relief claimed by the plaintiff consists of various quantified heads of damage and legal costs, as well as interest. 2The Statement of Claim, quite apart from the form of the pleaded allegations themselves, is defective in form in at least two respects. First, contrary to Uniform Civil Procedure Rules 2005 ("UCPR"), r 4.2 (1)(g) and r 4.5(1), the pleading does not provide an address for service which is the address of a place in New South Wales. Instead, an address in London is provided. Secondly, the Statement of Claim does not include a notice to defendant, as required by UCPR r 6.13. Thus, no statement was included about the need to file a defence within a certain time, or that the failure to do so may result in a judgment against the defendant. 3The Statement of Claim bears a Court stamp to the effect that the matter was listed before the Court on 16 July 2013. Prior to that date, the plaintiff filed a Notice of Motion on 2 July seeking default judgment, and the defendant filed a Notice of Motion on 12 July seeking various orders including summary dismissal, striking out the Statement of Claim, and security for costs. These Notices of Motion came before me today for hearing, along with two other Notices of Motion filed by the plaintiff which I have already determined. 4The plaintiff, in support of his motion, relied upon an affidavit affirmed by him on 6 June 2013. The defendant, for whom Mr Ilkovski of counsel appeared, relied upon an affidavit sworn by Mr Andrew Loel on 1 November 2013, to which extensive reference was made in Mr Ilkovski's written submissions. Mr Ilkovski also relied upon Annexure A to another affidavit sworn by Mr Loel (an affidavit sworn on 15 November 2013) which is a print-out from the on-line Registry concerning the procedural history of these proceedings. 5Both parties provided written submissions and addressed the Court. It should be noted, however, that the plaintiff, upon being given an opportunity to deal with Mr Ilkovski's detailed written submissions, effectively declined to accept that invitation. 6The plaintiff's argument in favour of default judgment was simply put. It was that, due to the failure of the defendant to file a defence within 28 days, the Court must enter default judgment against the defendant pursuant to UCPR r 16.6. That is the rule which concerns default judgments on debts or liquidated claims. 7Although the Statement of Claim seeks judgment for specific monetary amounts, the claims made are not in the nature of claims which may be described as claims for a "debt or liquidated claim" within the meaning of UCPR r 16.6. The Statement of Claim thus appears to fall foul of UCPR r 14.13(1). The appropriate rule would rather seem to be UCPR r 16.7, which concerns claims for unliquidated damages only. In any event, the rules concerning default judgment do not mandate that such judgment be entered if there is a relevant default, as submitted by the plaintiff, but confer a discretion on the Court. 8By reason of the absence of a notice to defendant, and the affixing of a stamp which stated that the matter was listed on 16 July 2013, I am not convinced the defendant is or has been relevantly in default. Even if there was a default, I do not think it would be appropriate in all the circumstances to enter default judgment, let alone default judgment for the specified amounts as claimed by the plaintiff. Mr Loel's affidavit makes it clear there are, at the very least, strongly arguable defences available to the defendant, including that the claims are statute barred and that they include complaints which have already been determined adversely to the plaintiff in proceedings in the Consumer Trading and Tenancy Tribunal ("the CTTT"). It is not, in my opinion, an appropriate matter for default judgment. 9The defendant seeks summary dismissal, primarily on the basis that it is clear the claims are statute barred. It is pointed out that all of the work performed under the contract took place in the period up to December 2006, and that the defendant validly suspended work under the contract due to the failure of the plaintiff and his wife to pay progress claims 8 and 9 in February 2007. The proceedings were not commenced until 30 April 2013, more than six years after that time. It was submitted, in effect, that any breaches of contract would need to have occurred after 30 April 2007 in order to be maintainable, but the Statement of Claim does not allege any such breaches. 10It is also put that the Statement of Claim seems to include complaints about work the subject of progress claims 8 and 9, in respect of which the CTTT found the plaintiff and his wife were liable to pay, and these complaints were thus an abuse of process as an impermissible collateral attack in relation to matters which have already been finally determined. There is considerable force in these submissions. 11The defendants also make numerous complaints about the form of the pleading, such as that the allegations are conclusionary in form and not sufficiently clear, either as to the contractual provision allegedly breached, or the nature of the alleged breach itself. They also point out that the plaintiff's wife is a necessary party but has not been joined to the proceedings. 12Notwithstanding the force of the defendant's submissions as to limitation issues and abuse of process, I am not persuaded that it is appropriate to summarily dismiss the proceedings either in whole or in part. However, I have concluded that the Statement of Claim as a whole has a tendency to cause prejudice, embarrassment or delay within the meaning of UCPR r 14.28(1)(b) and thus should be struck out. 13The pleading has numerous deficiencies. These include: (1)it fails to identify what breaches are alleged to have occurred after 30 April 2007; (2)the complaint in paragraph 5, concerning making progress claims when the relevant work had not been completed, does not make it clear which progress claims are referred to. The written submissions of the plaintiff (paragraph 24) suggest that each of progress claims 1 to 9 is included in the allegation. However, if that is so, the pleading runs into the difficulty that in so far as progress claims 8 and 9 are concerned, the CTTT has already determined that the plaintiff and his wife are liable to pay the claims. At least prima facie, there seems to be an issue estoppel in the way of this aspect of the claim; and (3)generally the form of the Statement of Claim is problematic and lacking in particularity. For example, there is no identification of the incomplete works alleged in paragraph 5. Further, there is no identification of the notices referred to in paragraphs 7 and 8, and the alleged basis for the claimed obligation to rectify works is not made clear. 14The Statement of Claim will thus be struck out. However, as I have said, I will not dismiss the proceedings themselves. 15The defendant also makes a claim for security for costs. There is no doubt that, as the plaintiff is ordinarily resident outside Australia, the discretion under UCPR r 42.21(1) to order security for costs is enlivened. The defendant, through Mr Loel, has estimated that the total costs it will incur in the proceedings, if they go through to a hearing, are likely to exceed $400,000. The defendant seeks orders that security for about one-quarter of such amount be provided within 21 days, a further one-quarter 14 days after the plaintiff serves all his evidence (including expert evidence), and the remaining half no later than 60 days before the trial. 16Having regard in particular to the plaintiff's residential status and the existence of factors which suggest that the plaintiff's success in the proceedings is far from assured and indeed faces considerable hurdles, I think this is a case where the provision of security for costs is warranted. However, I would only be prepared to make a limited order at this stage of the proceedings, leaving it open of course to the defendant to seek further security in the future if the need to do so arises. 17I will hear the parties further concerning the amount of security for costs, but my provisional view is that an order for security in the sum of $50,000 should be adequate to cover the proceedings at least up to the point of completion of the pleadings. 18The plaintiff was ordered on 18 July 2013 to provide an address for service in New South Wales. The plaintiff has not complied with that order. Any leave to be granted to the plaintiff to file an amended Statement of Claim should be on condition that the amended Statement of Claim state an address for service, as required by the rules, and in particular as required by UCPR r 4.5. 19Subject to hearing the parties on the question of the amount of security, I would propose these orders: (1)The plaintiff's Notice of Motion filed on 2 July 2013 is dismissed with costs. (2)The plaintiff's Statement of Claim filed on 30 April 2013 is struck out; (3)The plaintiff is ordered to provide security for the defendant's costs in the sum of $50,000, such sum to be provided by way of cash or bank cheque or such other form as may be acceptable to the Registrar of the Court. (4)The proceedings are stayed until security is provided in accordance with order 3 above. (5)The plaintiff is granted leave to file an amended Statement of Claim, on conditions that: (a)the security has been provided in accordance with order 3 above; and (b)the plaintiff provide, in the amended Statement of Claim, an address for service as required by the rules including as required by UCPR r 4.5. (6)The defendant's Notice of Motion filed on 12 July 2013 is otherwise dismissed. (7)Order that the plaintiff pay the defendant's costs of that motion. [DISCUSSION] 20The orders of the Court will be orders 1 to 7 as I have already indicated.