Zhou v Rosch [2017] FCA 805

FEDERAL COURT OF AUSTRALIA

Zhou v Rosch [2017] FCA 805 File number: NSD 2088 of 2016

Judge: RARES J

Date of judgment: 16 June 2017

Legislation: Federal Court of Australia Act 1976 (Cth) Pt VB, s 37P Federal Court Rules 2011 r 16.51 Home Building Act 1989 (NSW)

Cases cited: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199

Date of hearing: 16 June 2017

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Category: No Catchwords

Number of paragraphs: 12

Counsel for the Applicant: Dr A Greinke

Solicitor for the Applicant: Auyeung Hencent & Day Lawyers

Counsel for the Respondents: Mr B Le Plastrier with Ms J Ambikapathy

Solicitor for the Respondents: Fielding Robinson

ORDERS NSD 2088 of 2016

BETWEEN: RAN ZHOU Applicant

AND: MIKE ROSCH First Respondent

ELEGANT PROPERTIES PTY LTD (ACN 072 746 322) Second Respondent

JUDGE: RARES J DATE OF ORDER: 16 JUNE 2017

THE COURT ORDERS THAT:

1. The interlocutory application filed 15 June 2017 be dismissed. 2. The respondents pay the costs of the interlocutory application on an indemnity basis. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

RARES J: 1 This proceeding commenced on 2 December 2016. Ran Zhou, the applicant, amended her statement of claim on 12 December 2016 pursuant to r 16.51 of the Federal Court Rules 2011. The proceeding came before me for the first case management hearing on 3 February 2017. It involves a claim by Ms Zhou for return of $170,000 that she paid to one or other of the two respondents, an individual, Mike Rosch who is a builder, and his company, Elegant Properties Pty Limited, under a contract to demolish a house and build two new ones on the same land. 2 The substantive basis of Ms Zhou's claim was that neither Mr Rosch nor his company was licensed or insured under the Home Building Act 1989 (NSW) to perform the work the subject of the contract. That statute provided that a person could not contract to do any residential building work of the kind that the statement of claim alleged, that ultimately, Mr Rosch or his company entered into, unless the person was, first, licensed to perform such work and, secondly, insured in accordance with the Act. 3 At the first case management hearing on 3 February 2017, I explored with the solicitor then appearing for the respondents the evasive and unsatisfactory way in which their defence dated 18 January 2017 had been pleaded. Moreover, it seemed to me that the issues and the sum at stake required that the parties urgently seek to resolve the matter before they wasted costs that would far exceed what was at issue in the proceeding. I referred the matter to mediation before the Registrar to occur on or before 1 March 2017, unless the Court otherwise ordered. I ordered that the respondents file and serve an amended defence that pleaded responsively to the allegations in the statement of claim on or before 8 March 2017, and stood the matter over to 10 March 2017. 4 On 10 March 2017, the licensing situation of the respondents had still not been satisfactorily elaborated by the respondents. I made orders that on or before 14 March 2017, the respondents provide copies of any licence held by each of them at the date of the contract, and any insurance policy, certificate of eligibility or other document evidencing insurance arrangements applicable to the work the subject of the contract, and that Elegant Properties file and serve any cross-claim on Ms Zhou by 17 March 2017. I then varied the order for mediation so that it should occur on or before 26 April 2017 and stood the matter over to 28 April 2017 for further case management. 5 On 28 April 2017, I considered the contractual document itself. That was because of the ambiguities raised in the respondents' pleadings as to who on the respondents' side was the contracting party. I required the respondents to file and serve an affidavit attaching a copy of each of Mr Rosch's and Elegant Properties' Australian Business Number registrations and New South Wales builder's licence as current between 1 January 2016 and 30 September 2016, in order to clarify the identity of the contracting party by reference to the respondents' uses in the contract of Australian Business Numbers and licence numbers. I required the parties give general discovery on or before 8 May 2017, and made orders for the service of outlines of evidence of each lay witness either side wished to call and brief written opening submissions, limited to five pages, fixing the matter for hearing to commence on 28 June 2017 with an estimate of two days. 6 Alexander Robinson, the solicitor for Mr Rosch, but notably not Mr Rosch, swore two affidavits, one on 15, and one on 16, June 2017, seeking to support the respondents' interlocutory application of 15 June 2017 to further amend their defence. Mr Robinson said that, during the process of preparing Mr Rosch's outline of evidence on 1 June 2017, it became apparent to him for the first time that Mr Rosch and Ms Zhou had supposedly been operating on the basis of an assumption, arising from a conversation between Mr Rosch and her, that insurance would not be provided until the design was complete, which could only be provided after demolition of her existing premises had occurred, and that Mr Rosch had done a considerable amount of work at her request of which she allegedly took the benefit. Mr Robinson then instructed counsel to prepare a proposed further amended defence that pleaded the legal effect of these matters and, on 5 June 2017, Mr Robinson sent the proposed amended defence to the solicitors for Ms Zhou. A mediation occurred on 8 June 2017 before the Registrar, but was unsuccessful. 7 The proposed amendments will, as counsel for the respondents submits, extend the proceedings and involve a new, substantive and potentially complicated set of legal issues arising from the attempt to rely upon the alleged assumption to which Mr Robinson referred.