Supreme Court New South Wales Medium Neutral Citation: The Owners – Strata Plan No 89074 v Ceerose Pty Ltd & Anor [2020] NSWSC 854 Hearing dates: 2 July 2020 Date of orders: 2 July 2020 Decision date: 02 July 2020 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Plaintiff granted leave to rely on affidavit served out of time. Catchwords: CIVIL PROCEDURE – direction to serve expert evidence – guillotine order – affidavit served 17 business days after due date – whether plaintiff should have leave to rely on the affidavit – whether prejudice to defendant demonstrated Cases Cited: Owners Corporation Strata Plan 76841 v Ceerose Pty Ltd [2017] NSWCA 140 The Owners – Strata Plan 76841 v Ceerose Pty Ltd [2016] NSWSC 1545 Category: Procedural and other rulings Parties: The Owners – Strata Plan No 89074 (Plaintiff/Applicant) Ceerose Pty Ltd (First Defendant/Respondent) Prisand Investments Pty Ltd (Second Defendant/Respondent) Representation: Counsel: G A Sirtes SC (Plaintiff/Applicant) A R Vincent (Defendants/Respondents) Solicitors: DEA Lawyers (Plaintiff/Applicant) Salim Rutherford (Defendants/Respondents) File Number(s): 2017/262472 Judgment 1. Earlier today I granted the plaintiff leave to rely on a report prepared by Mr Robert Macansh dated 29 April 2020 and ordered that the costs of the plaintiff's application be the defendants' costs in the cause. 2. These are my reasons for making those orders. 3. The plaintiff is an owners corporation. It is the owner of the common property of a 16-storey residential unit development in Elizabeth Street, Sydney. 4. The defendants are the builder and developer. 5. These proceedings were commenced on 12 May 2016 in the New South Wales Civil and Administrative Tribunal (NCAT) and transferred to this Court on 29 August 2017. 6. The matter has proceeded slowly in the list. One reason for that is that the parties have endeavoured to resolve their differences consensually. The matter has been adjourned from time to time, evidently for that reason. 7. On 1 August 2019, the plaintiff was directed to serve all evidence on which it intended to rely by 18 October 2019. 8. On 24 October 2019, the time by which the plaintiff was to serve its lay evidence and expert liability evidence was extended to 29 November 2019 and the time by which it was to serve its quantum evidence was extended to 20 December 2019. 9. The plaintiff did not serve its evidence in accordance with those timetables. 10. Ultimately, on 7 February 2020, and by consent, the time for the plaintiff to serve its lay evidence and expert liability evidence was extended to 6 March 2020 and the time for it to serve its quantum evidence was extended to 3 April 2020. 11. On that occasion, Hammerschlag J also ordered that any evidence not served in accordance with those directions not be relied upon without leave. 12. The plaintiff served its lay and expert liability evidence by 6 March 2020. 13. However, it did not serve its quantum evidence, being the report of Mr Macansh, until 29 April 2020. 14. Mr Macansh's report is more than 600 pages in length. It contains Mr Macansh's estimate that the cost of rectification of the allegedly defective work is in the order of $11.6 million. This is considerably more than estimates hitherto given in evidence served by the plaintiff when the matter was at NCAT. 15. Mr Macansh's report was served 17 business days late. An explanation has been given for the delay. Mr Vincent, who appeared for the defendants, accepted that the explanation was not unreasonable. 16. Mr Vincent submitted that the defendants were prejudiced by the late service of Mr Macansh's report. 17. Mr Vincent's instructing solicitor, Mr McGrath, said in his Affidavit of 29 May 2020: "I am informed by Mr Doueihi [a director of the defendants] and verily believe that when these proceedings were still before NCAT and upon review of the NCAT Teerling Report, NCAT Jones Report, NCAT Crowe report, as well as the quantum of the NCAT Macansh Report, and in light of the settlement discussions between the parties, Mr Doueihi made a decision not to make any cross claims against subcontractors at that time due to the limited quantum of the claim being made as to the defects alone such that it was not commercially viable for Ceerose to commence claims against subcontractors at that time. I am informed by Mr Doueihi and verily believe that had Mr Doueihi known the quantum of the plaintiff's claim identified in the Supreme Court Macansh Report served on 30 April 2020 at an earlier time then he would have taken steps at that time to explore possible cross claims against the subcontractors." 1. Mr Doueihi gave evidence to similar effect in The Owners – Strata Plan 76841 v Ceerose Pty Ltd. [1] In that case, I found Mr Doueihi's evidence a sufficient basis to deny the plaintiff in that case [2] leave to amend its case to introduce a cause of action alleging an additional defect. [3] 2. However, the circumstances in this case are very different from those in my earlier decision. 3. Had the plaintiff served Mr Macansh's report by the due date, 3 April 2020, it would not have required leave to rely upon the report. 4. In that hypothetical circumstance, in order to prevent the plaintiff from having the right to rely upon Mr Macansh's report, it would have been necessary for the defendants to apply for an order that the plaintiff not be permitted to rely upon a report served in accordance with an order to which the defendants had consented. 5. As Mr Vincent accepted, it is hard to see upon what basis the defendants could have succeeded in that hypothetical circumstance. 6. Mr Vincent said: "Your Honour, I appreciate that the point is made, well the submission is against us, and the response is this. Essentially my client simply did not appreciate the expansion of the claim as at that time. At that time it did not appreciate the numerous additional defects that now appear in the liability evidence would, in fact, so arise and may be that is a forensic decision that takes on its own risk …." 1. It followed, as Mr Vincent accepted, that to show that they were prejudiced by the late service of Mr Macansh's report, it was necessary for the defendants to show that there was some step they could have taken vis-á-vis their subcontractors between 3 and 30 April 2020 that they cannot now take because of the late service of Mr Macansh's report. 2. Mr Vincent accepted that he could not point to any step the defendants could have taken, nor the expiration of any time limit in relation to any possible cross claim that the defendants might have against subcontractors, between 3 and 30 April 2020. 3. This was notwithstanding the fact Mr Vincent's instructing solicitor, Mr McGrath devoted a considerable part of his 17 page 93 paragraph affidavit sworn 29 May 2020 describing the arrangements between the defendants and their subcontractors and attaching a schedule asserting that it had "been more than six years" since the work done by those subcontractors had been completed. 4. I was not in those circumstances persuaded that any prejudice was caused to the defendants by the service of Mr Macansh's report on 30, rather than 3 April 2020. 5. On the other hand, the prejudice to the plaintiff, were leave to be refused, is obvious: it could not prove the quantum of its claim. 6. In those circumstances, my conclusion was that the plaintiff had made out a case for leave to be granted and that defendants had failed to demonstrate any reason to deny the plaintiff the leave it sought. 7. The result was that this motion was concluded in under 10 minutes. 8. This was notwithstanding the fact that each party had served affidavit evidence, including Mr McGrath's 17 page 93 paragraph affidavit, submissions and an application book containing over 2000 pages. 9. What a waste. ********** Endnotes 1. [2016] NSWSC 1545. 2. Not the same Owners Corporation as in this case. 3. Relevantly affirmed in Owners Corporation Strata Plan 76841 v Ceerose Pty Ltd [2017] NSWCA 140. 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: 02 July 2020