The Owners - Strata Plan No. 94784 v Mirvac Projects Pty Ltd [2024] NSWSC 741

Supreme Court New South Wales

Medium Neutral Citation: The Owners - Strata Plan No. 94784 v Mirvac Projects Pty Ltd [2024] NSWSC 741 Hearing dates: 14 June 2024 Date of orders: 14 June 2024 Decision date: 14 June 2024 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Refuse leave to the Plaintiff to rely on its supplementary expert reports served in non-compliance with guillotine orders Catchwords: CIVIL PROCEDURE – guillotine orders – expert reports served late in face of guillotine order – whether leave to rely on late served reports should be granted – whether explanation for delay adequate, comprehensive, and candid Legislation Cited: Design and Building Practitioners Act 2020 (NSW) Home Building Act 1989 (NSW) Category: Procedural rulings Parties: The Owners - Strata Plan No. 94784 (Plaintiff/Applicant) Mirvac Projects Pty Ltd (First Defendant/Respondent) Mirvac Constructions Pty Ltd (Second Defendant/Respondent) Representation: Counsel: P T Newton SC (Plaintiff/Applicant) R Cheney SC / A A Cameron (Defendants/Respondents)

Solicitors: Chambers Russell Lawyers (Plaintiff/Applicant) Kennedys (Australasia) Pty Ltd (Defendants/Respondents) File Number(s): 2022/382395

EX TEMPORE JUDGMENT (REVISED) 1. The plaintiff is the Owners Corporation in respect of a residential development complex in Bondi, which was developed by the first defendant and built by the second defendant. The development comprises five residential apartment buildings, which are between two and eight storeys each, with basement parking. In total, the development comprises 190 units. 2. The Owners Corporation commenced these proceedings against the defendants on 19 December 2022, alleging breaches of the warranties in the Home Building Act 1989 (NSW) and the duty in s 37 of the Design and Building Practitioners Act 2020 (NSW). 3. On 14 September 2023, by consent, the Court directed that the plaintiff serve its expert liability evidence by 27 October 2023 and 10 November 2023. 4. The Owners Corporation served 14 expert reports. Those reports included a report of Mr Clive Girling, an electrical engineer, Mr Daniel Keato, a fire safety engineer, Mr Simon Ingegneri, an hydraulic services expert, and Mr Tony Dockrill, a structural engineer, each dated 27 October 2023. 5. The solicitor with the day to day carriage of the matter for the Owners Corporation, Mr Michael Li, has deposed that, having seen those four reports, he understood that they did not deal with what he described as the "duty of care issue". 6. On 16 November 2023, again by consent, the Court ordered that the Owners Corporation serve all further expert liability evidence by 1 March 2024. Amongst the orders consented to was an order that, absent leave, the plaintiff was not to be permitted to rely upon any further expert liability evidence served after 1 March 2024 ("the guillotine order"). 7. In his affidavit, Mr Li deposed that, having noticed the perceived shortcomings in the reports of the four experts, he "subsequently" instructed each to prepare a further report. Those reports were all served after 1 March 2024. Mr Girling's report was dated 17 March 2024, Mr Dockrill's dated 25 May 2024, Mr Keato's dated 30 May 2024 and Mr Ingegneri's dated 7 June 2024. 8. The Owners Corporation also served an expert report by a quantity surveyor expert, Mr Madden, dated 5 June 2024. That report is not caught by the 16 November 2023 guillotine order. 9. I have been informed that the totality of the Owners Corporation's claim is in the order of $54 million, of which some $1.5 million is attributable to the further evidence of Mr Dockrill. 10. What Mr Li did not say in his affidavit, and what emerges from the letters of instruction attached to the reports served since 17 March 2024, is that each of the four experts was retained in the closing days of February 2024; on 22 February for Mr Keato, 28 February for Mr Dockrill, and 29 February for Mr Ingegneri and Mr Girling. 11. The only "explanation" given on behalf of the Owners Corporation is in the following paragraphs from Mr Li's affidavit: "The work I have done for the plaintiff in these proceedings has included, but not been limited to, instructing experts, obtaining and collating documents, arranging for experts to inspect the Property. In addition to the work I have performed in connection with these proceedings, I work on other matters involving other clients." And: "The delays experienced in complying with the court's directions have been caused by: - the issues in the proceedings; the number of experts; the time taken to instruct experts and to arrange and co-ordinate the inspection of the Property including 190 units and common property; the availability of experts; my own competing commitments; and the matters I have set out above." 1. Mr Li also said: "I have undertaken the task of obtaining expert reports as quickly as possible. The Plaintiff has now served all expert reports, except the supplementary report by Simon Ingegneri, it intends to rely on in support of its claim in chief. I apologise to the court for the delay in failing to comply with the orders for service of expert evidence." 1. Now, by notice of motion filed on 5 June 2024, the Owners Corporation seeks leave to rely on the further reports. 2. In order to obtain leave to rely on evidence served in the face of a guillotine order, especially one that was consented to, what is required is an adequate, comprehensive, and candid explanation for the failure to comply with the order. 3. Mr Li's "explanation" is none of these things. 4. The explanation is not adequate. Mr Li's reference to unexplained "competing commitments", a circumstance shared by most members of the legal profession, is far from adequate. 5. Mr Li's explanation was not comprehensive. There is no explanation given as to why it was only in the last few days of the three and a half month period provided for by the 16 November 2023 order that the experts were retained. 6. Most troublingly, the explanation was not candid. Mr Li did not reveal that when he said he had "subsequently" re-engaged the four experts, he meant he had done so in one case five working days before the 1 March 2024 deadline, in another case two working days before the deadline, and in the other two cases on the day before the expiry of that deadline. 7. The defendants have not been directed to serve evidence, and it has been candidly accepted on their behalf that they cannot point to prejudice beyond that implicit in the passage of time. They are, I would infer from their name, well-resourced parties. 8. Further, I assume that the belatedly served evidence is important to the Owners Corporation's case. 9. But there is a wider question at play here. Parties in this List should not expect to be granted leave to rely on evidence served late and in the face of a guillotine order, especially one to which they had consented, without an explanation having the characteristics that I have described, namely one that is adequate, comprehensive and, most importantly, candid. 10. On the basis of the explanation currently offered, I am not prepared to grant the Owners Corporation leave to rely upon the further reports. I will, however, not today finally dispose of the Owners Corporation's motion of 5 June 2024. 11. The Owners Corporation should serve any further evidence on which it relies in support of its motion by 5pm on Wednesday 19 June 2024. To the extent that the evidence is from the Owners Corporation's lawyers it should be from the solicitor on the record. It should include that solicitor's proposals concerning the extent to which the Owners Corporation should itself bear the costs of this application, including such costs as may be ordered against the Owners Corporation, a matter about which I have not yet formed any view. 12. I stand the Owners Corporation's notice of motion over to the motions list on 21 June 2024. 13. I direct that a copy of these reasons be provided to the members of the strata committee of the Owners Corporation.