ALLEN v STATE OF NEW SOUTH WALES [2004] NSWSC 1243

New South Wales Supreme Court

CITATION : ALLEN v STATE OF NEW SOUTH WALES [2004] NSWSC 1243 HEARING DATE(S) : 2 December 2003 JUDGMENT DATE : 17 December 2004

JUDGMENT OF : Hulme J at 1 DECISION : Refer to paragraph 129

Plaintiff: Anthony Allen Defendants: State of New South Wales PARTIES : NRMA Insurance Limited John Miller t/as Miller Goddard Stephen Freeman Gregory Russell Judd FILE NUMBER(S) : SC 20303/99 Plaintiff: In person Defendants: CA Webster COUNSEL : J Duncan CE Tingey BD Alder In person Crown Solicitor SOLICITORS : Abbott Tout Miller Goddard/Price Waterhouse Coopers Ebsworth & Ebsworth

- 51 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

HULME J

Friday, 17 December 2004 20303/99

ANTHONY RICHARD ALLEN v STATE OF NEW SOUTH WALES AND ORS JUDGMENT 1 HULME J: These Reasons arise out of Notices of Motion filed by the First, Third and Fifth Defendants seeking that the Plaintiff's claim against each of them be dismissed or struck out, an oral application by the Seventh and Eighth Defendants to similar effect and an application by the Plaintiff for a further extension of time within which to file a Further Amended Statement of Claim in the proceedings. Determination of these applications requires some consideration of past history, both of the events which have inspired the Plaintiff's claims and of the litigation itself. 2 So far as the first of these is concerned, the situation seems to be as follows. (In this connection I rely upon the allegations advanced by the Plaintiff in his pleadings including the Further Amended Statement of Claim and particulars. In an application such as this, I of course make no finding as to the accuracy of them.) On 22 April 1986 the Plaintiff bought at auction the land and house at 13 Lower Beach Street Balgowlah. The land had been reclaimed with landfill some time before 1940 and was in fact the site of a gully. In 1957 the Manly Council had been asked whether there was any reason why a house should not be erected on the site and had said there was not. The Council then granted building approval for the erection of a house on the site in accordance with plans and specifications including specifications as to the foundations. The Council carried out certain inspections and its records show "satisfactory on final inspection". On 22 April 1986 the Plaintiff retained Blessington Judd Freeman & Lazarus to act for him on the purchase of the house. When the Plaintiff attended on that firm he spoke to Mr Judd who referred the Plaintiff to Mr Freeman who was said to be an expert in conveyancing. The solicitors did not seek a s317A Certificate and the plaintiff was not made aware that the Council had allowed the house to be improperly constructed, certified and approved and was at risk of subsidence. The Plaintiff entered into a Home Building Replacement Insurance policy with NRMA Insurance Limited (to which it is convenient refer as "NRMA".) Subsidence occurred or was discovered in 1992 after which discovery the property was inspected by the Council and the NRMA. Some rectification work was done. A loss-assessor and later other representatives of the NRMA told the Plaintiff that he did not have a claim (presumably under the policy) but after further investigations, on 26 October 1992, representatives of the NRMA agreed that the Plaintiff did have a claim. There followed more investigations and discussions as to the extent of the claim and what should be done. Plans and proposals for rectification work were advanced. More lengthy and apparently complicated discussions between apparent experts, the Plaintiff and the NRMA followed and on about 23 December 1992 a Mr Cruickshank, a consulting engineer, whose client was the NRMA submitted a Building Application for the rectification work, including full underpinning. On 19 January 1993, the Manly Council granted Development Approval subject to conditions. A builder, Mr Anglicas, was engaged and he commenced work on 2 February 1993. Mr Anglicas did not keep to the terms of his contract, including terms as to the work to be done and insurance. Discussions and correspondence between, inter alia, the Plaintiff, Mr Anglicas, Mr Cruickshank and the NRMA followed. It is clear that there were numerous points of dispute between two or more of these parties. On 30 March 1993, Anglicas claimed practical completion. It appears that Mr Cruickshank and the NRMA were of the view that Practical Completion occurred on 3 April, although the Plaintiff disagreed. On 23 April the Plaintiff arranged for an inspection by a third party who may well have been an engineer. He found a number of defects. There was further disagreement between the Plaintiff and the NRMA and others. Other work seems to have been done and on 19 July 1993 the NRMA made what was said to be a final offer to settle the claim. Another facet of the Plaintiff's claim is to the following effect. In 1971 the Builders' Licensing Board was established. By 1980 its annual report revealed a culture of claim minimisation and relatively little was paid out to claimants. In 1989 the Building Services Corporation Act came into effect, one of the objects of the Corporation being to protect owners and purchasers of dwellings. There were inquiries into the consumer adverse culture which had continued. On about 13 July 1992, the Plaintiff made contact with the BSC and was advised by a Mr Chilvers that although he could not recommend engineers or builders, Anglicas was OK. Mr Chilvers did not advise the Plaintiff on matters such as his insurance rights under the BSC legislation, rectification orders or the availability of further information. On 8 February 1993, the Plaintiff made complaints to Mr Chilvers but Mr Chilvers did not offer to investigate or advise the Plaintiff of BSC"S obligations to investigate. On 15 April 1993, the Plaintiff again telephoned Mr Chilvers who recommended that the Plaintiff arrange for an independent engineer to inspect the site but said that the BSC would not get involved. The Plaintiff made a formal complaint to the BSC on 27 July 1993 and a joint inspection by all or virtually all interested parties was held on 5 August. From a report of the BSC inspector, a Mr Petrie, it appears that he formed the view that the rectification work had been carried out satisfactorily. He reported that the house had been "jerry built" to start with. The BSC declined to issue a rectification order to Mr Anglicas and informed the Manly Council that Mr Anglicas' contract had been adhered to. In November 1994 the Plaintiff lodged another complaint with the BSC. The BSC had further investigations carried out but again failed to properly do so or use the information it received. Mr Judd was a solicitor consulted by the Plaintiff in February 1994 and thereafter until September 1994. He is said to have advised that there were a number of parties who could be sued, including his own firm, but that it was best to sue only NRMA Insurance Limited. He is said to have not properly looked after the Plaintiff's rights or interests. Mr Miller was another Solicitor who was engaged by the Plaintiff. He was retained in May 1997 to act on the Plaintiff's behalf in divorce proceedings and at least to some extent in connection with disputes between the Plaintiff on the one hand and the State of New South Wales and NRMA on the other. Mr Miller is said to have breached his obligations to the Plaintiff by some involvement with the Plaintiff's ex-wife's barrister, mis-statements in that regard, to have failed in his conduct of divorce proceedings, to have overcharged the Plaintiff and manipulated his calculations in charging the Plaintiff. 3 The proceedings themselves were commenced on 2 July 1999 against the "Building Services Corporation/Department of Fair Trading/NSW Government of the Day" as First Defendant, Manly Council as the Second Defendant and NRMA Insurance Limited as the Third Defendant. 4 On 1 September 2000 the Plaintiff filed a Further Amended Statement of Claim in which eight Defendants were named. In order they were:- 1. The State of New South Wales. 2. Manly Council. 3. NRMA Insurance Limited. 4. Blessington Judd Freeman & Lazarus. 5. John Miller t/as Miller Goddard. 6. Commonwealth of Australia. 7. Stephen Freeman (described as a former partner of the Fourth Defendant). 8. Gregory Judd (described as a former partner of the Fourth Defendant). 5 Applications to dismiss or strike out parts of this Statement of Claim and an application by the Fifth Defendant for a separate trial of what he asserted were claims against him unrelated to those against the other parties came before Newman AJ in August 2001 and, as appears from orders made and Reasons published on 7 September 2001, were in part successful. In arriving at the conclusions that he did, Newman AJ drew attention to a substantial number of deficiencies in the Further Amended Statement of Claim. In the case of some of the Defendants and some of the causes of action, Newman AJ gave the Plaintiff 28 days within which to re-plead. The Court records show that his Honour's orders were entered on 8 October 2001. 6 An application by the Plaintiff for a stay of the orders of Newman AJ came before Stein JA on 29 October 2001 and was dismissed. The Plaintiff sought leave to appeal against some or all of the orders made by Newman AJ. On 30 July 2002 this Application was refused. Reasons given on that occasions re-affirm in a number of respects the deficiencies in the pleading to which Newman AJ had adverted. 7 On 14 October 2002 there came before me an application by the Plaintiff for, inter alia, an extension of time within which to comply with Justice Newman's orders. In the course of that application I formed the view that the orders actually made by Justice Newman did not reflect the reasons which his Honour gave and on 15 October 2002 I made the following orders under the Slip Rule.