The University of Sydney v Multiplex Constructions Pty Ltd (No 2)

1. [1]

   The plaintiff, The University of Sydney, brings these proceedings against the defendants in relation to allegedly defective building work in the Charles Perkins Centre at the University’s Sydney campus.

2. [2]

   The Charles Perkins Centre was constructed between December 2011 and December 2013.

3. [3]

   The defendants include the builder, Multiplex Constructions Pty Ltd, its guarantor, Brookfield Australia Investments Limited, and a number of subcontractors and consultants including, relevantly for the purpose of these reasons, the sixth defendant, McKenzie Group Consulting (NSW) Pty Ltd.

4. [4]

   On 11 November 2022, the University filed a Notice of Motion seeking, amongst other things, leave to file a Second Further Amended Technology and Construction List Statement.

5. [5]

   On 18 April 2023, I refused to grant the University leave to amend its List Statement as against McKenzie in the form then propounded. [1]

6. [6]

   The University has now circulated a further proposed List Statement which includes, in pars 156 to 187, the allegations that the University now propose to make against McKenzie. A copy of those paragraphs is attached to these reasons.

7. [7]

   The University no longer seeks to propound a case as against McKenzie under s 37 of the Design and Building Practitioners Act 2020 (NSW) and has reformulated its claims against McKenzie for breach of duty and for misleading or deceptive conduct.

8. [8]

   The University’s claim against McKenzie relates to certain Aluminium Composite Panels and Timber Composite Panels attached to the building. I will refer to these as the “Façade Panels”. The Façade Panels are alleged to be combustible, to create an undue risk of fire spread, not to comply with the requirements of the Building Code of Australia, and to be unsuitable for functional use.

9. [9]

   The University alleges that McKenzie was a “certifying consultant” engaged by Multiplex to:

10. [10]

    The proposed List Statement makes the following factual allegations which McKenzie accepts may be treated as accurate for present purposes:

11. [11]

    It is common ground that the installation of the Façade Panels commenced in March 2013 and that by October 2013, the bulk of the Façade Panels had been installed.

12. [12]

    During argument Mr Weinberger, who appeared for McKenzie, informed me that by 9 December 2013 all, or nearly all, of the Façade Panels had been installed.

The alleged breach of duty of care

1. [13]

   The University’s allegation of the duty of care owed to it by McKenzie is at par 166 of the proposed List Statement in the following terms:

2. [14]

   McKenzie made no complaint about this formulation of the alleged “McKenzie Duty of Care”. In any event, it is very similar to the formulation of the “McKenzie Common Law Duty of Care” contained in the corresponding provision in the proposed List Statement that I considered in my 18 April 2023 judgment. I will refer to that proposed List Statement as the “April Iteration”. [8]

3. [15]

   McKenzie’s alleged breaches of the McKenzie Duty of Care are set forth in pars 169 and 169A of the proposed List Statement.

4. [16]

   Each of these allegations proceeds upon the assumption that Multiplex proves the contentions it makes out in its List Response concerning McKenzie’s breach of its alleged duty of care to Multiplex.

5. [17]

   In effect, the University seeks to allege that if Multiplex makes out its case against McKenzie for breach of duty, it will follow that the University is entitled to make out its corresponding breach of duty of care case.

6. [18]

   Paragraph 169 of the proposed List Statement provides:

7. [19]

   On behalf of McKenzie it was submitted that the “central problem” with this paragraph is that it takes the form of a “strict liability pleading” because it contains allegations that McKenzie “failed to assess”, “failed to identify” and “failed to advise or warn the University about” the matters set forth in subpars (a), (b), (c) and (d).

8. [20]

   But the context in which these “failures” are alleged is that they are said to bespeak a breach of the McKenzie Duty of Care because the failures occurred, looking at the chasseur of the clause, “in circumstances where a competent professional certifier in the position of McKenzie would not have engaged in that conduct”.

9. [21]

   It may be that the University will not succeed in establishing that these alleged “failures” would themselves establish a breach of the McKenzie Duty of Care. But I do not consider that they amount to an impermissible allegation of strict liability.

10. [22]

    On behalf of McKenzie it was also submitted, looking at par 169(a), that there is no allegation of what steps the University alleges that McKenzie should have taken to make the posited assessment.

11. [23]

    But the allegation now contained in par 169(a) of the proposed List Statement was contained in the April Iteration [9] and McKenzie made no submission then about its alleged shortcoming. [10]

12. [24]

    It is too late to make this complaint now. Parties should not be encouraged to seek to resist proposed amendments on one basis, and later to agitate a further basis, available but not availed of, on the first occasion.

13. [25]

    I do not find the proposed form of par 169 to be itself a reason to deny the University leave to amend.

14. [26]

    In par 169A, the University alleges a different breach of the McKenzie Duty of Care as follows:

15. [27]

    On behalf of McKenzie, it was submitted that the shortcoming of this paragraph is that subpar (a) does not allege from whom McKenzie should have requested the “drawings and specifications and material data sheets” for the Façade Panels, nor what such documents would have revealed. It was also submitted that, in relation to subpar (c), there is no allegation as to what “further testing” McKenzie should have recommended and what any such further testing would have revealed.

16. [28]

    That may be so, but these allegations were all contained in the April Iteration, [11] and no such submission was then made. For the same reasons I have set out concerning par 169, it is too late to make this complaint now.

17. [29]

    In proposed par 169E, the University’s allegation is what a “reasonable person in the position of McKenzie” would have done as a precaution against the risk of using the Façade Panels. In pars 169F and 169G it is alleged that McKenzie should have taken the identified precautions but failed to do so.

18. [30]

    Thus, par 169E provides:

19. [31]

    I find this paragraph to be expressed obscurely.

20. [32]

    Paragraph 169E(a) commences by alleging that a reasonable person in the position of McKenzie would have requested information from Multiplex concerning the composition of the Façade Panels. But the paragraph does not seek to allege what response there would have been to that request; in particular, what information would thereby have been conveyed by Multiplex to McKenzie concerning the composition of the Façade Panels.

21. [33]

    Paragraph 169E(a) continues by alleging that, having requested such information from Multiplex, a reasonable person in the position of McKenzie would have “satisfied itself that the fire safety properties of these materials were acceptable”. I assume what is intended to be alleged is that a reasonable person in the position of McKenzie would have sought to satisfy itself based on the provided information of the acceptability of the fire safety properties of the Façade Panels; not that such a person would have been so satisfied no matter what information was provided.

22. [34]

    Paragraph 169E(b) continues by positing that a reasonable person in the position of McKenzie “would not have been so satisfied where the product information was not available”. This appears to assume that the “requested information” referred to in para 169E(a) did not include “product information” that showed that “the fire safety properties” of the Façade Panels “were acceptable”. But that is by no means clear.

23. [35]

    Paragraph 169E(b) continues, alleging that a reasonable person in the position of McKenzie not being so satisfied, because the “product information was not available”, would then have informed Multiplex of non-compliance with the relevant provisions of the Building Code of Australia and “would have requested” someone, presumably Multiplex, to develop an “Alternative Solution”.

24. [36]

    I find par 169E to be confused and confusing. I am not prepared to grant the University leave to make this allegation.

25. [37]

    And there is a wider problem.

26. [38]

    Paras 169K, 169L and 169M purport to deal with the causation difficulties that I identified in the April judgment concerning the April Iteration. [13]

27. [39]

    Paragraphs 169K, 169L and 169M [14] are in the following terms:

28. [40]

    Leaving aside the factual difficulty that the University might have in contending that McKenzie was in a position to give advice concerning the Façade Panels before they were installed, [15] the question is whether it is sufficient for the University baldly to assert that had McKenzie advised, after the Façade Panels were installed, that they were not suitable, that Multiplex “would, on the balance of probabilities, have arranged for the Façade Panels to be removed and an alternative compliant product installed in their place”.

29. [41]

    The particulars given in relation to this allegation in pars 169K and 169L amount to no more than a repetition of an allegation made in par 156C that Multiplex followed McKenzie’s advice in relation to a different matter. The particulars given in relation to par 169M also refer to pars 165A and 165B, which allege that had McKenzie not issued the documents referred to at [10] above, the works would not have been certified as having reached practical completion and the Crown Completion Certificate would not have been approved.

30. [42]

    On behalf of McKenzie, it was alleged that it was necessary for the University to “identify the likely credible sequence of events which would have occurred” but for the alleged breach of duty by McKenzie. [16]

31. [43]

    In that regard, I had the following exchange with Mr Shipway, who appeared for the University:

32. [44]

    This exchange highlights the difficulty with the manner in which the University proposes to articulate this aspect of its case.

33. [45]

    The exchange I have set out shows that the University does not know how it could be that, had McKenzie acted in accordance with what the University contends to have been its duty, Multiplex would probably have arranged for the Façade Panels to be removed and “an alternative compliant product installed in their place”.

34. [46]

    Further, simply to allege that this “probably” would have happened without identifying, in any way, what “credible sequence of events” might have achieved this result, places McKenzie in the position where it has no idea what case it has to meet in relation to this critical aspect of the University’s case.

35. [47]

    Contrary to what was put on behalf of the University, I think it is incumbent on the University to identify the “potential scenarios” whereby it contends that McKenzie acting in accordance with its alleged duty would lead to the replacement of the Façade Panels with “compliant product”. Is the University’s case that, somehow or other, Multiplex could have or would have in fact been persuaded or compelled to replace the Façade Panels? Or is the University’s real case that it has lost the chance to achieve this result? Or something different?

36. [48]

    The matter is entirely unclear.

37. [49]

    For that reason alone, my conclusion is that I should decline to grant the University the leave it seeks to amend its breach of duty case against McKenzie in this way.

Misleading or deceptive conduct

1. [50]

   The same problem arises in relation to the University’s proposed claim that McKenzie engaged in misleading or deceptive conduct for the purposes of s 18 of the Australian Consumer Law. [17]

2. [51]

   The University alleges that McKenzie made what is described as the “McKenzie [Building Code of Australia] Representations”, the “McKenzie Certification Representation” and the “McKenzie Practical Completion Representations”.

3. [52]

   As to the McKenzie [Building Code of Australia] Representation, the University proposes to allege that by issuing “each of the iterations” of the [Building Code of Australia] Compliance Report and the final [Building Code of Australia] Compliance Report, referred to at [10] above, McKenzie represented to Multiplex that the Façade Panels were fit and suitable for the purpose of constructing the Charles Perkins Centre and did not represent an undue risk of fire spread. [18]

4. [53]

   It is then proposed to allege that induced by and in reliance on the McKenzie [Building Code of Australia] Representations, Multiplex installed the Façade Panels or alternatively did not arrange for them to be removed and an alternative compliant product installed, and that had McKenzie notified Multiplex that the Façade Panels were not fit and suitable and did present an undue risk of fire spread:

5. [54]

   As to the McKenzie Certification Representation, it is proposed to allege that by issuing the 9 December 2013 letter referred to at [10] above McKenzie thereby represented to Multiplex that the Charles Perkins Centre had been constructed in accordance with the relevant provisions of the Building Code of Australia. [20]

6. [55]

   It is then alleged that induced by the McKenzie Certification Representation, the University proceeded to apply for the Crown Completion Certificate referred to at [10] above and that, had McKenzie declined to issue the 9 December 2013 letter on the grounds that the Façade Panels did not comply with the Building Code of Australia and presented an undue risk of fire spread:

7. [56]

   The McKenzie Practical Completion Representations are said to arise from McKenzie issuing of the Certificate of Compliance referred to at [10] above, which amounted to a representation that the contract works the subject of McKenzie’s expertise had been completed in accordance with relevant standards and had reached practical completion. [22]

8. [57]

   It is alleged that induced by the McKenzie Practical Completion Representation, the University proceeded upon the basis that the works had been completed in accordance with those standards and had achieved practical completion. [23]

9. [58]

   It is then alleged that the University suffered loss and damage because, but for the alleged misleading or deceptive conduct, it would have been aware the work had not been carried out in accordance with the relevant standards, that it had not reached practical completion, and that:

10. [59]

    For the reasons set out above regarding the corresponding allegations concerning McKenzie’s alleged duty of care, I decline to give the University leave to make such unclear allegations.

Conclusion

1. [60]

   For those reasons, I decline to grant the University leave to amend its List Statement in accordance with the proposed document.

2. [61]

   I will now invite submissions as to whether the University should be given any further opportunity to seek to re-plead its case against McKenzie.

3. [62]

   In that regard, I note that the University’s Notice of Motion of 11 November 2022 is currently adjourned to the Technology and Construction List on 8 September 2023.