Ronca Constructions Pty Ltd v Ventura

1. [1]

   HER HONOUR: This is an application for leave to rely on four late-served expert reports. The Technology and Construction List Judge has earlier, by consent, extended time for the applicants to serve any lay or expert evidence in reply, after which time they may not rely on any such evidence without the leave of the Court. Some of the evidence for which leave is now sought is in reply, but most of it is not. Leave to rely on late-served evidence in chief requires leave in any event.

2. [2]

   There was strong opposition to leave being granted, given the long history of the matter and previous ‘guillotine’ orders. The respondents also complained that the applicants had not been candid with the Court on this and previous occasions when extensions were sought. It is a serious matter to assert that one’s fellow legal practitioners lack candour. Solemn consideration should be given to making sure that there is a proper basis for such an allegation: Legal Profession Complaints Committee v in de Braekt [2011] WASAT 1; (2011) 75 SR (WA) 336; at [107] (President Chaney J, Senior Sessional Member Odes and Member Child); Law Society of the Northern Territory v McLaren (NT Legal Practitioners Disciplinary Board, 24 June 2009) at [47], upheld on appeal in McLaren v Legal Practitioners Disciplinary Tribunal (2010) 26 NTLR 45; 159 NTR 1; [2010] NTSC 2.

3. [3]

   Given the strenuous opposition to the leave sought, the applicants’ solicitor, Nelson Arias-Alvarez, ultimately made three affidavits and was cross-examined. The cross-examination lacked utility. In total, some 1,000 pages of material was before the Court on this application. An ancillary motion to set aside subpoenas was also determined.

4. [4]

   Given the allegation of a lack of candour, it has been necessary to approach this matter with care. As such, I was unable to resolve this application when it was heard in the closing days of Court term. Regrettably, none of this is conducive to the “just, cheap and quick” resolution of the underlying building dispute: s 56(1), Civil Procedure Act 2005 (NSW).

‘Guillotine’ orders

1. [5]

   It is convenient to say something about ‘guillotine’ orders. ‘Guillotine’ or conditional orders have a long history, dating well back into the nineteenth century. These interlocutory orders have the effect that, once the condition on which the order depends is satisfied, then the sanction for non-compliance with the order becomes effective without the need for further order: Marcan Shipping (London) Ltd v Kefalas [2007] 3 All ER 365 at [11] and [14] (Moore-Bick LJ).

2. [6]

   Conditional orders may deal with a range of matters, such as the timely filing of a statement of claim, failing which a party’s claim is dismissed for want of prosecution: Whistler v Hancock (1878) 3 QBD 83. Or the familiar order requiring payment of security for costs by a particular date, failing which the proceedings are stayed: r 42.21, Uniform Civil Procedure Rules 2005 (NSW).

3. [7]

   Or the order made in this case by the Commercial List Judge in respect of any further evidence to be relied upon by a party if served after a specified date. Of such an order, Gleeson JA (Barrett and Emmett JJA agreeing) noted in Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309 at [85]:

4. [8]

   But such orders are not without risk and may generate additional procedural disputes: Adrian A S Zuckerman et al, Zuckerman on Australian Civil Procedure (2nd ed, 2023, LexisNexis) at [11.49]. And this is one such case, where the application for leave to rely on late-served evidence has itself delayed the proceedings for some time and likely caused all parties to incur substantial costs.

5. [9]

   As to the Court’s power to grant leave, s 86(1) of the Civil Procedure Act provides:

6. [10]

   See likewise r 1.12, UCPR (“the court may, by order, extend … any time fixed by … any judgment or order of the court”) and r 2.1, UCPR (“The court may, at any time … make such orders for the conduct of any proceedings as appear convenient … for the just, quick and cheap disposal of the proceedings”).

7. [11]

   In answer to the third respondent’s query, r 31.28(4), UCPR is not apposite. That rule requires an applicant to establish “exceptional circumstances” before leave is granted to tender an expert report at trial absent service in accordance with various regimes. That rule is not concerned with an application for an extension of time in which to serve the expert report in the first place: Addison v BHP Billiton Iron Ore Pty Ltd [2019] NSWSC 1433 at [29] (Cavanagh J); In the matter of Azzurri Group Holdings Pty Ltd [2025] NSWSC 607 at [10]-[14] (Nixon J).

8. [12]

   Like any interlocutory order, it is open to the Court, as a matter of case management, to reconsider the order given the particular circumstances of the case: Dawson as liquidator of JR Line and Safety Services Pty Ltd (in liq) v Alam [2020] NSWSC 1679 at [17] (Gleeson J). There, a liquidator sought leave to rely at the final hearing on an affidavit which had been filed without leave after a ‘guillotine’ order had been made. The matter had yet to be given a hearing date. The liquidator’s affidavit sought to correct an administrative error in an earlier affidavit by reference to the bank statements of the company in liquidation, where it could be expected that the defendant director would be familiar with that material. Gleeson J observed at [17]:

9. [13]

   His Honour concluded that the dictates of justice required a grant of leave to permit the liquidator to rely on the material, as it was necessary for the purpose of determining the real questions raised in the proceedings: at [18].

10. [14]

    Similarly in Gispac Pty Ltd v Michael Hill Jeweller (Australia) Pty Ltd [2021] NSWSC 301, the applicant had defaulted twice by failing to serve an expert report by the due date, giving rise to a ‘guillotine’ order. The applicant gave a fulsome and satisfactory explanation for the delay in then serving the expert report 11 days’ late: at [38]. Harrison AsJ considered that the delay was relatively short, no hearing date had been allocated, the applicant would be severely prejudiced if it could not rely on the report and the respondent had been granted additional time to reply to the expert report. In all the circumstances, the balance of justice demanded that leave be granted.

11. [15]

    Leave was refused in Les & Zelda Investments Pty Ltd (as trustee for Les & Zelda Family Trust) v Whitehaven Coal Ltd (No 3) [2024] NSWSC 1037, where the applicant sought leave to rely on an expert report served after three ‘guillotine’ orders and two weeks before trial. The applicant’s delay in commencing the search for an expert to provide expert evidence in reply was not adequately explained: at [65] (McGrath J). The respondent could not adequately respond to the reply report before trial: at [66]. The respondent had been proceeding on the assumption that the applicant’s evidence was complete, which had been “unequivocally confirmed” by a letter from the applicant’s solicitors: at [68]. In the circumstances, McGrath J concluded that it would be unjust to the respondent to grant leave to the applicant to rely on the report, where the trial had been fixed for many months and there were no other trial dates available until the following year: at [74].

12. [16]

    The focus in this case was on the applicants’ explanation for their delay in serving the expert reports. Just what explanation is called for depends on the particular case; evidence will often be given by the applicant’s solicitor from their own knowledge but this may, in some cases, be insufficient and may need to come from the applicant themselves: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (a firm) [2016] FCAFC 2; (2016) 332 ALR 199 at [154]-[156] (Gilmour, Perram & Beach JJ). As a practical matter, the level of detail of which the applicant can give in their explanation may be affected by their wish to maintain client legal privilege.

13. [17]

    Here, the parties focussed their submissions on The Owners - Strata Plan No 94784 v Mirvac Projects Pty Ltd [2024] NSWSC 741, where Stevenson J observed that, for leave to be granted to rely on evidence served in the face of a ‘guillotine’ order, an “adequate, comprehensive, and candid explanation” is required: at [14]. It is apparent from the judgment that his Honour made this observation where there was a concern that the solicitor was not being candid: at [15]. On that application, the respondents could not point to prejudice beyond that implicit in the passage of time. Of this, Stevenson J noted at [21]:

14. [18]

    The story did not end there. Whilst Stevenson J was not then prepared to grant leave to rely on the late expert reports, his Honour gave the applicant an opportunity to put on further evidence in support of its application for leave, to be from the solicitor on the record and to canvas the extent to which the applicant should bear the costs of the application as opposed to the solicitor: at [23]. Such evidence was served, on the basis of which Stevenson J did grant leave: The Owners – Strata Plan No 94784 v Mirvac Projects Pty Ltd (No 2) [2024] NSWSC 782. His Honour then directed the solicitor to show cause as to why he should not personally meet the costs order made against the applicant in respect of the motion. His Honour was subsequently satisfied that a personal costs order should not be made: The Owners – Strata Plan No 94784 v Mirvac Projects Pty Ltd (No 3) [2024] NSWSC 936.

15. [19]

    Finally, it has been said that the power to extend time in a ‘guillotine’ order “is a power which should be exercised cautiously and with due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored”: Samuels v Linzi Dresses Ltd [1981] QB 115 at 126 (Roskill LJ, Lawton LJ and Sir Stanley Rees agreeing). This remains apt, subject to the case management principles in the Civil Procedure Act. The third cross-defendant submitted that debates as to whether leave should be granted can become “circular”. A ‘guillotine’ order may only have “purchase” where there is a hearing date set, but if people do not comply with ‘guillotine’ orders then there will never be a hearing date set. This cycle can be interrupted, I think, by the parties taking a hearing date when their evidence is nearing completion. This has the practical effect that the parties focus on ensuring that their evidence is, in fact, sufficient and admissible in good time.

These proceedings: NCAT and District Court

1. [20]

   Turning to the case at hand, it has a long history, having commenced almost six years’ ago. In September 2020, the plaintiff builder, Ronca Constructions Pty Ltd, commenced proceedings in the NSW Civil & Administrative Tribunal, suing Jesus and Rosario Ventura for unpaid bills of some $267,000. The bills related to work undertaken on the couple’s North Bondi property.

2. [21]

   The building work involved the demolition of part of the existing building and shop – but retaining the original façade wall – followed by construction of a mixed-use development comprising commercial premises on the ground floor, two residential units above, a courtyard and garage. As I understand it, Mr and Mrs Ventura operated a dog grooming business called “The Dandy Dog” from the downstairs premises, and lived upstairs before the work began. They planned to continue to operate “The Dandy Dog” from the commercial premises once the works were complete, and to enjoy additional rental income from the units.

3. [22]

   Mr and Mrs Ventura counter-claimed against the builder for, initially, some $420,000. They were assisted in this litigation by their son, Manuel. The proceedings were transferred to the District Court of New South Wales in March 2021. In June 2021, directions were made for the parties to file their evidence on the claim and cross-claim. Relevantly, Mr and Mrs Ventura were to file their evidence in relation to the cross-claim by 13 August 2021.

4. [23]

   One of the issues in the proceedings concerned the original façade wall. During construction, the wall became unstable and had to be demolished and rebuilt. Mr and Mrs Ventura contended that the builder was responsible for the cost of these works, while the builder contended that it was entitled to a variation. To address this issue, in July 2021, Mr and Mrs Ventura’s solicitors engaged Core Engineering to prepare programmes for the building works. The programmes were to set out the effect of the façade wall failing on the date of completion of the building works. But Mr and Mrs Ventura’s evidence in relation to the cross-claim was not served on time.

5. [24]

   Another issue in the proceedings was the quantum of Mr and Mrs Ventura’s consequential loss from the delay in the completion of the works. Forensic accountant, Fiona Bateman, was retained to prepare a report. For that purpose, on 30 September 2021, Manuel Ventura obtained a rental valuation from a local property manager, in the form of letters from a director of Century 21 Bondi Junction. He was not aware at the time that the letters would be inadmissible absent an accompanying expert report.

6. [25]

   On 11 October 2021, Mr and Mrs Ventura filed a cross claim against the builder and its director, Frank Roncevic, together with certifiers Building Control Group Pty Ltd, Ivan Boulle Consulting Pty Ltd and Ivan Boulle. The Court extended time for the parties to serve their evidence, including for Mr and Mrs Ventura to file any evidence in chief in relation to the cross-claim by 17 December 2021.

7. [26]

   Mr and Mrs Ventura did not file their evidence in time. But to be fair to them, the cross-defendants had yet to file their defences to the cross-claim. Thus, the matters in dispute, and what needed to be proved by evidence, had not been identified. Defences to the cross-claim were filed in January and February 2022.

8. [27]

   On 22 February 2022, the registrar made orders including that Mr and Mrs Ventura serve their lay and expert evidence by 26 April 2022. This did not happen. On 4 May 2022, the registrar ordered that Mr and Mrs Ventura serve their lay and expert evidence by 20 June 2022. This did not happen either. Mr and Mrs Ventura’s solicitors faced difficulties with Core Engineering, which included missing court deadlines. These difficulties were detailed in an affidavit prepared by their solicitors dated 6 July 2022.

9. [28]

   On 24 June 2022, Mr and Mrs Ventura’s solicitors sent a letter of instruction to Ms Bateman, requesting an expert report to quantify Mr and Mrs Ventura’s financial losses. The letter of instruction referred to Core Engineering’s work, which indicated that the construction took eight weeks longer than it should have given a “failed façade wall incident”. Ms Bateman was asked to calculate the loss of income due to delays, also having regard to the rental valuation obtained from the property manager. I infer that the delay in instructing Ms Bateman was caused by difficulties encountered with Core Engineering.

10. [29]

    On 11 July 2022, the registrar made a ‘guillotine’ order: Mr and Mrs Ventura were to serve their lay and expert evidence by 9 September 2022 after which they were not permitted to rely on any evidence without leave of the Court. This was the first ‘guillotine’ order. The evidence was not so served. On 12 September 2022, Mr and Mrs Ventura’s solicitor made a further affidavit describing their efforts to find a replacement expert for Core Engineering.

11. [30]

    But by 15 September 2022, Ms Bateman’s report was to hand. The expert accountant calculated loss based on the rental manager’s valuation and the draft construction programmes prepared by Core Engineering. Of course, by now, Mr and Mrs Ventura’s solicitor was looking for a new programming expert, while the letters from Century 21 Bondi Junction continued to pose risks as to admissibility.

12. [31]

    On 22 September 2022, Mr and Mrs Ventura served their lay and expert evidence, including the report of Ms Bateman. Also served was a report prepared by Peter Antcliffe, “CC and OC Checklist” dated 14 September 2022. Apparently, Mr Antcliffe’s evidence was relevant to the case against the builder, setting out what was required to achieve completion for the purpose of the issue of an occupation certificate.

13. [32]

    On 6 October 2022, the registrar granted leave to Mr and Mrs Ventura to rely on the evidence served by 22 September 2022. Thus, at this point in time, Mr and Mrs Ventura’s default in complying with court orders for the service of their evidence had been addressed. This evidence had some problems. And there was no expert evidence going to the cross-claim against the certifiers.

This Court

1. [33]

   In February 2023, the proceedings were transferred to this Court. On 21 February 2023, Mr and Mrs Ventura’s solicitors sought a fee proposal from programmer Anamika Sharma, to replace the programmes prepared by Core Engineering. Ms Sharma provided a fee proposal the next day.

2. [34]

   On 23 February 2023, Ball J made orders by consent, including that Mr and Mrs Ventura were to serve their quantum evidence by 31 March 2023, after which they may not rely on that evidence without leave of the Court. This was the second ‘guillotine’ order.

3. [35]

   Mr and Mrs Ventura complied with the second ‘guillotine’ order, serving a second report from Ms Bateman dated 31 March 2023 (and two other expert reports). But Ms Bateman continued to use the dates derived from the draft Core Engineering programme. Nor does the evidence reveal any progress vis-a-vis Ms Sharma.

4. [36]

   In May 2023, Mr and Mrs Ventura’s solicitors negotiated a revised scope of works with Ms Sharma. I note that there is no explanation for the three months which passed since Ms Sharma’s fee proposal was initially received.

5. [37]

   On 16 June 2023, Stevenson J directed the cross-defendants to serve their evidence in response to the cross-claim by 24 September 2023, after which time they were not permitted to rely on such evidence without the leave of the Court. This was the first ‘guillotine’ order made against the cross-defendants. The cross-claimants were to serve any evidence in reply by 20 October 2023.

6. [38]

   On 12 September 2023, Mr and Mrs Ventura’s solicitors sent a letter of instruction to Ms Sharma, requesting an expert report in relation to a construction programme for works carried out at the North Bondi property. Ms Sharma was asked to finalise her report by 20 October 2023, this being the date for service of Mr and Mrs Ventura’s evidence in reply. There is no explanation for the four months’ delay between negotiating a revised scope of works with Ms Sharma and issuing a letter of instruction. Nor is it obvious why this report was proposed to be served in reply, as it appears to have been evidence in chief.

7. [39]

   On 22 September 2023, Ball J extended time for the parties to put on their evidence, relevantly, the cross-defendants were to serve their evidence in response to the cross-claim by 10 November 2023, after which time they may not rely on that evidence without leave of the Court. This was the second ‘guillotine’ order made against the cross-defendants. Mr and Mrs Ventura were to serve any evidence in reply by 1 December 2023.

8. [40]

   On 3 October 2023, Ms Sharma asked Mr and Mrs Ventura’s solicitors for a link to the documents to be renewed, as the link in her letter of instruction had expired. Ms Sharma asked additional queries. Two weeks later, on 18 October 2023, Mr and Mrs Ventura’s solicitors renewed the link. Three months later, in January 2024, Mr and Mrs Ventura’s solicitors provided the information in response to Ms Sharma’s queries. On 15 February 2024, Ms Sharma sent draft construction programmes to Mr and Mrs Ventura’s solicitors. These were forwarded to Mr and Mrs Ventura a week later, on 23 February 2024.

9. [41]

   On 5 April 2024, Mr and Mrs Ventura amended their cross-claim. On 12 April 2024, Ball J made orders by consent for the service of further lay and expert evidence. Relevantly, Mr and Mrs Ventura were to serve any further lay evidence by 24 May 2024, the cross-defendants were to serve any expert evidence by 15 July 2024 and Mr and Mrs Ventura were to serve any expert evidence in reply by 15 August 2024.

10. [42]

    On 3 May 2024, Manuel Ventura asked Mr and Mrs Ventura’s solicitors to request that Ms Sharma provide a cover page summarising the construction programmes. On 12 June 2024, Mr and Mrs Ventura’s received a fee proposal from Ms Sharma for the preparation of an expert report. This was the first time that Manuel Ventura became aware of the need for the construction programme to be in the form of an expert report. At about this time, Mr and Mrs Ventura became dissatisfied with their solicitor and began to look for new solicitors.

11. [43]

    Perhaps unaware of this, on 20 June 2024, Mr and Mrs Ventura’s solicitors emailed the parties in advance of a directions hearing. The solicitors noted that an affidavit of Mr Ventura had been served on 24 May 2024 and advised, “We confirm that our clients do not intend to serve any further evidence in chief.” On 21 June 2024, Stevenson J extended time for the parties to complete the service of their evidence. The next step was for the cross-defendants to serve their lay and expert evidence, with Mr and Mrs Ventura to serve lay evidence in reply by 19 August 2024 and expert evidence in reply by 5 September 2024.

New solicitors

1. [44]

   On 10 July 2024, Mr and Mrs Ventura changed solicitors to PCL Lawyers. Shortly after receiving instructions, Mr Arias-Alvarez briefed counsel, where none had previously been briefed. The first major item of work undertaken by the firm was to amend the pleadings.

2. [45]

   On 2 August 2024, Ball J extended time for the parties to put on their lay and expert evidence. Specifically, his Honour made a series of ‘guillotine’ orders against the builder and its director (this being the third ‘guillotine’ order concerning a cross-defendant).

3. [46]

   On 22 August 2024, Ball J granted Mr and Mrs Ventura leave to amend their cross-claim. An extension of time was made for evidence, with further ‘guillotine’ orders made against the builder and its director (this being the fourth ‘guillotine’ order concerning a cross-defendant). This ‘guillotine’ order was complied with. By 31 August 2024, the builder’s lay evidence in reply and the cross-defendants’ lay evidence in response to the cross-claim had been served. On 20 September 2024, the builder’s expert evidence in reply and the cross-defendants’ expert evidence in response to the cross-claim had also been served.

4. [47]

   The cross-defendants’ expert evidence included a report by expert certifier, Michael Wynn-Jones, who had been instructed jointly by the third, fourth and fifth cross-defendants. This was the first expert report on this subject, where Mr and Mrs Ventura had served none. On receiving Mr Wynn-Jones’ report, Mr Arias-Alvarez instructed his employed solicitor to find an expert to respond to it.

5. [48]

   Meanwhile, Ms Sharma had begun preparing a draft report and issued an invoice in September 2024 for her work. There was a dispute about whether the report was within the scope of her fee proposal. As Mr Arias-Alvarez does not appear to have become aware of this dispute until two months later, I infer that the invoice was disputed by Manuel Ventura.

6. [49]

   On 25 October 2024, Stevenson J extended time for Mr and Mrs Ventura to serve any lay and expert evidence in reply to 16 December 2024 and made orders for mediation.

7. [50]

   Mr Arias-Alvarez’s attention turned to his clients’ evidence. He noted that Ms Bateman’s calculations of the loss of rental income were based on a rental valuation carried out by a local property manager. He considered it necessary that the valuation be provided by an independent expert in the form of an expert report. He noted that none of the cross-defendants’ evidence included evidence from a property valuer.

8. [51]

   On 13 November 2024, the employed solicitor contacted a potential expert certifier but was informed the next day that he would not be able to assist. On 14 November 2024, a second and third potential expert certifier were contacted.

9. [52]

   On 14 November 2024, Ms Bateman was provided with copies of Ms Sharma’s programmes and asked to prepare an updated report. It was envisaged at the time that her report would take into account the updated programmes and valuation evidence from an expert. Of course, while Ms Sharma had issued programmes, she had not yet issued an expert report. Nor had an expert valuer been retained.

10. [53]

    On 15 November 2024, the second potential expert certifier advised that he did not have capacity to assist. The third potential expert certifier later advised that he did not have capacity to assist either. A fourth expert certifier was contacted, David Whitwell, who advised on 18 November 2024 that he would be able to assist. On 21 November 2024, the employed solicitor held a Teams meeting with Mr Whitwell. On 27 November 2024, the employed solicitor emailed the parties, requesting a link to the material referred to in Mr Wynn-Jones’ report. He advised:

11. [54]

    Mr Arias-Alvarez believes that his employed solicitor was likely referring to Mr Whitwell. I agree.

12. [55]

    By now, Mr Arias-Alvarez was aware that the former solicitors had retained Ms Sharma to prepare construction programmes. He understood from Manuel Ventura that Ms Sharma had prepared ‘standalone’ programs but had not provided a report. Those programmes had not been served on the parties. Mr Arias-Alvarez formed the view that, if the programmes were to be relied upon, they would need to be in the form of an expert report. In November 2024, Manuel Ventura was told that there needed to be an expert report in relation to the programmes. Manuel Ventura informed the solicitor that there was a dispute in relation to payment of Ms Sharma’s fees.

13. [56]

    On 4 December 2024, the employed solicitor made contact with Ms Sharma. He learned that Ms Sharma had begun preparing a draft report and issued an invoice in September 2024, which had been disputed. In early December 2024, Ms Sharma issued a new fee proposal for the completion of her report. There was a disagreement about the fees as her earlier invoice had charged for a report.

14. [57]

    On 10 December 2024, Ms Bateman provided a draft reply report.

15. [58]

    On 20 December 2024, Mr Whitwell provided a fee proposal. PCL Lawyers was closed between 20 December 2024 and 6 January 2025. But on 24 January 2025, Mr Whitwell informed Mr and Mrs Ventura’s solicitors that he did not have the capacity to assist after all.

16. [59]

    The employed solicitor then re-contacted the second and third potential expert certifiers as to their availability to prepare an expert report. On 28 January 2025, both expert certifiers advised that they were still unable to assist. They were asked whether they knew any other experts who would be able to assist. On 29 January 2025, one name was provided. On 30 January 2025, the employed solicitor emailed the third potential expert certifier again, advising that there may be further time to complete the report and asking how long he would need to attend to this task. On 31 January 2025, the third potential expert certifier advised that he did not have capacity to assist due to his high workload.

17. [60]

    By 30 January 2025, the employed solicitor had resolved the impasse with Ms Sharma, which ultimately resulted in a revised pricing proposal in February 2025. The solicitor then liaised with Ms Sharma in relation to the completion of her report.

18. [61]

    On 3 February 2025, the employed solicitor had a telephone conference with Ms Bateman in respect of her draft reply report.

19. [62]

    The employed solicitor contacted a fifth, sixth, seventh and eighth potential expert certifier on varying dates in January 2025 and followed up these potential experts from time to time. On 28 January 2025, the fifth potential expert certifier advised that he was unable to assist but, on request, provided the names of other potential experts. These experts were then contacted, but advised on varying dates until 3 February 2025, that they could not assist. On 5 February 2025, the employed solicitor contacted Alexander Kameas, who confirmed he could provide a report. The search was over.

20. [63]

    On 6 February 2025, Stevenson J extended time for Mr and Mrs Ventura to serve any lay and expert evidence in reply to 19 March 2025.

21. [64]

    In his first affidavit, Mr Arias-Alvarez said that his firm retained Mr Kameas to prepare an expert report in response to Mr Wynn-Jones’ report on 13 February 2025. He also noted that a formal letter of instruction was issued on 9 April 2025. In his second affidavit, Mr Arias-Alvarez clarified that, on 13 February 2025, his employed solicitor sent Mr Wynn-Jones’ report to Mr Kameas by email but Mr Kameas was not formally engaged on that date. On 19 February 2025, Mr Kameas sent a fee proposal and CV.

22. [65]

    On 3 March 2025, Mr and Mrs Ventura’s solicitors sent a letter of instruction to valuer Kirsty Kerswell. There is no explanation for any delay between when Mr Arias-Alvarez identified the need to retain an expert valuer and instructing same.

23. [66]

    On 17 March 2025, Mr Kameas sent a revised fee proposal.

24. [67]

    The matter was before the Court on 19 March 2025 for directions. Shortly before the directions hearing, Anthony Herron of PCL Lawyers made an affidavit, setting out his progress in obtaining lay and expert evidence. In particular, Mr Herron set out a summary of “the expert evidence in reply currently being prepared”. It is also apparent from Mr Herron’s description of the expert reports that the evidence may not meet the description of expert evidence in reply.

25. [68]

    First, Ms Kerswell had been engaged to comment on the rental value of Unit 3 at the property, and any change in that value, from 8 March 2018 on. Ms Kerswell had advised that her report would be ready in two weeks.

26. [69]

    Second, Mr Herron said that a certifier expert (unnamed) would comment on the evidence of Mr Wynn-Jones as to the responsibility of a reasonably competent certifier. Mr Herron also said that he had been advised that the report “will be ready in 3 weeks”. Mr Arias-Alvarez has reviewed his file and believes that the certifier expert referred to by Mr Herron was Mr Kameas, as he was the only expert who at that time had said that he could prepare a report. I accept this. Further, Mr Arias-Alvarez said that, at the time of Mr Herron’s affidavit, it was anticipated that Mr Kameas would provide his report in early April 2025. As to the respondents’ criticism that Mr Herron did not then identify the expert, I do not think there is anything untoward in this. No decision had then been made to serve a report from that expert, nor had a draft report been received for consideration.

27. [70]

    Third, Mr Herron advised that Ms Sharma was preparing a report in relation to a construction program for works carried out on the property. Mr Herron expected to receive her report by 24 March 2025.

28. [71]

    Fourth, Mr Herron advised that Ms Bateman had been engaged to prepare an updated valuation report and to comment on the builder’s accounting expert report. Further, Ms Bateman was to prepare a supplementary report that “takes into account” Ms Kerswell’s valuation and Ms Sharma’s construction programmes. Mr Herron expected that the supplementary report would be completed in three weeks’ time.

29. [72]

    On 21 March 2025, Peden J extended time for Mr and Mrs Ventura to serve any lay and expert evidence in reply to 9 April 2025, after which time they were not permitted to rely on any such evidence without the leave of the Court. Mr and Mrs Ventura were also ordered to pay the costs of that day. This was the third ‘guillotine’ order made in respect of the cross-claimants.

30. [73]

    On 30 March 2025, Ms Kerswell provided her report. In his third affidavit, Mr Arias-Alvarez corrected his first affidavit, noting that this evidence was not in reply.

31. [74]

    On 1 April 2025, the employed solicitor signed Mr Kameas’ fee proposal. In his second affidavit, Mr Arias-Alvarez corrected his first affidavit, noting that it was more accurate to say that the expert was formally retained on this date. Where Mr Arias-Alvarez noted in his first affidavit that a formal letter of instruction was issued on 9 April 2025, the respondents were unlikely to have been thereby confused.

32. [75]

    On 3 April 2025, the employed solicitor met with Mr Kameas in relation to the preparation of an expert report and provided the documents referred to in Mr Wynn-Jones’ report. On 4 April 2025, the employed solicitor sent further documents to Mr Kameas. On 7 April 2025, the employed solicitor enquired whether the expert needed anything else.

33. [76]

    On 8 April 2025, Mr Herron called Ms Sharma regarding her progress and received an automatic message that she was on leave until 15 April 2025.

34. [77]

    By 9 April 2025, an early draft of Mr Kameas’ report had been prepared. Mr Arias-Alvarez said that the draft report had some areas which had not been covered such that it was not ready to be served. The solicitor sent Mr Kameas a letter of instruction. The letter of instruction asked what a reasonably competent certifier in the position of Mr Boulle would have done to discharge his professional responsibilities, and whether Mr Boulle departed from this. In addition, Mr Kameas was asked to indicate the extent to which he agreed or disagreed with Mr Wynn-Jones. According to the letter of instruction, at least, Mr Kameas’ report was partly in chief and partly in reply.

35. [78]

    Mr Arias-Alvarez said that, in order to prevent the service of evidence from being held up, he decided that the evidence that was completed and ready to be served should be served. That evening, at 11.47 pm, the employed solicitor emailed his colleagues, serving inter alia Ms Kerswell’s expert report. The employed solicitor advised that a final draft report had been received from Ms Sharma, to which some clarifications had been sought. (There was no evidence on this application that such a report had been received.) But Ms Sharma was on leave, returning on 15 April 2025. The report was expected to be finalised by 18 April 2025.

36. [79]

    Further, the employed solicitor advised that a reply report had been provided in draft by Ms Bateman, on which some clarification had been sought, and which depended on the clarifications to be provided by Ms Sharma. (Presumably, this was a reference to Ms Bateman’s draft report provided on 10 December 2024 and discussed in conference on 3 February 2025.)

37. [80]

    In addition, a draft report had been received from the certifier expert “which we are reviewing and anticipate being finalised in the coming days”. (That was true.) The employed solicitor advised that his clients had progressed their evidence as much as they could and the delay was beyond the clients’ control. On completion of the reports, he was instructed to seek leave from the Court to rely on those reports.

38. [81]

    On 11 April 2025, Peden J referred the matter to mediation, to be completed by 31 July 2025. On 14 April 2025, the employed solicitor had a Teams meeting with Mr Kameas. Presumably Ms Sharma returned from leave on 15 April 2025. On 16 April 2025, Ms Sharma’s report was to hand. The report was served on 22 April 2025. On 22 April 2025, Mr Kameas also circulated a further draft report.

39. [82]

    On 9 May 2025, the employed solicitor sent a letter of instruction to Ms Bateman, asking her to amend her calculations in accordance with the programme dates given by Ms Sharma. Ms Bateman was provided with Ms Kerswell’s valuation report and Ms Sharma’s programme report. On 13 May 2025, Ms Bateman advised the solicitors that she could not finish her report until 2 June 2025. On 15 May 2025, the employed solicitor had a call with Mr Kameas regarding the preparation of his report.

40. [83]

    On 3 July 2025, the employed solicitor provided various queries to Mr Kameas for his consideration. On 8 July 2025, the solicitor sought confirmation from Mr Kameas that his report would be provided by the end of the week.

41. [84]

    Ms Bateman did not start work on her further report until mid-June 2025 due to existing work commitments. On 8 July 2025, Ms Bateman’s report was to hand.

42. [85]

    On 14 July 2025, Mr Arias-Alvarez followed up Mr Kameas again. On 22 July 2025, the employed solicitor followed up Mr Kameas. On 25 July 2025, the employed solicitor followed up Mr Kameas again, requesting an update as a matter of urgency. A time was arranged for the gentlemen to speak in relation to the report. The solicitor emailed Mr Kameas after their call, noting that he looked forward to receiving the draft report by 29 July 2025. On 31 July 2025, the employed solicitor followed up Mr Kameas again, requesting that the report be provided as a matter of urgency. Mr Kameas’ report was issued that day.

43. [86]

    On 7 August 2025, Mr and Mrs Ventura’s solicitors served Mr Kameas’ report. The certifier cross-defendants note that the cross-claimants had served no expert report on this subject until Mr Kameas’ report. Mr Arias-Alvarez did not suggest otherwise.

44. [87]

    Mr Arias-Alvarez said there was subsequent conferences with Ms Bateman and, on 22 August 2025, she provided her final report. On 25 August 2025, Ms Bateman’s report was served. As served, the report still bore the date of 8 July 2025. This may have caused some consternation for the cross-defendants. Mr and Mrs Ventura’s claim for damages for consequential loss and rectification costs was now some $4 million.

45. [88]

    The cross-defendants’ solicitors protested, noting that these reports could not be relied upon absent the Court’s leave. Further, “the reports appear to us to be predominantly new evidence, not evidence in reply. We do not intend to engage with these documents (including at the mediation).” On 13 October 2025, the parties participated in a mediation, which was unsuccessful. This motion was filed on 20 October 2025. I infer that the cross-claimants did not wish to incur the costs of this application until it was clear that the matter would need to proceed to trial.

46. [89]

    In his affidavit in support of the motion, Mr Arias-Alvarez said the further expert reports were critical to delays by the builder in performing the works under the building contract, the role of the certifiers and whether they breached their duties or engaged in misleading conduct, and the losses suffered by Mr and Mrs Ventura. He believed that his clients would suffer great prejudice if they were not given leave to rely on the further evidence as the reports were imperative in accurately representing their financial losses and correcting various inaccuracies and errors said to exist in Mr Wynn-Jones’ evidence. Mr Arias-Alvarez noted that the proceedings had yet to be scheduled for a hearing, which was not anticipated until at least the second half of 2026.

47. [90]

    The cross-defendants’ solicitors made three affidavits. The builder’s solicitor, Sarah Newton, advised that, if leave was granted, then the builder would need to serve further evidence in response. The builder would need to obtain instructions in relation to any factual information contained in the material supporting the expert reports. Further lay evidence would need to be prepared to address the delay in commencing the construction works, the progress of the works throughout the construction period, and any lay matters relating to the certifier. A programming expert would need to be retained to prepare a response to Ms Sharma’s report. A valuer would need to be retained to respond to Ms Kerswell’s report. The builder’s accounting expert would need to “prepare an entirely new report” to respond to Ms Bateman’s most recent report. The builder’s accounting expert would need the builder’s programming and valuation evidence first, together with any further lay evidence setting out the assumptions he needed to make.

48. [91]

    The third cross-defendant only wishes to respond to Mr Kameas’ report, which its solicitor, Charu Stevenson, considered to be largely expert evidence in chief. It was also expected that responsive evidence served by the builder in answer to the other expert reports would further delay the proceedings.

49. [92]

    The solicitors for the fourth and fifth cross-defendants, Geoffrey Brookes, voiced a number of concerns which should be, I think, quelled by Mr Arias-Alvarez’s subsequent affidavits,.

50. [93]

    Mr and Mrs Ventura have no objection to the certifier cross-defendants obtaining evidence in response to Mr Kameas’ report. Nor was there any opposition to the builder leading the evidence foreshadowed by Ms Newton. Mr Arias-Alvarez also said that, if the cross-defendants did not rely on the report of Mr Wynn-Jones, then Mr Kameas’ report would not be relied upon either. While the fourth and fifth cross-defendants were content with that course, the third cross-defendant does wish to rely on Mr Wynn-Jones’ report.

Submissions

1. [94]

   Mr and Mrs Ventura submitted that, when the ‘guillotine’ order was made on 21 March 2025, it was estimated that the remaining evidence would take up to 3 weeks to complete. But the evidence took longer than estimated, as has been explained in detailed affidavits. The detailed explanation of the difficulties encountered in obtaining Mr Kameas’ report should be preferred over the series of inferences sought to be drawn by Mr Brookes. I accept that submission. It was further submitted that the dispute about fees with Ms Sharma was inelegant, but that was the reality of litigation where two individuals had spent a lot of money for a long time and were probably conscious of the costs being charged by experts.

2. [95]

   Mr and Mrs Ventura accepted that the expert reports of Ms Sharma and Ms Kerswell were evidence in chief. Ms Bateman’s report both superseded and updated her first report. Mr Kameas’ report was, however, said to be evidence in reply. But the certifier cross-defendant had served Mr Wynn-Jones’ report despite the absence of any evidence having been served by the owners. It would be a denial of procedural fairness for Mr and Mrs Ventura not to be able to respond to that evidence. If Mr Wynn-Jones’ report was not relied upon, then the cross-claimants would not be relying upon Mr Kameas’ report either.

3. [96]

   Mr and Mrs Ventura submitted that the cross-defendants had had the evidence for months. No trial date has been set. The prejudice the cross-claimants would suffer if leave was not granted significantly outweighed any prejudice the cross-defendants would suffer if leave was granted, where Mr and Mrs Ventura did not object to the cross-defendants responding to the additional evidence. Indeed, Ms Sharma’s opinion reduced the consequential loss claim to the benefit of the cross-defendants.

4. [97]

   The builder submitted that the evidence given in respect of Ms Sharma’s report was neither adequate, comprehensive nor candid. There were several periods of time where nothing appears to have happened and for which no explanation was given. Bickering about fees was said to be an explanation that the Court would not accept. (I am not sure why that necessarily follows.) No explanation was given by Ms Sharma as to why her report was produced late or why she chose to go on leave at a critical time. (Nor did I consider that an affidavit from the expert was necessary.) Where Ms Sharma’s letter of instruction was dated 12 September 2023, the court was left to speculate as to why Ms Sharma’s instructions sat in abeyance for 18 months. (This has now been explained by Mr Arias-Alvarez’ affidavits).

5. [98]

   The builder submitted that Ms Bateman’s report was evidence in chief and ought to have been served in accordance with the orders made in February 2023. It was said to be “untrue” for Mr Arias-Alvarez to say that Ms Bateman could not issue her report before Ms Sharma’s report was at hand. I reject that submission. Issuing the report from Ms Bateman before Ms Sharma had committed to her report may be throwing good money after bad, if Ms Sharma did not ultimately provide her report. In that event, the programmes relied upon by Ms Bateman, and thus that section of her report, would be inadmissible. I note that the builder proposes to address Ms Bateman’s report by following the same sequence, that is, awaiting the programming and valuation reports before asking their accounting expert to prepare his report.

6. [99]

   The builder further submitted that the suggestion in Mr Arias-Alvarez’ first affidavit that Ms Kerswell’s valuation report was evidence in reply lacked candour or, as put in oral submissions, was “a patently wrong characterisation [or] a patently advantageous mischaracterisation of the evidence [by reason of which the Court would] be reluctant to accept that Mr Arias-Alvarez is being candid in relation to this”. Mr Herron’s earlier affidavit was said to suffer from the same problem.

7. [100]

   There was significant overlap between the builder’s submissions and those of the fourth and fifth cross-defendants. Senior counsel submitted that there has to be a case where a ‘guillotine’ order is given effect, and it was said to be difficult to imagine a better case. The fact that the Kameas report fell outside the orders of 21 March 2025 was said to be enough to dismiss the application. The explanation for the failure to serve the report by 9 April 2025 was neither adequate, comprehensive nor forthcoming. The applicants should have engaged a certifier expert in anticipation of receiving a report from the fourth and fifth cross-defendants on this topic.

8. [101]

   Numerous criticisms were made by the builder and the fourth and fifth cross-defendants in respect of the applicants’ affidavits, letters of instruction to experts and expert reports. It is not necessary to recite these criticisms; by and large, Mr Arias-Alvarez’ second and third affidavits provided further details which removed any mystery from what happened and, with this, any force that these criticisms may have had. The builder’s submissions and those of the fourth and fifth cross-defendants were put too highly.

9. [102]

   In commendably measured submissions, the third cross-defendant opposed a grant of leave in respect of Mr Kameas’ report only. The third cross-defendant also distinguished itself by accepting that the cross-defendants had also had ‘guillotine’ orders made against them. Further, the absence of a hearing date was a powerful consideration in favour of a grant of leave. Nonetheless, it was submitted that the applicants were not entitled to a favourable exercise of the discretion having regard to the case management considerations identified in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 and ss 56 to 60 of the Civil Procedure Act. Mr Arias-Alvarez’s explanation which was neither adequate nor comprehensive (but there was no suggestion that he was not being candid).

10. [103]

    The third cross-defendant submitted that the explanation did not extend to how Mr Kameas’ report only came to be served on 7 August 2025, in circumstances where that report was properly in the nature of evidence in chief on liability. The applicants had been ordered to serve their evidence in chief on liability on multiple occasions some time ago. This was said to be curious given the service of Mr Antcliffe’s document in September 2022, as he appeared to have expertise in the area of certification and did not appear to have been contacted by the applicants’ solicitors. Presumably because he is unable to do so, Mr Arias-Alvarez did not attempt to explain how the applicants failed to serve the Kameas report or even attempt to procure such a report prior to his coming onto the record. Why, and how, this state of affairs came about was said to be critical to the exercise of the discretion. It was for the applicants to proffer an explanation which dealt with the entirety of their delay and non-compliance with the orders of the Court, not just since Mr Arias-Alvarez came onto the record. These deficiencies in the explanation proffered were said to be sufficient on its own for leave to be declined.

11. [104]

    As to prejudice, the third cross-defendant submitted that it would need to expend further time and money to respond to the Kameas report. The third cross-defendant accepted that Mr Wynn-Jones’ report was not made redundant by Mr Kameas’ report. The allocation of a final hearing date would be further delayed, resulting in prejudice of the type described in Aon at [100] and [101]. The applicants had had ample opportunity to serve such a report. It was not explained why this opportunity was not taken remained unexplained, nor why Mr Antcliffe was not approached even though he appeared to possess relevant expertise and was familiar with the project. Leave should be refused to do justice between the parties even though the evidence was central to the issue of liability on the cross-claims.

Consideration

1. [105]

   By their motion, the applicants seek leave to rely on the expert reports of Ms Kerswell, Ms Sharma, Ms Bateman and Mr Kameas. The motion does not suggest that the leave was sought in respect of the ‘guillotine’ order, that is, for leave to rely on further expert evidence in reply, but simply seeks leave. Mr Arias-Alvarez’s first affidavit in support did refer to the ‘guillotine’ order in respect of reply evidence. He did describe Ms Kerswell’s report as evidence in reply. He did not expressly refer to Ms Sharma’s report as reply evidence, beyond noting that one of the documents in her brief included an expert report served by the cross-defendants. He noted that Mr Kameas’ report responded to Mr Wynn-Jones’ evidence. He explained the delays experienced in obtaining each of these reports.

2. [106]

   Having corrected the reference to Ms Kerswell’s report as in reply in his third affidavit, as well as providing further extensive details as to the reasons for the delay in his second and third affidavits, it was not suggested to Mr Arias-Alvarezin in cross-examination that his initial description was misleading or intended to mislead the Court. I am satisfied that the explanation given in support of the application for leave is adequate, comprehensive and candid.

3. [107]

   Ms Kerswell and Ms Sharma’s reports are both evidence in chief. They are an admissible form of the valuation and programming material relied upon by Ms Bateman in her first report in 2022. That is, the subject matter is not new but the evidence to support it is now admissible. To the extent that Ms Bateman’s report relies on Ms Kerswell and Ms Sharma’s reports, it is evidence in chief but, in truth, a further iteration of her previous reports. As far as Mr Kameas’ report is concerned, it is, strictly speaking, in reply as it responds to Mr Wynn-Jones’ report and will not be relied upon if that report is not read.

4. [108]

   As I noted in Pro-Invest Pitt Street Development Pty Ltd v Charter Hall Holdings Pty Ltd [2025] NSWSC 852, debates as to whether evidence is in reply or, in truth, new evidence in chief are not new: Shaw v Beck (1853) 8 Ex 393 at 398 (Pollock CB). Where this debate occurs long before trial, it may be somewhat arid as resulting problems may be able to be solved by suitable case management directions. As Bond J observed in Sanrus Pty Ltd v Monto Coal 2 Pty Ltd (No 4) [2019] QSC 199 at [17(d)]:

5. [109]

   Whether leave will be granted to rely on evidence which is not truly in reply will depend on the usual case management principles, including the procedural history of the matter, any delays or prejudice which may follow if leave is granted, and whether any prejudice can be cured: Pro-Invest at [15]. The question is what case management orders should be made to ensure the just determination of the proceedings in the circumstances: s 57(1)(a), Civil Procedure Act. The question is whether it is in the interests of justice, having regard to prejudice that may be suffered by the party resisting the application, and the reason why the evidence was not led in the first place: Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 at 478 (Clarke JA, Mahoney and Meagher JJA agreeing).

6. [110]

   There is no doubt that these proceedings are old. This application for leave is made after a third ‘guillotine’ order was made in respect of the cross-claimants. As earlier described, the previous ‘guillotine’ orders were made some years earlier, in 2022 and 2023, and addressed reasonably promptly. As also noted, in the intervening period, the Court had made four ‘guillotine’ orders concerning the cross-defendants.

7. [111]

   Although these proceedings are nearly six years’ old, the matter has yet to be given a trial date. The estimated length of trial is three weeks if the matter is heard in its entirety by the Court, or two weeks if the alleged defects are dealt with by a referee. The parties were not agreed as to whether there should be a reference. As such, when I heard the application in December 2025, the next available hearing date was not until September 2026. That left ample time for the builder and certifiers to meet any late-served evidence.

8. [112]

   The applicants’ explanation has some gaps; it is not perfect but it is adequate. Mr Arias-Alvarez’s ability to give detailed evidence of his predecessor’s preparation of the matter is necessarily limited. To my observation, some of the delays occurred when the Court timetable required the cross-defendants to attend to various tasks. Mr and Mrs Ventura also changed their legal representation. Their case was amended twice. The preparation of the case under Mr Arias-Alvarez’s care has encountered some difficulties as well. But no hearing date has been set. The next available hearing date when this application was heard was nine months hence. I consider that the dictates of justice require a grant of leave to permit the applicants to put their case in proper order, so that the real questions in these proceedings may be justly determined.

9. [113]

   The respondents will be put to further cost in meeting that evidence. It may be the case that, as a result, the respondents’ earlier served evidence becomes redundant. In that event, the respondents can seek that the costs of those redundant reports be paid by the applicants. Determining such an issue is one which the trial judge will be best placed to address.

10. [114]

    All parties sought their costs of the motion. Ordinarily, the applicant would pay the respondent’s costs of a motion such as this. Given the strength of the opposition to the orders sought, I consider that the appropriate order is that each party should bear their own costs, save that the third cross-defendant’s costs should be its cost in the cause.

Orders

1. [115]

   For these reasons, I make the following orders:

   1. (1)

      Grant leave to the cross-claimants to rely on the expert reports of Anamika Sharma dated 16 April 2025, Alexander Kameas dated 31 July 2025, Dolman Bateman dated 8 July 2025 and Kirsty Kerswell dated 30 March 2025.

   2. (2)

      In respect of the costs of the Amended Motion filed by the defendants / cross-claimants on 12 December 2025, order that the third cross-defendant’s costs be its costs in the cause and otherwise make no order as to costs, with the intention that each other party bear their own costs.

   3. (3)

      List the matter for directions before the Technology and Construction List Judge on 20 February 2026 for the purpose of taking a hearing date and making directions for the cross-defendants to file any lay or expert evidence in response to the reports described in Order 1.