The University of Sydney v Multiplex Constructions Pty Ltd

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

3. [3]

   On 11 November 2022, the University filed a Notice of Motion seeking:

4. [4]

   Most of the issues arising from the University’s Notice of Motion have been resolved.

5. [5]

   What remains for consideration is whether the University should be granted leave to amend its List Statement as against McKenzie Group.

6. [6]

   Questions of costs also remain to be resolved.

The University’s claim against McKenzie Group

1. [7]

   The University’s claim against McKenzie Group is found in pars 154 to 185 of its Proposed List Statement, a copy of which is attached to these reasons. The annotations show amendments already made to the List Statement as underlined, and the amendments the subject of the application in the University’s Notice of Motion of 11 November 2022 as coloured blue.

2. [8]

   During argument, I was informed that the context in which the University’s claims are made against McKenzie Group relates to the cladding of the Charles Perkins Centre.

3. [9]

   The University alleged that McKenzie Group is a “certifying consultant” and that:

4. [10]

   I was informed, during argument, that the cladding the subject of the 18 December 2013 Certificate of Compliance had, by that date, been completed.

Statutory duty of care

1. [11]

   McKenzie Group makes a number of complaints about the manner in which the University proposes to plead its case arising under s 37 of the Design and Building Practitioners Act 2020 (NSW) (“the DBP Act”). [2]

2. [12]

   Section 37(1) of the DBP Act provides:

3. [13]

   “Construction work”, as referred to in s 37(1), is defined in s 36 of the DBP Act as:

4. [14]

   The University’s proposed pleading in relation to s 37(1) of the DBP Act is in proposed par 166A which is in the following terms:

5. [15]

   Proposed par 166A(d) thus alleges that McKenzie Group engaged in each of the four activities referred to in the definition of “construction work” in s 36 of the DBP Act.

6. [16]

   In fact, the University’s claim is more confined than the proposed pleadings, as is evident from this passage from the submissions of Mr Shipway, who appeared for the University:

7. [17]

   Thus, despite the terms of proposed par 166A(d), the University’s case concerning the “construction work” that McKenzie Group is alleged to have carried out is confined to the proposition that McKenzie Group had “substantive control” of the carrying out of the relevant building work; being one element of the fourth activity referred to in the definition of “construction work” in s 36 of the DBP Act.

8. [18]

   For that reason alone, I decline to permit the University to amend its List Statement to include the proposed par 166A.

9. [19]

   There is, however, a wider problem.

10. [20]

    To show that McKenzie Group had “substantive control” over the relevant work, that is, the work dealing with the cladding, the University would have to show either that McKenzie Group actually controlled how the cladding was installed (and there is no such suggestion) or that it had “the ability and power to control how the work was carried out”. [6]

11. [21]

    The facts on which the University relies to make out this proposition appear to be those first mentioned under the heading “Particulars” in par 166A, being those referred to in pars 24 to 30 and in pars 155 and 162.

12. [22]

    As I have earlier stated (by way of footnote), pars 24 to 30 deal with the design of the cladding on the Charles Perkins Centre. There is no suggestion that McKenzie Group had any involvement in that activity. Pars 155 and 162 refer to McKenzie Group’s 29 April 2013 BCA Compliance Report and 18 December 2013 Certificate of Compliance.

13. [23]

    I cannot see how the fact that McKenzie Group issued those two documents could, itself, lead to a conclusion that McKenzie Group had the ability or power to control how the relevant work was carried out.

14. [24]

    Even if one were to accept what is put in the passage from Mr Shipway’s submissions to which I have referred, it is hard to see how such matters, if proven, could bespeak substantive control.

15. [25]

    As indicated during argument, I will give the University an opportunity to reformulate its proposed amendment to the List Statement.

Breach of duty – causation

1. [26]

   A further issue arises as to the manner in which the University has pleaded causation, both in relation to McKenzie Group’s alleged breach of the duty under s 37 of the DBP Act and also its alleged duty under the common law.

2. [27]

   The structure of this aspect of the University’s claim is to allege:

3. [28]

   The Proposed List Statement then continues:

4. [29]

   Thus, in proposed par 167K, the University intends to allege that if McKenzie Group had acted as a reasonable person would have acted in its position, it would have warned the builder, Multiplex, of certain matters.

5. [30]

   Proposed par 167L then follows. That paragraph is expressed in the passive voice and sets out a number of consequences that the University alleges would have come to pass had McKenzie Group given Multiplex the warnings referred to in proposed par 167K.

6. [31]

   The pleading does not state how the giving of warnings to Multiplex as referred to in par 167K would have “caused” or “contributed to” the bringing about of the states of affairs referred to in proposed pars 167L(a), (b) or (c). In particular, it is not alleged what Multiplex, to whom it is alleged the warning should have been given, would have done.

7. [32]

   That leaves unexplained, on the pleading, how the alleged breach by McKenzie Group of its duty of care leads to the loss alleged in proposed par 168B.

8. [33]

   I am not prepared to permit the amendments proposed by the University until these matters are clarified.

Misleading or deceptive conduct – causation

1. [34]

   Mr Weinberger, who appeared for McKenzie Group, submitted that a similar problem arises in relation to the manner in which the University has formulated its claim against McKenzie Group under s 18 of the Australian Consumer Law. [13]

2. [35]

   In substance, what the University alleges is that:

3. [36]

   Mr Weinberger submitted there is a lacuna between the matters I have set out at [35](a) and (b) on the one hand, and the matter at [35](c) on the other. However, such lacuna that may exist in this part of the University’s case was present by reason of earlier amendments to the List Statement and does not arise from the University’s current proposal to amend its List Statement.

4. [37]

   Nonetheless, and to avoid the possibility of a further interlocutory application in these proceedings, those advising the University should take into account what has been said on behalf of McKenzie Group in relation to this aspect of the University’s pleading.

Costs

1. [38]

   The University does not dispute that there should be a costs order in favour of the defendants arising out of its application to amend its List Statement.

2. [39]

   A number of the defendants submit that the University ought to pay the costs “of and occasioned by” the amendment.

3. [40]

   That expression appears in Uniform Civil Procedure Rules 2005 (NSW), r 42.6:

4. [41]

   That rule has no application to the circumstances now before me.

5. [42]

   The expression “costs of and occasioned by the amendment” has potentially wide application and might, in the context of an amendment to pleadings, include such matters as evidence later adduced in response to the amended case. But to order that the University pay the defendants’ costs “of and occasioned by the amendment” now, without qualification, would be to proceed upon the assumption that the University would not be successful in relation to the amended aspect of its claim, an assumption which obviously could not, and should not, be made. For those reasons, I do not propose to make such an order.

6. [43]

   The University accepts that it should pay the defendants’ costs thrown away by the amendment to its List Statement.

7. [44]

   The meaning of the expression “costs thrown away” has been considered in a number of authorities.

8. [45]

   The decision most commonly referred to is the decision of Mukhtar AsJ in Edelman v Badower. [15]

9. [46]

   Parker J considered that decision in Salmon v Albarran (No 4). [16] His Honour observed:

10. [47]

    Similarly, in Ziliotto v Dr Hakim (No 2), [18] Davies J said:

11. [48]

    In The Owners - Strata Plan Number 93543 v Zhang (No 2), [20] I expressed a slightly different view when I said, albeit in the context of an adjournment application:

12. [49]

    In a case such as the present, where an application to amend a pleading or List Statement is to be considered, one cost that will inevitably be “thrown away” is the future cost of the defendant or respondent filing an amended pleading or List Response following the amendment in question.

13. [50]

    In those circumstances, I think it is important not to overthink what “costs thrown away” means as an abstract term but to ensure that each order made properly reflects the costs of the defendant or respondent that will be wasted by reason of the amendment.

14. [51]

    In those circumstances, once the University’s List Statement is in its final proposed form, I will order that the University pay the defendants’ costs thrown away by the amendment, such costs to include the costs of the defendants filing their Amended Responses; and any other future costs that the defendants can identify, prior to the making of the order, will inevitably be incurred by reason of the amendment.

15. [52]

    As to the costs of the University’s Notice of Motion, in circumstances where the dispute between the University and the defendants, other than McKenzie Group, have largely been resolved, my preliminary view is that the appropriate order is that the costs of the University’s Motion be those defendants’ costs in the cause.

16. [53]

    I will hear submissions as to what costs order should be made between the University and McKenzie Group once the form of the University’s List Statement has been finalised.

Conclusion

1. [54]

   The parties should confer and agree on a date by which the University is to circulate any further proposed amended List Statement and a further hearing date for the University’s Notice of Motion of 11 November 2022 so far as it concerns McKenzie Group.