Eighty Eight Construction Pty Ltd v PPK Willoughby Pty Ltd

By a contract dated 17 October 2012 (“the Contract”), the defendant, then the owner of a property in Willoughby, contracted the plaintiff to build 16 townhouses on that property.

Disputes arose between the parties concerning the Contract. On 23 December 2013, the defendant purported to terminate the Contract. The plaintiff asserted that that purported termination was invalid and constituted a repudiation by the defendant of its obligations under the Contract. On 6 January 2014, the plaintiff purported to accept that repudiation and itself terminate the Contract.

The plaintiff commenced proceedings on 14 March 2014, seeking a declaration that the defendant had repudiated the Contract and that it, the plaintiff, had validly terminated the Contract. The defendant then brought a cross-claim alleging various defects in the building work.

Consequently, the matters for consideration in the proceedings are whether the plaintiff properly terminated the Contract, and whether there are defects arising from the plaintiff's building work for which the defendant should have compensation.

On 21 March 2014, the Court made an order for reference pursuant to Uniform Civil Procedure Rules r 20.14, referring the whole of the proceedings out to Ms Janet Grey (“the Referee”) for determination.

On 17 February 2015, the Referee fixed the hearing of the reference for 18 May 2015.

Each side engaged engineering, building and window experts. The experts engaged by the plaintiff were: Mr Herbertson, an engineer; Mr Zakos, a builder; and Mr Karsai, a window and facade works specialist.

On 2 April 2015, the plaintiff's then solicitors ceased to act. The plaintiff remains unrepresented by a solicitor. Mr Redmond of counsel has appeared before the Court on number of occasions, including today, on instructions from Mr Yuan, a director of the plaintiff.

At around the time the plaintiff’s solicitors ceased to act, the plaintiff also ceased to retain its experts.

In February 2015, the Referee made directions that the various experts confer and produce joint reports. By early May 2015, those reports had not been prepared as the Referee directed. The defendant's experts had not received any communication from their opposite number so far as concerns preparation of those reports; no doubt because they had ceased to be retained.

In those circumstances, by notice of motion dated 6 May 2015 the defendant moved the Court for orders dismissing the proceedings for want of due despatch pursuant to UCPR r 12.7.

Those matters came before Hammerschlag J on 15 May 2015. By consent, his Honour made the following orders:

The plaintiff complied with order number 5. Accordingly, orders numbers 1, 2 and 3 made by Hammerschlag J were dissolved.

Hammerschlag J also ordered that the commencement of the hearing of the reference be adjourned from 18 May 2015 to 13 July 2015.

On 19 May 2015, the Referee directed that the parties procure that their experts produce joint reports by 30 June 2015. On 28 May 2015, the Referee directed that the parties each pay $35,000 as security for the costs of the Referee by 4 June 2015.

Since then, the plaintiff has not done any of the following things:

The joint reports are not due until 30 June 2015. However, that is only two business days away.

As Mr Hicks of counsel, who appeared for the defendant, submitted, the plaintiff has, in effect, abandoned the proceedings.

In those circumstances, by notice of motion dated 19 June 2015, the defendant seeks the following orders:

Mr Redmond, who, as I have said, appeared before me today, informed me that Mr Yuan instructs him that the plaintiff would consent to orders 5, 6, 7, 8 and 9 as sought by the defendant, and that the plaintiff proposes to re-engage its experts with a view to compliance with the Referee's directions as to a joint report.

However, one of those experts (Mr Zakos) is leaving Australia today until the end of July. Further, there is no evidence before me as to what steps the plaintiff has or could take to engage experts, nor as to the availability of the plaintiff's or the defendant's experts. Nor is any explanation offered for the failure of the plaintiff to comply with the Referee’s directions.

It appears to me that in all those circumstances, the plaintiff has been given every opportunity to get its case ready for hearing before the Referee. The plaintiff has not conducted these proceedings with due despatch and the time has come to deal with the matter summarily pursuant to UCPR r 12.7.

In those circumstances, I make the following orders:

I also order that the plaintiff pay the defendant's costs of the proceedings.