Max Build Pty Ltd v The Owners – Strata Plan No 54026 (No 3)

1. [1]

   This is the third interlocutory judgment this year in these proceedings that commenced in September 2023. Save for these interlocutory stoushes, the matter has not ostensibly progressed.

2. [2]

   Earlier this year, Rees J made preliminary rulings that a large part of the defendant Owners Corporation’s expert evidence was inadmissible: Max Build Pty Ltd v The Owners – Strata Plan No 54026 [2025] NSWSC 533 and Max Build Pty Ltd v The Owners – Strata Plan No 54026 (No 2) [2025] NSWSC 680. Now this judgment concerns reasons why the OC failed in most of its application for various relief.

3. [3]

   By way of background, Max Build Pty Ltd is a remedial builder that was engaged by the OC in November 2020 to undertake remedial building works primarily to the façade of a heritage building in Ultimo, New South Wales.

4. [4]

   The OC engaged TOP Consulting Group (NSW) Pty Ltd to administer the contract with Max Build and to provide engineering services.

5. [5]

   Max Build fell into dispute with the OC because it considered there were pre-existing roof defects causing water leakage that needed to be remedied, by way of variations, before the contract works could be carried out.

6. [6]

   TOP did not issue directions with respect to the variations, which Max Build assumed was at the OC’s direction.

7. [7]

   In its List Response, the OC alleges that the water leakage was “caused by [Max Build’s] failure to properly protect the works as required under the Contract” and therefore Max Build was not entitled to a variation for any alleged pre-existing roof defects and by its conduct repudiated the Contract, entitling the OC to terminate the Contract. Max Build claims the termination was wrongful and seeks loss of bargain damages.

8. [8]

   The OC has also cross-claimed against:

   1. (1)

      Max Build, for alleged breaches of contract and restitution of money paid to it; and

   2. (2)

      TOP, for poorly performing the duties of superintendent under the Max Build contract “as agent” for it and engineering works.

OC’s current notice of motion

1. [9]

   The OC sought orders for:

   1. (1)

      Max Build to provide further and better particulars of parts of its List Statement;

   2. (2)

      TOP to produce documents it holds as the OC’s agent, or general discovery or discovery of particular categories of documents because there are “exceptional circumstances” within the meaning of Practice Note SC Eq 11.

2. [10]

   This motion caused the production of three court books, detailed written submissions and almost two and a half hours of oral submissions on a busy list day. At the end of the oral hearing, I made the following relevant orders:

3. [11]

   After those orders were made, the OC’s counsel, Ms Ashworth, sought reasons beyond those given in discussion with counsel, which are provided below.

Reasons concerning request for particulars

1. [12]

   It is trite that the purpose of particulars is to “save expense in preparing to meet a case which may never be put”: McSpedden v Harnett (1942) 42 SR (NSW) 116 at 119. They are necessary to enable a party to identify the facts alleged against it: see eg Bailey v Commissioner of Taxation (Cth) (1977) 136 CLR 214.

2. [13]

   A request for particulars cannot be a request for evidence; provided alleged material facts are pleaded, then it is not for a defendant to demand detailed particulars.

3. [14]

   A primary reason why I considered inappropriate the broad range of further particulars being sought was the fact that, in December 2023, the OC filed an extensive and detailed List Response, ostensibly without the need of the particulars now sought.

4. [15]

   Further, the OC filed and served evidence, including of two experts, in response to Max Build’s claim. This demonstrates that the OC has known the case it needs to answer and has attempted to answer it. Merely because much of the OC’s evidence was ruled inadmissible on advance rulings on evidence does not somehow demonstrate that the OC requires particulars or does not understand the case to be met. Further, merely because at the beginning of the year new counsel was briefed does not give a party licence to seek further particulars when the proceedings have advanced as far as they have here, and where a reading of the List Statement makes tolerably clear Max Build’s case.

5. [16]

   As Practice Note SC Eq 3 makes plain, a list statement is not a pleading, but is intended to communicate the nature of the allegations (with adequate particulars) without formality, to assist with the just, quick and cheap resolution of the proceedings. Had the OC considered Max Build’s List Statement inadequate in that regard, then that might have been raised in the last two years; it was not.

6. [17]

   It is therefore extraordinary that the OC now asserts that it requires further and better particulars to understand the case against it. This is particularly so when the OC proffered it can finalise its new evidence within a few months.

7. [18]

   During the hearing, it also became apparent that some of the OC’s requests for particulars were answered within Max Build’s submissions, where particular parts of evidence were identified. Further clarification was given during oral submissions which made unnecessary any determination of whether an order for some particulars was necessary. It is unclear why these matters were not resolved through counsel to counsel discussions.

8. [19]

   I did consider in the interests of efficient case management that Max Build provide some further particulars concerning the following:

   1. (1)

      Max Build will at some point need to identify in submissions the particular heads of loss and damage said to have been caused by the OC’s particular breaches, termination of the contract and alleged misleading or deceptive conduct. It is not a difficult task for Max Build to identify those various heads of damage now, in circumstances where its evidence in chief is complete.

   2. (2)

      Max Build claims that the OC “failed to give” it access to “portions” of the building, which caused it not to be able to complete certain works. Those portions of the building are not identified. I note that the OC has denied any prevention of access without requiring any further particulars, but identification of those portions of the building is not an onerous task for Max Build.

9. [20]

   Those orders for particularisation are made to promote the efficient progress of the proceeding, rather than as a matter of strict “pleading”; such disputes ought to be avoided. The OC must progress its evidence promptly in circumstances where the last twelve months have not seen significant progress in the matter, which ought to be resolved as quickly as possible, and without further expensive interlocutory disputes.

Reasons for refusing the production of documents or discovery

1. [21]

   The OC also sought documents from TOP on any of the following bases:

   1. (1)

      TOP was the OC’s agent for some tasks under the contract with Max Build, and therefore it was said the OC had a “right” to all documents “created or obtained by it in connection with … remedial works…”.

   2. (2)

      General discovery of all the same documents, because there were “exceptional circumstances” as required by Practice Note SC Eq 11.

   3. (3)

      Specific discovery of five and a half pages of various categories of documents, again because it was said there were “exceptional circumstances”.

2. [22]

   Orally, Ms Ashworth belatedly conceded her submissions were too broad in alleging that the OC was entitled to all documents held by TOP in relation to the building works, because in fact, the agency relationship did not cover all of TOP’s work on the site; instead, what was sought was only the documents “prepared or obtained in the course of” or “within the scope of” the agency, which Ms Ashworth contended were contained in a OneDrive folder maintained by TOP.

3. [23]

   Upon the documents being sought pursuant to the motion, TOP claimed a lien over the documents on the basis that it has not been paid by the OC. Ms Ashworth submitted, I consider without appropriate elaboration, that TOP has brought other proceedings “as an abuse of process”, in which it seeks payment and asserts a lien. I accept TOP’s submission that it was only necessary for it to raise the lien in these proceedings when its documents were being sought.

4. [24]

   Ms Ashworth submitted that it was not necessary for me to determine whether the lien is validly asserted, which would entail a determination of the scope of the agency; without doing so, I do not consider it open to me to order the production of documents under the agency agreement.

5. [25]

   I do not accept it would be appropriate to order discovery generally or in relation to specific categories for the following reasons, which also demonstrate that there are not “exceptional circumstances”.

6. [26]

   First, Ms Ashworth conceded that “in due course” the documents “would be” necessary or ordered to be produced. On that basis the application appears premature. However, Ms Ashworth persisted with the submission that the documents were necessary “in the interests of justice” without clearly explaining why the OC requires TOP’s documentation to attempt for a second time to file evidence in defence of Max Build’s case, or to prosecute its own case against TOP. Ms Ashworth also sought production of the full suite of documents contained in TOP’s “OneDrive folder”, even if some or many of those documents were beyond the scope of the agency, on the basis that total production rather than TOP sorting relevant documents would supposedly reduce the costs the parties would incur. That approach is fundamentally misconceived. I do not accept that using the discovery process to require wholesale production of potentially irrelevant (and possibly commercially sensitive or privileged) documents would further the overriding purpose.

7. [27]

   Secondly, the OC has made no attempt to obtain the documents from any other source, such as from Max Build. Further, Ms Ashworth accepted that no enquiries had been made of the relevant (compulsory) strata manager, although hand-over documents had been obtained. Ms Ashworth asserted that only TOP will have the full suite of documents relating to the building works. However, that is not the test. The OC must demonstrate why it requires the documents to progress its evidence in chief against TOP and/or defend Max Build’s claim against it, which it has not done.

8. [28]

   Thirdly, the relevance of the documents sought was not apparent. It is not the case that Max Build sues the OC for the vicarious liability of TOP. Instead, it is pleaded that TOP made certain decisions, for example, that the roof variation work needed to be carried out, yet the OC refused to give instructions for that work to be carried out. It was not explained:

   1. (1)

      Why any of TOP’s documentation would be relevant to whether the OC’s refusal to give a direction for a variation was a breach of contract.

   2. (2)

      How those documents might speak to the representations made by TOP, which the OC admits were made, but asserts were not misleading or deceptive.

9. [29]

   Fourthly, the categories of documents sought were extremely broad and no attempt was made to narrow them.

10. [30]

    Fifthly, in circumstances where Ms Ashworth accepted it was not appropriate for me to determine TOP’s claim for a lien over the documents, and therefore the scope of the agency, I consider that a strong discretionary reason not to order discovery at this stage of the proceedings.

Reasons for order OC pay TOP’s costs of the motion forthwith

1. [31]

   Ms Ashworth accepted that the OC ought to pay TOP’s costs of the motion, but resisted an order that they be payable forthwith with this submission:

2. [32]

   I rejected that submission and made a forthwith order for the following reasons.

3. [33]

   The guiding principle in exercising the discretion to make a forthwith costs order is whether, in all the circumstances, the demands of justice require it: Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 at [16]-[18] (Bathurst CJ, Beazley P, Meagher JA); Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1 at [7]-[8] (Barrett J). Relevant factors include whether: (1) the proceedings giving rise to the order are sufficiently self-contained and discrete from the main proceeding yet to be heard to make it just for an actual payment to be made in the meantime; (2) there has been some unreasonable conduct by the party against whom the costs were ordered (which does not require there to be an abuse of process or misconduct: Ashwood v Ashwood [2023] NSWSC 208 at [95] (Parker J)); and (3) the conclusion of the proceedings is likely some way off: Pavlovic at [15]; Morningstar at [11]-[13].

4. [34]

   Here, it is self-evident that the motion was a discrete part of the proceedings, and the final determination of the proceedings is some time away. I also consider that the motion concerning TOP was misconceived, for the reasons identified above, and has led to further delay in progressing the matter to hearing, for example, by the OC finalising its evidence.