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  • Unreported Judgment

UI International Pty Ltd v Interworks Architects Pty Ltd

 

[2006] QCA 434

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

U.I. INTERNATIONAL PTY LTD ACN 070 639 422

(plaintiff/appellant)

v

INTERWORKS ARCHITECTS PTY LTD
ACN 087 985 402

(first defendant/first respondent)

PAUL THOMAS SHEPPARD

(second defendant/second respondent)

MOSTIA CONSTRUCTIONS PTY LTD ACN 010 608 009

(third defendant/third respondent)

GROGAN RICHARDS PTY LTD ACN 006 346 087

(fourth defendant)

MOSTIA PROJECT MANAGEMENT PTY LTD
ACN 099 777 223

(fifth defendant)

ROHAN LEIGH WOODFORTH

(sixth defendant)

REDLAND SHIRE COUNCIL

(seventh defendant)

FILE NO/S:

SC No 10390 of 2004

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

DELIVERED ON:

3 November 2006

DELIVERED AT:

Brisbane

HEARING DATE:

12 October 2006

JUDGES:

Williams and Keane JJA, and Mackenzie J

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER:

1.  Appeal dismissed

2.  Plaintiff to pay the first, second and third defendants' costs of the appeal

CATCHWORDS:

PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PLEADING - STATEMENT OF CLAIM - plaintiff developed land by construction of buildings - defendants engaged by plaintiff to provide services in connection with that development - plaintiff claims defendants' negligence or breach of contract led to development being adversely affected by structural defects - plaintiff seeks damages quantified on the footing that the development will be demolished and rebuilt - plaintiff no longer owns land - plaintiff's statement of claim does not explain why or how demolition and rebuilding could now be achieved - defendants applied to learned primary judge to have parts of plaintiff's statement of claim struck out - learned primary judge struck out a number of paragraphs and gave plaintiff leave to amend statement of claim - use of phrase "and/or" in statement of claim - whether plaintiffs may appeal against preferences expressed by learned primary judge in reasons for judgment - whether the plaintiff should be required to address, as part of the case made by it, the means by which it says that the obstacle to demolition and rebuilding, that is apparent on the face of its pleading, will be overcome

Belgrove v Eldridge (1954) 90 CLR 613, cited

COUNSEL:

R N Wensley QC, with C C Heyworth-Smith, for the plaintiff/appellant

L F Kelly SC, with D P de Jersey, for the first and second defendants/respondents

R A Holt SC, with S E Brown, for the third defendant/respondent

SOLICITORS:

Creswicks Lawyers for the plaintiff/appellant

Thynne & Macartney for the first and second defendants/respondents

James Byrne & Rudz for the third defendant/respondent

[1]  WILLIAMS JA:  I have had the advantage of reading the reasons for judgment of Keane JA and there is nothing I wish to add thereto.  For those reasons the appeal should be dismissed with costs. 

[2]  KEANE JA:  The plaintiff developed land at Cleveland by the construction of buildings for residential, retail and office purposes.  The first, second and third defendants ("the defendants") were engaged by the plaintiff to provide services in connection with that development.  The plaintiff claims that, by reason of the negligence or breach of contract of the defendants, the development is adversely affected by structural defects.  The plaintiff sues for damages, and quantifies much of the loss which it claims to recover from the defendants on the footing that the development will be demolished and rebuilt. 

[3] It appears from the plaintiff's statement of claim that the plaintiff no longer owns the land.  The development is now the subject of a layered community title scheme in which the plaintiff owns a small number of lots.  The plaintiff's statement of claim does not explain why or how the demolition and reconstruction of the development could now be achieved. 

[4] The defendants applied to have parts of the statement of claim struck out.  Before the learned primary judge, the defendants' application enjoyed a measure of success, and a number of paragraphs of the statement of claim were struck out.  Relevantly for this appeal, those paragraphs included paragraphs 16, 20 and 21(c).  The plaintiff was also given leave to amend its statement of claim in relation to the matters presently pleaded in these paragraphs in accordance with his Honour's judgment.

[5] The learned primary judge also ordered the plaintiff to file and serve an amended statement of claim which:

"pleads the facts and circumstances from which it is likely that all owners of a lot within any relevant community title scheme will agree to the demolition and rebuilding of the development which is the subject of the allegations in paragraph[s] 74, 75, 76, 81 and 82 of the statement of claim, or from which it is likely the District Court is likely to make such orders as are necessary to enable the plaintiff to effect that demolition and rebuilding." 

I pause here to note that the reference to orders of the District Court is to orders which might be made under s 78 and s 86 of the Body Corporate and Community Management Act 1997 (Qld) to facilitate the demolition and rebuilding of the development.

[6] The plaintiff appeals against the striking out of paragraphs 16, 20 and 21(c) of the statement of claim and the order for the filing and serving of an amended statement of claim which pleads the facts on the basis of which it is likely the demolition and rebuilding of the unsound parts of the development can be achieved.

Paragraphs 16, 20 and 21(c) of the statement of claim

[7] The plaintiff pleaded that "the First Defendant and/or the Second Defendant would act as the plaintiff's architect and/or project manager and/or principal consultant for the purposes of the redesign and of the development."  The learned primary judge ruled that these allegations were embarrassing because of the use of the conjunction "and/or".  That the obligations were embarrassing had been conceded by the plaintiff in argument.  On that basis, there can be no sensible complaint about his Honour's order striking these paragraphs out and granting leave to replead. 

[8] His Honour went on to comment upon the use in the pleading of the expression "principal consultants" or "project managers".  His Honour said:[1]

 

"In my view it is preferable for the pleading to avoid this description of the alternative roles of the architects which is the subject of their present complaint [that complaint being the complaint of the first and second defendants].  Because it is not said that the architects orally or in writing offered to act specifically as project managers or as 'principal consultants', the use of those terms in the pleading tends to distract from the terms of the contract.  It encourages the assessment of the architects' performance by reference to obligations which may not be the same as the ones to which they agreed." 

[9] The plaintiff asserts that this aspect of his Honour's ruling was not the subject of argument and is erroneous, principally because the particulars of the terms of the engagement of the first and second defendants refer to a "5% fee … for the management of the project".  The plaintiff is concerned that his Honour's reasoning is apt to deny it the possibility of pleading that the first and second defendants were engaged by the plaintiff as project managers.  The plaintiff does not contend that the paragraphs in question should not have been struck out.

[10]  The orders that were made allowed the plaintiffs the opportunity to replead. 

[11]  The first and second defendants do not contend that the plaintiff may not assert that the first and second defendants were engaged as "project managers". 

[12]  To the extent that the plaintiff's concern is derived from obiter comments in the reasons of the learned primary judge, this Court could make no order to vindicate the plaintiff's concern even if there was substance in the plaintiff's concern.  Appeals must be brought against orders, and not against obiter comments about judicial "preferences" in the reasons for those orders.  The plaintiff's appeal on this issue is pointless. 

Paragraphs 74, 75, 76, 81 and 82 of the statement of claim

[13]  In relation to the second part of the appeal, the learned primary judge concluded:[2]

 

"However, the plaintiff does plead that it 'will suffer loss and damage in respect of the cost of demolishing the development' (Paragraph 81 of the statement of claim).  The particulars of that allegation refer to an accountant's report, which is in terms suggesting that the plaintiff will undertake this work.  There is an implicit allegation that the agreement of owners will be obtained, which is indicated by paragraph 82.  But the likelihood that each and every owner will agree to the demolition of this development is not so obvious that the plaintiff need not explain it, by pleading the facts and circumstances from which it comes.  Those facts and circumstances should be pleaded.  And if the plaintiff has already the agreement of some owners, that fact should be pleaded and with proper particulars.

     There is no evidence (either way) as to the likelihood of the agreement of the owners.  The implicit assertion that their agreement will be obtained is not so obviously groundless that it should be struck out, at least at present, on the ground that it has no prospects.

     What I have regarded as the implicit allegation as to the owner's agreement should be made explicit.  The plaintiff should be required to plead its case as to whether it has obtained the consent of any owners and its case as to the likelihood of obtaining their consent or the approval of the District Court, by reference to the facts matters and circumstances from which that likelihood is alleged.  The plaintiff should have some reasonable time in which to amend its pleading to add those allegations.  But absent any amendment, it is my view that it would be appropriate to strike out paragraphs 74, 75, 76, 81 and 82 of the statement of claim, because to allow the plaintiff to plead those matters without revealing its case (if any) as to how it could demolish the buildings would prejudice a fair trial: r 171(1)(b) of the Uniform Civil Procedure Rules.  I would allow twenty-eight days from this judgment."

[14]  In this Court, the plaintiff contends that the learned primary judge erred in requiring the plaintiff to plead the facts which would show how it could and would obtain the agreement of lot owners or the order of the District Court to the demolition of the development.  The plaintiff contends that these facts are not a necessary part of the plaintiff's cause of action against the defendants.  In this regard, the plaintiff submits it is sufficient that demolition and reconstruction is a reasonable method of rectifying the defects in the construction work for which the defendants were responsible.  Moreover, the plaintiff submits that the circumstance that demolition and reconstruction may, in fact, not occur because the plaintiff has sold the development, is immaterial to the plaintiff's claim for damages. 

[15]  In support of these contentions, the plaintiff advances arguments which seek to rely upon the principles according to which the cost of demolition and reconstruction of defective building work have been held to afford the proper measure of damages recoverable from those responsible for the defects.  The decision of the High Court in Bellgrove v Eldridge[3] is the leading authority on these principles.

[16]  The defendants join issue with the plaintiff's arguments in relation to principle.  More importantly for present purposes, the defendants also submit that the position taken by the plaintiff on this appeal involves an attempt to circumvent a difficulty which arises from the terms in which the plaintiff has chosen to plead its case.  On this view, it is unnecessary to resolve the issues of legal principle which the plaintiff seeks to agitate.  There is much force in this submission. 

[17]  In paragraphs 5 and 6 of the plaintiff's statement of claim, it is stated that the plaintiff now owns only a few of the lots in the community titles scheme which now incorporates the development in question.  In paragraph 74 of the plaintiff's statement of claim, it is said that: 

 

"[t]he only and/or the only reasonable method of rectifying the reduced life expectancies, the defects and the structural deficiencies pleaded in paragraph 57 above is to demolish and rebuild the development."

[18]  Paragraph 75 pleads the "estimated reasonable cost of rebuilding was $28,746,471".  Paragraph 76 pleads that the plaintiff "has suffered loss and damage in respect of the cost of rebuilding the development in the sum of $28,746,471 and claims that sum". 

[19]  Paragraph 81 pleads that "the Plaintiff will suffer loss and damage in respect of the cost of demolishing the development … in the sum of $2,285,000 and claims that sum". 

[20]  Paragraph 82 recognised the need for the plaintiff to set off against its claim for damages any benefit which may accrue to the plaintiff:

 

"[a]rising out of the rebuilding of the development as contemplated by paragraphs 74, 75 and 76 above, and assuming that any compensation arrangement with current third party unit owners and original third party purchasers does not entail the non-cash return of a properly completed residential property unit …"

[21]  Whatever the possible theoretical bases for any cause of action which the plaintiff might seek to agitate against the defendants, it is undeniable, as Senior Counsel for the plaintiff conceded, that the plaintiff's amended statement of claim does advance a case in these paragraphs which involves an actual - as opposed to hypothetical or fictional - demolition and reconstruction, at the plaintiff's cost, of buildings which are part of the development. 

[22]  It is apparent from the terms of the plaintiff's own pleading that it is not in a position to demolish and rebuild the development.  As a result, the plaintiff's case, as presently pleaded, is incoherent and self-contradictory.  In the absence of a pleading of facts apt to explain how it is that demolition and rebuilding of buildings on land owned by others can be achieved, the plaintiff's case, as presently pleaded, is embarrassing.  There is, therefore, no point in the plaintiff's contention that it should not be required to address, as part of the case made by it, the means by which it says that the obstacle to demolition and rebuilding, apparent on the face of its own pleading, will be overcome. 

[23]  That conclusion is sufficient to justify the rejection of this aspect of the plaintiff's appeal.  As I have said, the plaintiff sought to agitate legal arguments based on Bellgrove v Ellridge in relation to the substantive rights of the parties in support of this aspect of the plaintiff's claim against the defendants.  In my opinion, it is not necessary for the disposal of this appeal to enter upon the resolution of these arguments.  This is, after all, an appeal concerning the sufficiency of the plaintiff's pleading of the case it seeks to make.  The plaintiff might seek to make a different case, but that does not mean that it is not obliged to plead coherently the case which it has actually sought to make.  The plaintiff has the opportunity of pleading a sufficient case to sustain this aspect of its claim.  It is sufficient to dismiss the appeal. 

[24]  On the question of costs, the plaintiff raised the point that, before commencing the appeal, it redrafted the allegations formerly found in paragraphs 16, 20 and 21(c) of the statement of claim and sought from the first and second defendants an indication of their willingness to accept the sufficiency of the plaintiff's new pleading on the basis of the redrafted versions of those individual paragraphs.  The first and second defendants declined to confirm that they had no objection to these parts of the new pleading until the full pleading was delivered.  The plaintiff claims that the costs of the pointless appeal which it brought in relation to these paragraphs would have been saved if the first and second defendants had responded promptly and affirmatively to the plaintiff's request.  It is, to say the least, arguable that the position taken by the first and second defendants was not unreasonable.  More importantly, however, the argument about paragraphs 16, 20 and 21(c) occupied little of the Court's time on the appeal in comparison with the other argument.  There is, in my view, no sufficient reason to decline to apply the usual rule that the costs of the appeal should follow the event.

Conclusion and orders

[25]  The appeal should be dismissed.

[26]  The plaintiff should pay the defendants' costs of the appeal. 

[27]  MACKENZIE J:  I agree that the appeal should be dismissed for the reasons given by Keane JA.

Footnotes

[1] UI International Pty Ltd v Interworks Architects Pty Ltd & Ors [2006] QSC 079 at [45].

[2] UI International Pty Ltd v Interworks Architects Pty Ltd & Ors [2006] QSC 079 at [32] - [34] (citation footnoted in original).

[3] (1954) 90 CLR 613.

Close

Editorial Notes

  • Published Case Name:

    UI International P/L v Interworks Architects P/L & Ors

  • Shortened Case Name:

    UI International Pty Ltd v Interworks Architects Pty Ltd

  • MNC:

    [2006] QCA 434

  • Court:

    QCA

  • Judge(s):

    Williams JA, Keane JA, Mackenzie J

  • Date:

    03 Nov 2006

Litigation History

No Litigation History

Appeal Status

No Status