Federal Court of Australia

Shafston Avenue Construction Pty Ltd, in the matter of CRCG-Rimfire Pty Ltd (subject to deed of company arrangement) v McCann (No 2) [2020] FCA 1444

ORDERS

THE COURT ORDERS THAT:

1.    Both grounds of objection to the tender of [23] and [24] and annexure “MGH-1” of Mr Gaskin-Harris’ affidavit made 17 July 2020 are upheld.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

EX TEMPORE REASONS FOR JUDGMENT

REEVES J:

1    Mr Peter Dunning QC, counsel for the plaintiffs, has sought to tender an affidavit by Mr Mark Gaskin-Harris made on 17 July 2020. Mr Gaskin-Harris is a Development Manager in the employ of Devcorp Pty Limited as well as a registered architect (non-practicing) with approximately 23 years’ experience in the property development and construction industries.

2    Mr David Turner, counsel for the first to third defendants, has objected to the tender of [23] and [24] of that affidavit, together with annexure “MGH-1”. Those paragraphs are as follows:

23.    Accordingly, to assist the court’s understanding of the costs likely to be incurred in relation to the Outstanding Remediation Works, on 15 July 2020, Devcorp engaged Ripple Capital Solutions, a firm of quantity surveyors[,] to provide an estimate of the order of cost to rectify the Condensation Defects (Ripple Estimate). Annexed at pages 453 to 462 of “MGH-1” is a copy of the Ripple Estimate, which discloses that the estimated cost of the Outstanding Remediation Works is approximately $3,263,200.

24.    On the basis of my experience in the construction and development industry, I believe that the estimated cost in the Ripple Estimate is a reasonably accurate estimate, having regard to the extensive scope to mitigate the risk of further mould growth within the building which, if not rectified, would create a significant health and safety risk for residents of the Lincoln Street Property.

3    The “Ripple Estimate” referred to in [23] and [24] of Mr Gaskin-Harris’ affidavit is annexed at pages 453-462 of “MGH-1”. Those pages consist of a letter headed “LINCOLN ON THE PARK (54 LINCOLN STREET, STONES CORNER) ORDER OF COST ESTIMATE”. That letter, dated 17 July 2020, is addressed to Mr Gaskin-Harris and appends two documents respectively titled “Project Summary” and “Cost Summary”. The former provides an overview of the total estimated rectification costs to the Lincoln Street property, and the latter itemises those costs under the headings “Mechanical Services”, “Windows and Associated Works”, “Mould Remediation Works”, “Access” and “Decanting”.

4    It is common ground that these paragraphs and the corresponding pages of the annexure contain the opinions of a firm called Ripple Capital Solutions (Ripple) about the costs of rectifying defects in one of the buildings at the centre of this dispute.

5    Mr Turner has objected on two grounds. First, that this material contains hearsay evidence of the opinions of Ripple about the costs of rectifying the defects to the building concerned. Secondly, that the documents in annexure “MGH-1” cannot be tendered as business records because of the provisions of s 69(3)(a) of the Evidence Act 1995 (Cth) (the Evidence Act).

6    The hearsay rule exclusion in the Evidence Act is expressed in s 59. That section appears in Chapter 3.2. The balance of that chapter sets out a number of exceptions to that exclusion. One of those exceptions is expressed in s 69, namely the business records exception to the hearsay rule exclusion.

7    Chapter 3.3, which begins with s 76, deals separately with opinion evidence and contains a number of provisions in relation thereto.

8    It has been held that the expression “asserted fact” which appears several times in the hearsay rule exceptions mentioned above extends to include opinion (see Ringrow Pty Ltd v BP Australia Ltd (2003) 130 FCR 569; [2003] FCA 933 at [18] per Hely J, Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; [2012] FCA 1355 at [63]-[65] per Perram J and Jadwan Pty Ltd v Rae & Partners (A Firm) (No 3) [2017] FCA 1045).

9    However, in Lithgow City Council v Jackson (2011) 244 CLR 352; [2011] HCA 36, the plurality held (at [19]) that a statement of opinion in a business record must comply with the provisions of, among others, s 76 of the Evidence Act as a pre-condition to its admission as evidence.

10    It follows that, to the extent that annexure “MGH-1” contains the opinions of Ripple about the cost of the remedial work to this building, it cannot be tendered under s 69 of the Evidence Act as a business record. That is so because the requirements of s 76 of the Evidence Act have not been complied with in respect of it. As well, the requirements of r 23 of the Federal Court Rules 2011 (Cth) in relation to expert evidence have not been complied with. This latter point is important in this proceeding because, in the lead up to this trial, there has been a series of interlocutory disputes involving unsuccessful attempts by the plaintiffs to rely upon opinion evidence of this kind.

11    Even if I am not correct in this conclusion, I consider the tender of these pages of annexure “MGH-1” and the related paragraphs of Mr Gaskin-Harris’ affidavit are prevented by s 69(3)(a) of the Evidence Act. At [17]-[19] of his affidavit, Mr Gaskin-Harris sets out the background to the remediation works issue. He then states at [20]-[22] that:

20.    Given that the Outstanding Remediation Works remain incomplete, Lincoln Street has not directly incurred cost in relation to those works.

21.    The significant nature of the Condensation Defects did not become apparent until approximately early 2020.

22.    Accordingly, I understand that there is no evidence before the court of the estimated cost of rectifying the Condensation Defects.

12    Mr Gaskin-Harris then goes on to make the statements in [23] and [24] set out earlier (at [2] above). These passages, particularly in [22] and the first sentence of [23], make it clear, in my view, that annexure “MGH-1” was obtained by the plaintiffs in connection with this proceeding.

13    On this aspect, I reject Mr Dunning’s submission that s 69(3)(a) only applies where the sole, or only, purpose of the tender is in connection with the proceeding. It has been held that, even if a document is prepared with several purposes in view, it is still a document prepared in connection with litigation if a proceeding has begun and at the time the document is prepared it is recognised as being relevant to an issue in that proceeding (see Vitali v Stachnik [2001] NSWSC 303 at [18] and Timms v Commonwealth Bank of Australia [2003] NSWSC 576 at [15] per Barrett J.

14    For these reasons, I uphold both grounds of objection to the tender of the two paragraphs of Mr Gaskin-Harris and pages 453-462 of annexure “MGH-1” thereto.

Associate:    

Dated:    15 October 2020

SCHEDULE OF PARTIES