VoR Environmental Australia Pty Limited v Taset Inc. (No 2)

• Jurisdiction: Australia Federal only
• Judge: LEE J
• Judgment Date: 17 June 2019
• Neutral Citation: [2019] FCA 1094
• Date: 17 June 2019
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

VoR Environmental Australia Pty Limited v Taset Inc. (No 2) [2019] FCA 1094

File number:	NSD 585 of 2017
Judge:	LEE J
Date of judgment:	17 June 2019
Catchwords:	PRACTICE AND PROCEDURE – where appointment of referee consistent with the overarching purpose pursuant to s 37M of the Federal Court of Australia Act 1976 (Cth) – adoption of referee reports – relevant principles – where adoption is opposed – order for the adoption of referee reports made
Legislation:	Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth) Evidence Act 1995 (Cth) s 56(1) Federal Court of Australia Act 1976 (Cth) Pt VB, ss 37M(3), 37P(2), 54A, 54A(3) Federal Court Rules 2011 (Cth) rr 28.65(7), 28.67(1)(a), 28.67(1)(a), 35.13
Cases cited:	CPB Contractors Pty Limited v Celsus Pty Limited (formerly known as SA Health Partnership Nominees Pty Ltd) (No 2) [2018] FCA 2112; (2018) 364 ALR 129 Kadam v MiiResorts Group 1 Pty Limited (No.4) [2017] FCA 1139; (2017) 252 FCR 298 VoR Environmental Australia Pty Limited v Taset Inc. [2017] FCA 541 ; Chocolate Factory Apartments v Westpoint Finance [2005] NSWSC 784 Super Pty Limited v SJE Formwork Pty Limited (1992) 29 NSWLR 549
Date of hearing:	17 June 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Regulator and Consumer Protection
Category:	Catchwords
Number of paragraphs:	41
Counsel for the Applicant:	Mr J C Conde
Solicitor for the Applicant:	Allens
Counsel for the Respondent:	Mr J C Hewitt
Solicitor for the Respondent:	The Hills Legal House

ORDERS

		NSD 585 of 2017
BETWEEN:	VOR ENVIRONMENTAL AUSTRALIA PTY LIMITED Applicant
AND:	TASET INC. Respondent

JUDGE:	LEE J
DATE OF ORDER:	17 JUNE 2019

THE COURT ORDERS THAT:

1. Pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth), each of the following reports of the Referee, Dr David Tawfik, is adopted in whole:

   1. “Referee Report” dated 11 December 2018;

   2. “Referee Supplementary Report” dated 30 May 2019.

2. The costs of and incidental to the interlocutory hearing on 8 March 2019 are costs in the cause.

3. The respondent is to pay the applicant’s costs of and incidental to the interlocutory hearing on 17 June 2019.

4. The respondent is to pay $17,855.75 to the applicant, being the applicant’s share of the costs of the “Referee Supplementary Report” dated 30 May 2019.

5. Pursuant to r 35.13 of the Federal Court Rules 2011 (Cth), the time for the respondent to file any application for leave to appeal from these orders is extended to 14 days after the date that the Court publishes its reasons for judgment for these orders.

6. The proceeding is listed for a case management hearing before Justice Jagot at 9.30am on 23 July 2019.

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

REASONS FOR JUDGMENT

Revised from the transcript

LEE J:

A INTRODUCTION

1. This modest commercial dispute commenced over two years ago. The material before me suggests the claim is for less than $1 million and, as I explained in VoR Environmental Australia Pty Limited v Taset Inc. [2017] FCA 541 at [4]-[6]:

Put generally, the applicant and the respondent are manufacturers and suppliers of water and waste-water related infrastructure. The applicant alleges that, in 2015, it contracted with the respondent for it to design, document, supply, deliver and otherwise procure various significant items of equipment. After delivery of the equipment to Fremantle, the respondent assisted in providing installation at a remote mining site located in a coastal area of Western Australia. The installation, it is alleged, involved the respondent making various recommendations as to the installation of the equipment.

Subsequently, a dispute arose between the parties concerning alleged problems arising from the equipment including an alleged improper preparation of paint coatings, a lack of bracing support and related matters. There were various subsequent dealings between the parties including a proposal made by the respondent that the equipment would be rectified by a particular time. Ultimately, the applicant took the view that it was forced to rectify the equipment itself and alleges that it suffered loss and damage by reason of taking such rectification steps and incurred other related costs.

The relief sought by the applicant includes statutory compensation pursuant to s 236 of the Australian Consumer Law (ACL) or, alternatively, damages at common law.

2. On 17 May 2017, I granted leave to serve the originating process by causing a letter of request under the Hague Convention: see Convention 20 ‘Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters’ of the Hague Convention, Art 1. The proceeding, at that time, was listed for a case management hearing on 21 July 2017. On that day, Mr Conde, who appears for the applicant, said the following (T14.35-40):

The only other matter I wish to flag today, which is not seeking an order, but is to address the question of a referee, in that if and when this matter progresses, [it is] one that involves at the moment, pleaded losses of $1 million. … I just wish to raise… that we do see benefit in the possibility of a referee, because a matter of this nature most likely will need somebody with expertise travelling to Western Australia and going to the sight and so on.

3. This approach was commendably consistent with the requirements of Pt 8.5(e) of the Central Practice Note (CPN-1), which requires parties to give early attention to whether or not an order should be made for questions to be referred to a referee for an inquiry and report in appropriate matters: see also Pt 6 of the Expert Evidence Practice Note (GPN-EXPT); s 54A of the Federal Court of Australia Act 1976 (Cth) (Act) and Div 28.6 of the Federal Court Rules 2011 (Cth) (FCR). Eventually, both parties agreed that it was appropriate that there be a reference, although the position of the respondent was that this non-opposition was subject to two preliminary objections being: (a) the timing of the reference; and (b) whether or not documentary disclosure should occur prior to the reference commencing.

4. One matter in respect of which there was no dispute was the identity of the proposed referee. Dr Tawfik, who is a chartered engineer, was agreed to be appropriate. Dr Tawfik is a highly specialised expert in the field of mechanical engineering and has undertaken numerous investigations and expert advisory assignments for the legal, commercial and insurance sectors. Dr Tawfik has conducted investigations to determine the root cause of asset failures, industrial accidents, construction disputes, product defects and component damage. The parties were correct to conclude that his specialised expertise made Dr Tawfik both capable and qualified to reach an objective conclusion as to the matters the subject of the reference.

5. On 15 June 2018, I made orders facilitating the reference. As is not unusual in matters of this sort, one of those orders required Dr Tawfik to consider and implement such manner of conducting the reference that would, without undue formality or delay, enable a just, efficient, timely and cost-effective resolution of the reference. Broad powers were given to the referee to make enquiries in person, by telephone or in writing and have direct communication (without the intervention of solicitors) with persons whom the referee considered may be of assistance in conducting the reference. Such flexible and ample...