Complete Constructions Australia Pty Ltd v Jeff Manny Pty Ltd [2011] ACTSC 99 (10 June 2011)

Last Updated: 14 June 2011

COMPLETE CONSTRUCTIONS AUSTRALIA PTY LTD v JEFF MANNY PTY LTD

[2011] ACTSC 99 (10 June 2011)

PRACTICE AND PROCEDURE – pleadings – defence and counterclaim – particulars – order that particulars be furnished within specified period – particulars not furnished as ordered – counterclaim dismissed with costs

No. SC 242 of 2010

Judge: Master Harper

Supreme Court of the ACT

Date: 10 June 2011

IN THE SUPREME COURT OF THE )

) No. SC 242 of 2010

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: COMPLETE CONSTRUCTIONS AUSTRALIA PTY LTD

Plaintiff

AND: JEFF MANNY PTY LTD

Defendant

ORDER

Judge: Master Harper

Date: 10 June 2011

Place: Canberra

THE COURT ORDERS THAT:

1. the defendant’s counterclaim be struck out.

2. the plaintiff’s costs of the application be paid by the defendant.

1. This is an application by the plaintiff for an order that the defence and counterclaim be struck out, or alternatively, that such parts of the defence and counterclaim be struck out as are reasonable in the circumstances. On the hearing of the application, counsel for the plaintiff also sought orders for summary judgment and for the winding up of the defendant company.

2. The action was commenced by originating claim in May 2010. The plaintiff claims an amount of $167,313.56 for debt plus interests and costs. The plaintiff asserts in the statement of claim that it was engaged by the defendant to provide a fitout for a construction project, the Oatley Court Medical Centre at Belconnen. The parties reached an agreement in about December 2008. There was a written contract between them which provided for payment of an agreed amount. The plaintiff carried out the fitout. The defendant paid part of the contract sum, but failed to pay the balance, being the amount claimed.

3. The defendant filed a defence and counterclaim in June 2010. In its defence, the defendant said that the plaintiff had failed to complete the work, and had carried out some of its design and advice services negligently.

4. In its counterclaim, the defendant said that the plaintiff had agreed to perform the fitout, including design and advice about it, with reasonable skill and care. The plaintiff had advised the defendant that the fitout did not require consent from the ACT Planning and Land Authority. Some months later the plaintiff told the defendant that ACTPLA approval was required and that the fitout could not proceed further until approval was granted. Because of the original negligent advice, the defendant had incurred holding costs by reason of the building being empty for eight months, and had lost a market opportunity because of the delay, someone else having opened a medical centre nearby in the interim. As a result the defendant’s project was not occupied and was not commercially viable. The defendant made a general claim for damages for negligence.

5. The defence and counterclaim, though it appears to have been drafted by a lawyer, was filed by the company without legal representation. In October 2010 a Sydney solicitor came on to the record for the defendant but is, although formally still on the record, without instructions and no longer acting. Mr Manny, the sole shareholder and director of the defendant company, appeared, by leave and without opposition from counsel for the plaintiff, on the hearing of the application.

6. On 30 June 2010 the plaintiff’s solicitors wrote to the defendant company seeking further and better particulars of the defence and counterclaim. Although there has been considerable correspondence between the parties since, including an unsuccessful attempt at settlement of the dispute, the particulars have never been provided. The request for particulars seems to me to be in proper form, and the particulars requested seem to me relevant and reasonable.

7. In July 2010 the plaintiff applied to the court for an order that the defendant answer the request for particulars within seven days. On 9 August 2010, Mr Manny appeared before the Registrar and informed her that because of a computer fault he could not access copies of emails and other documents that he needed to provide the particulars. The Registrar made orders requiring the plaintiff to provide him with copies of the emails and documents, and ordered the defendant to answer the request for particulars within twenty-one days of receipt of those documents.

8. In April 2011, the plaintiff applied to the court for an order that the particulars be furnished within twenty-eight days. That application came before the Registrar on 11 April 2011. There was no appearance for the defendant, and the Registrar made the order sought, ordering the defendant to pay the costs of the application.

9. The particulars still not having been provided, the plaintiff made the present application on 27 May 2011.

10. Mr Manny is the sole director of a number of companies in addition to the defendant. Three of these companies are presently in administration.

11. Mr Manny informed me on the hearing of the application that he has no money, and is presently reliant on Centrelink benefits. The defendant company has no assets other than its cause of action on the counterclaim. Mr Manny asked me to adjourn the application until the New Year, that is for some seven or eight months, to give him an opportunity to provide the particulars and to get himself into a position to pursue the defence and counterclaim.

12. Mr Manny has been in the past a successful businessman, with assets through companies under his control running into the millions of dollars. He is, as no doubt are most successful entrepreneurs, an optimist at heart, and I accept that he genuinely believes that given enough time he will get through his present difficulties and into a situation where he is again financially successful. I do not rule out the possibility that he will succeed in that endeavour. But I think it unlikely that his optimism will be borne out in the short term and I must determine the application on the present realities.

13. The defendant has failed to comply with the Registrar’s most recent order, that of 11 April 2011. Mr Manny concedes that he is not in a position to comply with that order immediately.

14. It is, in addition, clear that if the defendant were permitted to proceed with its counterclaim, an application for security for the plaintiff’s costs of the counterclaim would almost certainly be successful. It is equally clear that the defendant company does not have access to funds which would enable it to comply with an order for security for costs.

15. Hence to permit the counterclaim to proceed would be postponing the inevitable, at further unrecoverable expense to the plaintiff.

16. In the circumstances, I propose to strike the counterclaim out. I have not heard from the parties sufficiently to be able to determine whether the effect of this is that there is no longer any genuine defence to the claim. The plaintiff may wish to advance such an argument but if so advised will need to do so by making a separate application for that relief.

17. As to the plaintiff’s application for an order that the defendant company be wound up, such an order will be made on an oral application without notice only in the most exceptional of circumstances. The application was not pressed with particular vigour, and I make no order in respect of it.

18. The defendant must pay the plaintiff’s costs of the present application.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 10 June 2011

Counsel for the plaintiff: Mr G J Blank

Solicitors for the plaintiff: Trinity Law

Appearing for the defendant by leave: Mr J Manny, director

Date of hearing: 3 June 2011

Date of judgment: 10 June 2011