Construction Engineering (Aust) Pty Ltd v Adams Consulting Engineering Pty Ltd (No 2) [2016] VSC 209

Whether the Court would be best assisted by a report from a special referee under O. 50 of the Supreme Court (General Civil Procedure) Rules (Vic) 2015 and or an assessor under s. 77 of the Supreme Court Act 1986 (Vic) and s. 65M of the Civil Procedure Act 2010 (Vic) (CPA)

Background

The plaintiff alleged that civil and structural drawings prepared by the defendant used by the plaintiff for the purpose of pricing and tendering for the head contract and further drawings prepared for the purpose of obtaining prices from and letting contracts to subcontractors were defective and that as a result the plaintiff incurred additional costs and suffered delay.

The Court had earlier directed that a special referee be appointed under O 50 and that the parties agree the questions to be stated for referral.

The matter came back to the Court after the parties were unable to agree the questions to be stated for the referral. The defendant urged the Court to proceed with a special reference or appoint an assessor. The plaintiff opposed the appointment of a special referee or an assessor.

The Court observed a number of problems associated with O50.

In particular, the Court observed that in contradistinction to the Federal Court Act and the NSW Rules, O50 does not permit the whole of the proceeding to be referred to a referee without the need for specific questions to be stated.

The Court noted difficulties associated with defining questions to be put to a special referee in circumstances where the whole proceeding cannot be referred and the potential for significant and expensive controversy.

Judgment

The Court adopted a hybrid approach. It directed that the hearing be split into 2 phases. Phase 1 would determine liability with the assistance of an assessor appointed under s 65M of the CPA.

In the event that mediation failed to resolve the matter, phase 2 would deal with the remaining issues: delay and loss and damage. Phase 2 would be referred to a special referee under O. 50.

Conclusion

His Honour has made clear that the Court will be prepared to “slice and dice” a proceeding to achieve justice in the most time and cost-effective manner and, where appropriate, use both an assessor and a special referee.

Whilst the Court observed that recent Victorian cases opened the way for a wider use of special referees by the Court (at [19]) it also noted that that the utility of O. 50 would be improved by removing the requirement for specific questions to be referred, allowing for the appointment of more than one special referee (i.e. a technical referee and a referee who is a commercial lawyer) and removing the distinction between a decision (r. 50.01(1)(a)) and an opinion (r, 50.01(1)(b)).