The applicant, Ms Hennessy, entered into a contract on 27 February 2020 with the developer, CAV Developments (CAV), to purchase an apartment. The contract included a sunset clause allowing either party to terminate the agreement if separate title for the lot was not issued by 31 December 2022.
Significant construction delays meant the building was not completed before the sunset date. In August 2024, Ms Hennessy commenced proceedings seeking specific performance of the contract, alleging that CAV breached its obligations by failing to complete construction and issue the separate title notice in a timely manner.
In September 2024, after the proceedings began, CAV purported to terminate the contract, relying on two alternative grounds:
1. the failure to issue the separate title notice before the sunset date, and
2. the claim that Unit 2304 had been “substantially damaged” due to construction defects.
One alleged defect concerned the timber floors, which CAV claimed were so damaged that it required replacement. Ms Hennessy disputed this, maintaining that the floors were sound and that CAV’s reliance on alleged defects was merely a pretext to justify its own delays.
By early 2025, both sides had engaged experts to inspect the apartment. CAV’s expert, builder Mr Schaper, had already inspected the apartment and reported on the alleged defects. Ms Hennessy’s expert, Mr Groom, was scheduled to inspect the property on 17 April 2025, a date agreed to by both parties and confirmed in court orders.
However, on 7 April 2025, ten days before Mr Groom’s scheduled inspection, CAV engaged contractors to remove the timber floors from the unit. When Mr Groom arrived, most of the flooring had already been stripped away, with only small sections remaining under cabinetry. As a result, Mr Groom was unable to conduct a full assessment of the alleged defects.
Ms Hennessy applied to strike out portions of CAV’s defence concerning the timber floor allegations or, alternatively, to exclude evidence relating to those defects. She argued that CAV’s conduct had deprived her of the opportunity to have her expert examine critical evidence, rendering a fair trial impossible.
CAV denied any impropriety, contending that the floor removal was part of ongoing rectification works and that the contractor was only available during the April 7–18 period. The company also claimed that the removed floorboards were left in a bin outside the apartment and that Mr Groom could have inspected them but chose not to.
Further, CAV argued that Ms Hennessy could have applied for a preservation order to prevent alteration of the evidence and that any resulting prejudice could be mitigated by drawing adverse inferences at trial.
The Court rejected these arguments. It found that CAV’s managing director, Mr Cavallucci, was well aware that Ms Hennessy’s expert intended to inspect the unit to respond to CAV’s own evidence and that removing the timber floors before that inspection would likely impede her case. Despite this, he instructed contractors to proceed.
The judge found no genuine urgency to remove the floors. Although CAV claimed the timber was water damaged as early as August 2023, it did not seek removal until April 2025, 18 months later and no replacement work was carried out for more than five months thereafter. This delay, the Court said, was inconsistent with CAV’s claim that the removal was necessary to progress construction.
The Court also rejected CAV’s assertion that Mr Groom was told the removed timber boards were available for inspection. Evidence from both Mr Groom and Mr Cavallucci showed that no such communication occurred and that even if it had, inspecting dislodged floorboards would not have produced reliable evidence given the damage caused during removal.
The Court reaffirmed that abuse of process encompasses conduct that objectively undermines the administration of justice, even absent deliberate moral wrongdoing. Destruction of key evidence, whether intentional or not, may qualify if it creates a real risk that a fair trial cannot occur.
In this case, the Court found that CAV’s actions did exactly that. By removing the timber floors before the opposing expert could examine them, CAV ensured that only its own witnesses could give direct evidence of the alleged defects. The Court held that this “created a substantial risk that a fair trial of the timber floors allegations is not possible.”
While the Court recognised that striking out pleadings is a drastic and exceptional remedy, it concluded that the removal of the floors amounted to a serious interference with the administration of justice. The Court ruled that CAV’s conduct constituted an abuse of process and that Ms Hennessy could not be fairly required to defend the timber floor allegations on the current evidence.
As a result, the Court struck out the relevant parts of CAV’s defence relating to the alleged timber floor defects, preventing CAV from relying on that issue at trial.
The decision underscores the judiciary’s readiness to intervene where one party’s actions, even under the guise of routine works, compromise the integrity of the evidentiary process. In the context of construction disputes, the case is a clear warning that premature or unilateral “rectification” can as amount to spoliation of evidence and be punished as an abuse of process.
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