Aimtek Pty Ltd v Brisbane Ship Constructions Pty Ltd
[2010] QSC 160
•18 May 2010
SUPREME COURT OF QUEENSLAND
CITATION:
Aimtek Pty Ltd v Brisbane Ship Constructions Pty Ltd [2010] QSC 160
PARTIES:
AIMTEK PTY LTD
ACN 009 679 207
(plaintiff)
v
BRISBANE SHIP CONSTRUCTIONS PTY LTD
ACN 010 621 275
(defendant)FILE NO/S:
BS 10771 of 2007
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court of Queensland
DELIVERED ON:
18 May 2010
DELIVERED AT:
Brisbane
HEARING DATE:
4 December 2009
JUDGE:
Daubney J
ORDERS:
1. The plaintiff’s application to strike out paragraph 8 of the fifth amended defence is dismissed.
2. Within 21 days of today, the defendant shall provide the plaintiff with further and better particulars of:
(a) The allegation in paragraph 8(a)(iv)(B) of the fifth amended defence that the defendant was “totally reliant upon the plaintiff” as alleged in that paragraph;
(b) The “build program” referred to in paragraph 8(a)(iv) of the fifth amended defence.
3. The costs of and incidental to the application will be reserved.
CATCHWORDS:
PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – PLEADING – DEFENCE AND COUNTERCLAIM – where the plaintiff has sued the defendant for monies alleged to be owing under a design contract – where the plaintiff claimed they provided technical and support services outside the scope of supply under the design contract at the request of the defendant – where the defendant pleads in paragraph 8 of the defence that the plaintiff made certain representations in relation to the services provided which induced the defendant to assume the plaintiff would provide the services to the defendant as part of the scope of supply under the design contract – where the plaintiff has applied for paragraph of the defence to be struck out on the grounds that no reasonable defence is disclosed, prejudice and delay, or that the pleadings are unnecessary or embarrassing – whether paragraph 8 of the defence should be struck out
PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – PLEADING – where the plaintiff seeks, in the alternative, for the defendant to provide further and better particulars of paragraph 8 of the defence – whether the defendant should be required to provide further and better particulars
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, applied
Development Assessment Commission v Macag Holdings Pty Ltd (2001) 80 SASR 104, cited
Dey v Victorian Railway Commissioners (1949) 78 CLR 62, cited
Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164, cited
Walton v Gardiner (1993) 177 CLR 378, cited
COUNSEL:
DR Cooper, SC for the plaintiff
M Johnston for the defendantSOLICITORS:
Morrow Petersen for the plaintiff
O’Reilly Lillicrap Solicitors for the defendant
The plaintiff has sued the defendant for monies alleged to be owing under a design contract dated 23 September 2006 in relation to the construction of six vessels by the defendant for a third party.
In that regard, the statement of claim pleads:
“2.By a written agreement styled Design Contract made between the Plaintiff and the Defendant and dated 23 September 2006 (“the Design Contract”) the parties agreed, subject to the signing of the “build contract” for the vessels referred to in the said contract, that the Plaintiff “shall provide the (Defendant) with design materials” for the construction of the said vessels by the Defendant for Collins River Enterprises Ltd (“CRE”) a company incorporated in the United Kingdom.
3.By clause 7 of the Design Contract it was agreed that the Plaintiff “shall provide the design materials of a vessel as described in the scope of supply to enable such vessel to be built by the (Defendant)”.
4.By clause 3 of the Design Contract it was agreed that:
“The design contract price for each two vessels ordered by (CRE) shall be two hundred thousand Australian Dollars (AUD$200,000.00) plus four per cent (4%) of the build contract price per vessel excluding shipping costs.”
5.By clause 4(a) of the Design Contract it was agreed that:
“Payment of the design contract fee shall be made by the (Defendant) to the (Plaintiff) in instalments within seven (7) days of the milestone payments made by (CRE) to the (Defendant) according to the build contract(s).”
6.By clause 6 of the Design Contract it was agreed that the Plaintiff is entitled to remuneration “for technical and support services outside the scope of supply as requested by” the Defendant at the rates and in the amounts more particularly specified in the clause.”
Relevant for present purposes is the plaintiff’s claim pursuant to clause 6 for the sum of $435,809.00. That claim is pleaded in paragraph 14 of the statement of claim as follows:
“14. Further, the Plaintiff:
a)provided technical and support services outside the scope of supply under the Design Contract at the request of the Defendant;
b)thereby became entitled pursuant to clause 6 of the Design Contract to invoice the Defendant for such services; and
c)consequently rendered invoice # 48436 dated 16 April 2007 to the Defendant in the sum of $435,809.00.
Particulars
(i)The technical and support services provided consisted of the preparation and delivery of 124 drawings to be used by the Defendant as workshop drawings;
(ii)Workshop drawings were, by the terms of sub clauses 5(c) and (d) of the Design Contract, outside the scope of supply by the Plaintiff under such contract;
(iii)In accordance with the hourly rates set out in Schedule 6 to the Design Contract, the Plaintiff provided the services of:
·Draftsmen for 1972 hours @ $145 per hour;
·Naval architects/design engineers for 630 hours @ $175 per hour.”
The current version of the defence (the fifth amended defence) defends that claim for what have been described as “additional services”, inter alia, by the following plea:
“8. In the further alternative, the Plaintiff is not entitled to the sum of $435,809.00 billed in the Tax Invoice as claimed in paragraph 14 of the statement of claim because:
(a)The Plaintiff, through its proper officers, represented to the Defendant, on or about 22 and 23 September 2006, prior to entering the Design Contract that (the Representations):
i.the vessels to be constructed were sister ships to the ‘Hurricane Clipper’, a vessel previously built by the Plaintiff.
ii.the Plaintiff’s drawing package to be provided to the Defendant under the Design Contract required little or no modification prior to constructing the new vessels because the vessels were to be classed as sister ships of the ‘Hurricane Clipper’;
iii.the Plaintiff had nearly completed work to update the electrical drawings package to a stage ready for subcontractor quoting;
iv.the Plaintiff would provide the Defendant, as part of the scope of supply under the Design Contract, all required drawings to meet a demanding and ambitious build programme within the Plaintiff’s possession and within the Plaintiff’s professional capacity to create and provide; and
Particulars
The build programme was demanding and ambitious because, to the knowledge of Mr Hollis and the Plaintiff’s Mr Don Fry at the time of the Representations (each of these matters being raised and discussed during the negotiations of 22 and 23 September 2006);
A.the Defendant had available to it approximately 50 to 75 staff and contractors, which was a small workforce for the type of building programme being undertaken;
B.the building programme required an electrical design capability which the Defendant did not have and was totally reliant upon the Plaintiff to provide;
C.the Defendant was being required by the building programme to construct and have ready for delivery four vessels in seven (7) months and a further two vessels within a further four (4) months and twenty one (21) days;
D.the usual time to construct one vessel of the size and complexity of the Hurricane Clipper for a company the size of the Defendant would be approximately 12 to 14 months;
E.to achieve the timeframes for construction, it would be necessary for the construction works to be undertaken in the most efficient and timely manner possible, with significantly greater use of subcontractors than would be usual, with high level daily project management brought to bear to ensure no delay or disruption of any kind, generally working seven days per week and public holidays and without the normal Christmas closure, and with extensive use of overtime, worker bonus payment systems for achievement of scheduled milestones, and night shiftwork where possible.
v.the Plaintiff would provide the Defendant an updated electrical drawing package as part of the scope of supply under the Design Contract.
Particulars
The Representations were made orally through the Plaintiff’s Chairman, Mr Don Fry (‘Fry’), who was authorised (or held himself out as authorised) to act on the Plaintiff’s behalf for the purposes of negotiating the Design Contract;
The Representations were made to the Defendant’s Director, Mr Michael Hollis (‘Hollis’); and
The Representations were made at the Defendant’s Toowong Office during the course of negotiations regarding the Design Contract on or about 22 and 23 September 2006.
(ab)The Plaintiff’s Representations induced the Defendant (by Hollis) to assume that:
i.the drawings to be provided by the Plaintiff under the Design Contract would require little modification;
ii.the Plaintiff would supply to the Defendant as part of the scope of supply under the Design Contract all required drawings (including electrical drawings) to enable the Defendant to construct the vessels (‘the Assumptions’);
(b)The Defendant relied on the Plaintiff’s Representations and the Assumptions to the Plaintiff’s knowledge by:
i.Entering into the Design Contract on the terms contained in the Design Contract;
ii.Failing to negotiate for the amount agreed as payable under the Design Contract to expressly include the services now claimed as the subject of the Tax Invoice.
Particulars
Hollis advised Fry during the course of negotiations regarding the Design Contract on or about 22 or 23 September 2006 that:
A.the Defendant did not have an in-house electrical design capability and that the Defendant would require the updated electrical drawing package as part of the scope of supply under the Design Contract.
B.to meet a demanding and ambitious build programme, it was important that the Plaintiff’s drawing package to be provided to the Defendant required little modification (particulars of the demanding and ambitious build programme are at 8(a)(iv) above).
(ba)The Plaintiff’s Representations have proven to be untrue in that the Plaintiff’s drawing package as provided to the Defendant under the Design Contract did not enable the Defendant to construct the vessels because, for the reasons pleaded in paragraph 9 of the counterclaim the Drawing Package (in the respects pleaded in paragraph 9 of the counterclaim) were not reasonably fit for the purpose of facilitating construction of the vessels under the Construction Contract (as that term is defined in paragraph 4(a) of the counterclaim) and were not free from defect and error in design.
provide all of the information required to construct the vessels and required extensive modifications and further information.Particulars
i.The Defendant repeats and relies upon paragraphs 9 and 10 of the counterclaim;
ii.The 124 drawings referred to in paragraph 14(c)(i) of the statement of claim were
essentiallycomprised of electrical drawings which were necessary to enable the Defendant to construct the vessels.Further particulars will be provided after disclosure;
(c)The Defendant will suffer detriment if the Plaintiff were to be now found entitled to claim the amount of the Tax Invoice for the Purported Services because but for the Plaintiff’s Representations the Defendant would not have entered into the Design Contract on the terms on which it did and would have insisted in its negotiation of the Design Contract that the Design Contract price include any remuneration payable to the Plaintiff in respect of the technical and support services alleged at paragraph 14(c) of the statement of claim.
(d)Further, the Defendant would have insisted in its negotiation of the Design Contract that the Design Contract price include any remuneration payable to the Plaintiff in respect of the technical and support services alleged at paragraph 14(c) of the statement of claim, in circumstances where the opportunity to conduct such a negotiation carried with it a real chance that the Defendant would have been successful in that negotiation.
Particulars
That there was a real chance of success is to be inferred from the following matters:
i.the Plaintiff had made the Representations;
ii.the Plaintiff had the capability in-house to provide the technical and support services;
iii.the Plaintiff had experience with building the Hurricane Clipper and the professional capacity to provide the technical and support services;
iv.the Plaintiff had failed to secure an agreement with another ship builder;
v.the Plaintiff was desirous of entering the Construction Management Agreement with CRE which hinged on the Plaintiff finding and securing a suitable ship builder in a timely way;
vi.the Plaintiff desired to have one ship builder to construct and deliver all vessels proposed under the build programme, rather than multiple builders, for ease of management and economies of scale;
vii.the Plaintiff wished to quickly enter an agreement with the Defendant.
(e)In the premises, the Plaintiff is estopped from asserting that the Purported Services were provided as services outside the scope of supply under the Design Contract and from claiming the amount stated in the Tax Invoice.”
The plaintiff has applied for this paragraph of the defence to be struck out in its entirety, or at least for paragraphs 8(a)(i) – (iii), 8(ab) and 8(e) and 8(ba) to be struck out, on the grounds that:
(a) no reasonable defence is disclosed;
(b)the pleadings have the tendency to prejudice or delay the fair trial of the proceeding; or
(c)the pleadings are unnecessary or embarrassing.
This is not the first occasion on which the plaintiff has applied to strike out parts of the defence. Specifically, on 27 May 2009 the plaintiff made an application to strike out paragraph 8 of the then defence (the fourth amended defence). That application was heard by me on 17 June 2009. As argument evolved on that day, the defendant accepted that it would be necessary for it to amend paragraph 8 of the defence, and it was given leave to re-plead that paragraph.
On the hearing of the present application, the defendant mounted a vigorous argument to the effect that, because the bases relied on by the plaintiff in the present application were the same or similar as those it had advanced in the previous application to seek to strike out paragraph 8, the present application ought be dismissed as an abuse of process. The defendant relied in that regard on the fundamental proposition that an attempt to relitigate a case which has been disposed of by earlier proceedings may constitute an abuse of process, citing Walton v Gardiner (1993) 177 CLR 378 per Mason CJ, Deane & Dawson JJ at 393 and Brennan J (Toohey J agreeing) at 414, Development Assessment Commission v Macag Holdings Pty Ltd (2001) 80 SASR 104, per Doyle CJ at [61], and Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, per French CJ at [33] – [34].
It is quite correct that there is significant overlap between the submissions previously made and those now advanced by the plaintiff in relation to paragraph 8 of the defence, and that the plaintiff raises the same or materially similar issues to those on which it relied in the previous application. I do not, however, think it can properly or fairly be said that these issues were determined or disposed of by the earlier application. Rather, as I have said, what occurred in the course of the earlier hearing was, as commonly happens in the course of such applications in the face of criticism of a pleading and with the benefit of engaging in argument on the matter, counsel for the defendant accepted, at least, that it would be desirable for the defence to be repleaded. In view of the acceptance of that outcome as a pragmatic resolution of the application then before the Court, it can hardly be said either that there was an express judicial determination of the issues which the plaintiff had sought to raise at that time or, as would now be said by the defendant, some sort of implied judicial decision to the effect that if amendments were made then the criticisms of paragraph 8 would be finally answered.
The defendant sought to bolster its abuse of process argument by alleging that the plaintiff had been guilty of undue delay in progressing the proceeding. True it is that prior to the hearing in June 2009, significant delays and non-compliance with procedural timetables had been occasioned by the plaintiff. That was dealt with at the time of those delays and events of non-compliance. I do not, however, consider that the plaintiff engaged in any further significant delay after June 2009. There was some slippage in the procedural timetable due to the defendant’s late delivery of its amended defence, and directions for the hearing of the present application had to be recalibrated by four weeks on account of delay by the plaintiff. But all in all, I do not consider the plaintiff’s more recent approach to the conduct of this litigation to have been so tardy as to amount to an abuse of process.
I would therefore reject the defendant’s submission that this application by the plaintiff ought to be dismissed as an abuse of process.
Turning to the strikeout application, the central assertions made by the plaintiff were:
(a)The allegations in paragraphs 8(a)(i), (ii) and (iii) are now otiose; they may have been relevant to a previous version of the defence, but are not relevant to the defendant’s current case;
(b)Paragraph 8, by its terms, seeks to set up a promissory estoppel in relation to the entire cost of all of the drawings which the plaintiff contends were “additional services” falling under clause 6. But the assumption pleaded in paragraph 8(ab)(ii), which is said to have been induced by the pleaded representations, was an assumption that the plaintiff would supply “as part of the scope of supply under the Design Contract all required drawings (including electrical drawings) to enable the defendant to construct the vessels”. The plaintiff contends that:
(i)This pleaded assumption is ambiguous, because the phrase “scope of supply” contemplates both the work performed for the Design Contract price (under clause 3) and the “additional services provided for under clause 6”;
(ii)There is no assumption that the cost of the drawings would be subsumed into the lump sum payable as the “Design Contract price”.
The plaintiff submitted, in short, that “the representations and assumptions related to the nature of the documents to be provided which would achieve a specific result, and not to the Defendant’s liability to pay for them under that Contract as “extras””. (Underlining as per written submissions).
In relation to the first of these submissions, the defendant’s case, as previously pleaded, had asserted an assumption by it, induced by the representations pleaded in paragraph 8(a), that “the drawings to be provided by the plaintiff under the Design Contract would require little modification”. That allegation (previously paragraph 8(ab)(i) was deleted in the current version of the defence. One can see, particularly by reference to the representation pleaded in paragraph 8(a)(ii), that the representations pleaded in paragraphs 8(a)(i), (ii) and (iii) on their face appeared to have more direct logical connection with the assumption previously pleaded in paragraph 8(ab)(i) than the sole assumption now relied on, being that pleaded in paragraph 8(ab)(ii). The defendant says, however, that the plaintiff’s approach of dissecting the pleading in this way is erroneous, and contends that when one reads paragraph 8 as a whole it is clear that the defendant is seeking to plead a series of representations concerned with the character of the drawings to be provided which cumulatively induced the assumption now pleaded in paragraph 8(ab)(ii).
Mindful as I am of the longstanding proposition that a case must be very clear indeed to justify the summary intervention of the Court,[1] and also acknowledging that it is appropriate for a court, when asked to strike out all or part of a pleading, to err on the side of caution lest it deprive a party of a case which, upon analysis of the facts and law at trial, it is entitled to bring.[2] I would be disinclined to accede to the plaintiff’s submission that these paragraphs ought to be struck out at this stage. It is clear that the trial of this proceeding will require some factual investigation into the dealings between the parties prior to the execution of the Design Contract. It would be quite inappropriate for me, on a summary basis, to hold that these particular representations manifestly had nothing to do with the remaining pleaded assumption. In any event, the factual enquiry arising out of the pleading of these representations is clearly limited in scope, and would add little to the length of, or cost associated with, the trial. It may be that, having heard all the evidence, the trial judge concludes, as is presently contended by the plaintiff, that these particular representations did not contribute to the formation of the remaining sole pleaded assumption. But that is not a matter on which I would be prepared to make a determination at this stage.
[1]Dey v Victorian Railway Commissioners (1949) 78 CLR 62 per Dixon J at 91.
[2]Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164; (1994) 80 PR 41-345 at 42,515.
The plaintiff’s complaints about ambiguity in the assumption pleaded in paragraph 8(ab)(ii) are, it seems to me, quite untenable. It was submitted that this pleaded assumption “is necessarily and inherently ambiguous because the phrase ‘scope of supply’ contemplates both work performed for the ‘Design Contract price’, and/or ‘additional services’ rendered under that contract at an hourly rate”. That, however, is clearly not what was provided for under the contract. Indeed, paragraph 6 of the statement of claim (which I have set out above) quotes clause 6 of the Design Contract, which comprised the agreement that the plaintiff was entitled to remuneration “for technical and support services outside the scope of supply as requested by” the defendant (underlining added). Paragraph 8 of the defence is responsive, as I have already noted, to paragraph 14 of the statement of claim, which expressly averred that the plaintiff “provided technical and support services outside the scope of supply under the Design Contract at the request of the defendant” (underlining added). It is therefore quite obvious that the case pleaded by the plaintiff is that works within the “scope of supply” were to be paid for at the Design Contract price specified in clause 3 and work outside the scope of supply was to be remunerated by reference to clause 6.
When one understands that the defendant is using the term “scope of supply” in paragraph 8(ab)(ii) in precisely the same sense and context as that ascribed to the term in the plaintiff’s pleaded case, there is no ambiguity at all about this paragraph in the defence.
Similarly, I think the plaintiff’s attack on these paragraphs on the basis that there was no assumption pleaded that the drawings would be subsumed into the “Design Contract price” completely ignores the contractual construct which the plaintiff itself seeks to advance. The stated assumption that the plaintiff would supply the drawings “as part of the scope of supply under the Design Contract” necessarily means that the defendant asserts thereby that the cost of the drawings was included in the remuneration payable for works which fell within the scope of supply under the Design Contract, i.e. the remuneration payable in accordance with clause 3 of the Design Contract.
Accordingly, when one reads paragraph 8 not merely in its own context but also in context of the plaintiff’s case to which it is responsive, it seems to me that there is no ambiguity in respect of the case which the defendant would seek to make out in this regard.
The plaintiff also sought to make some point, as a matter of law, that the pleading failed to disclose a causal connection between the pleaded assumption and the detriment which the defendant asserted it would suffer from abandonment of that assumption. This argument was, however, premised on what I have found to be an incorrect reading of the assumption pleaded in paragraph 8(ab)(ii), and there is the clear potential for the defendant to establish the necessary nexus in accordance with the case that it has pleaded in this paragraph.
Accordingly, I would refuse the plaintiff’s strike out application.
The plaintiff has sought, by way of alternative relief, for the defendant to provide certain further and better particulars of paragraph 8 of the defence. I will deal with each of those requests in turn.
In relation to paragraph 8(a)(iv)(B), the plaintiff seeks further and better particulars of the allegation that the defendant was “totally reliant upon the plaintiff to provide” the electrical design capability referred to. In response, the defendant says that it has already pleaded in that paragraph that the defendant “did not have” such capability, and moreover that in paragraph 8(b)(ii)(A) it pleaded that one of its officers advised the plaintiff that the defendant did not have such an in-house capability. These answers by the defendant, however, do not address the allegation which is made, in terms, that the defendant was “totally reliant” upon the plaintiff to provide the defendant with such a capability. To assert, as the defendant does, that it was “totally reliant” is something more than merely saying that it did not have the requisite capability or it informed the plaintiff that it did not have the requisite capability. Accordingly, I would be inclined to order that these further and better particulars be provided.
The plaintiff’s next complaint related to paragraph 8(b). Specifically, it is said that the particulars pleaded under the matters of reliance alleged in paragraphs 8(b)(i) and (ii) do not appear to relate to the matters of reliance and serve no function in respect of those matters of reliance. The plaintiff submits that the defendant ought to amend its pleading to either delete those particulars or relocate them to a place in the pleading in which they would make more sense. Properly read, however, it seems to me that these particulars are really a statement of the matters which the defendant will seek to prove at trial from which the judge will be asked to infer the matters of reliance pleaded in paragraph 8(b). On that basis, then, I would be disinclined to accede to the plaintiff’s application on this point.
The plaintiff then seeks further and better particulars of the “build program” referred to in paragraph 8(a)(iv). The plaintiff contends that the term “build program” does not appear anywhere in the Design Contract, and that if there is some document which records its concept, then the defendant ought identify it. The defendant’s response was, however, a little elliptical. The defendant baldly asserted that there could be no confusion as to the build program, because it was “at the very heart of the proceedings”, and that it was referred to in paragraph 8(a)(iv)(C) and, further, that it was discussed in the course of negotiations which are pleaded elsewhere in the defence. Interesting though that information might be, it does not actually identify precisely what the “build program” was, as referred to in paragraph 8(a)(iv). There seems to be an assumption that everyone knows which “build program” the defendant speaks of in that paragraph. I think, however, that for the benefit not least of the judge who is to hear this matter, let alone for the proper purpose of particularizing the case the defendant is advancing, that it would be of use if the particulars of that build program were properly articulated.
Finally, the plaintiff seeks particulars of paragraph 8(a)(iv)(D), and specifically for the defendant to provide the facts and matters relied on to assert that the “usual time” for construction of a vessel as referred to therein would be approximately 12 to 14 months. The defendant says that this is a request for evidence. I agree. There is nothing about the allegation which is ambiguous or which would leave the plaintiff in doubt as to the case which is sought to be advanced.
Conclusion
The plaintiff’s application to strike out paragraph 8 of the fifth amended defence will be dismissed. As will be apparent from the reasons above, much of the argument in respect of that part of the application was, in fact, directed to the defendant’s assertion that the application was an abuse of process, and in respect of that part of the argument I have found against the defendant. The plaintiff has been partially successful in relation to its application for the defendant to provide further and better particulars, while the defendant has successfully resisted several of the matters which were the subject of the application. In all the circumstances, it seems to me that the appropriate order for costs is that they be reserved.
There will therefore be the following orders:
1.The plaintiff’s application to strike out paragraph 8 of the fifth amended defence is dismissed.
2.Within 21 days of today, the defendant shall provide the plaintiff with further and better particulars of:
(a)The allegation in paragraph 8(a)(iv)(B) of the fifth amended defence that the defendant was “totally reliant upon the plaintiff” as alleged in that paragraph;
(b)The “build program” referred to in paragraph 8(a)(iv) of the fifth amended defence.
3.The costs of and incidental to the application will be reserved.
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