Allen v Merym Pty Ltd t/as EMCO Building - [2022] WADC 24

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   ALLEN -v- MERYM PTY LTD t/as EMCO BUILDING [2022] WADC 24
CORAM:   COMMISSIONER COLLINS
HEARD:   7-11, 14-15 FEBRUARY 2022 & WRITTEN SUBMISSIONS 21 & 24 FEBRUARY 2022
DELIVERED          :   9 MARCH 2022
FILE NO/S:   CIV 1102 of 2019
BETWEEN:   ROBERT PAUL ALLEN
Plaintiff
AND
MERYM PTY LTD t/as EMCO BUILDING
First Defendant
AXS ACCESS MANAGEMENT PTY LTD
Second Defendant
PAUL HOUGH AND GAETANA FUCILE t/as UNIQUE SCAFFOLDING
Third Defendant

Catchwords:

Practice and procedure - Pleadings - Leave to amend - Statement of claim

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Amendment of the second defendant's statement of claim in the contribution and/or indemnity proceedings against the third defendant disallowed

Representation:

Counsel:

Plaintiff	:	Mr D J Bayly
First Defendant	:	Mr J J Sheldrick
Second Defendant	:	Mr C C Rimmer
Third Defendant	:	Mr A A Nolan

Solicitors:

Plaintiff	:	Hoffmans Lawyers
First Defendant	:	Meridian Lawyers (Perth)
Second Defendant	:	Sparke Helmore Lawyers
Third Defendant	:	McCabe Curwood

Case(s) referred to in decision(s):

AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
De Kauwe v Cohen [No 3] [2021] WASC 286
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78
Fletcher v St George Bank Ltd [2010] WASC 75
Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323

COMMISSIONER COLLINS:

Introduction

In March 2019, Robert Paul Allen commenced an action against Merym Pty Ltd trading as EMCO Building (EMCO) seeking damages for the injuries he sustained in an accident at the Claremont Football Ground, located at Davies Road, Claremont. Put briefly, Mr Allen alleges that he was injured on 9 January 2017 in the course of his employment with Chan Corporation Pty Ltd during the redevelopment of the Claremont Football Ground in 2016 and 2017. Mr Allen later amended the writ of summons to name AXS Access Management Pty Ltd (AXS) and Paul Hough and Gaetana Fucile trading as Unique Scaffolding (Unique) as defendants.
In broad terms, EMCO is a building company that was engaged to perform redevelopment works at the Claremont Football Ground. EMCO engaged AXS to supply scaffolding to be erected for the works. AXS engaged Unique to erect the scaffolding at the Claremont Football Ground.
Between 7 and 15 February 2022, I presided over the trial of this action. At the end of the final sitting day, being 15 February 2022, and after the parties had closed their cases, I made orders for written closing submissions to be filed on or before 11 March 2022, with responsive written submissions to be filed on or before 8 April 2022. The oral closing submissions are scheduled to be heard on 9 May 2022, being the parties' first available date.
Also, at the end of the final sitting day, following the conclusion of evidence in the proceeding and after the parties had closed their cases, AXS's counsel applied for leave to amend AXS's statement of claim in the contribution and/or indemnity proceedings against Unique. AXS's counsel provided the court with a minute of proposed amended statement of claim dated 15 February 2022. AXS's counsel made some brief oral submissions about the nature of the proposed amendment. In response, Unique's counsel said that had he learnt of the proposed amendment a day earlier but had not been able to obtain instructions.
Counsel for AXS and Unique were content for the resolution of AXS's leave application to be dealt with on the papers. Neither Mr Allen nor EMCO wished to be heard in relation to the application. Accordingly, I made orders for AXS and Unique to provide written submissions. AXS filed written submissions on 21 February 2022, together with an affidavit from Ms Aime Jessica Dash, sworn 21 February 2022. Unique filed written submissions dated 24 February 2022.
For the reasons that follow, I have determined that leave is refused and AXS's application will be dismissed.

AXS's submissions

AXS contended that leave should be granted to amend its statement of claim in the contribution/indemnity proceedings against Unique because:
(a)the amendment related to a contractual construction issue about which no evidence was required to be led;
(b)Unique had notice of the claim the subject of the amendment and was not taken by surprise; and
(c)if the court did not permit the amendment, it would be open to AXS to pursue the foreshadowed claim against Unique in separate proceedings.
In the circumstances, it would be contrary to the interests of justice and the desire to achieve finality in litigation for that to occur.
In support of its application, AXS submitted that under O 21 r 5(2) of the Rules of the Supreme Court 1971 (WA) (RSC), the court may, at any stage of the proceedings, allow any party to amend that party's pleading, on any terms as to costs or otherwise, that may be just and in the manner (if any) that the court may direct. Whether any such amendment should be permitted is a matter of discretion to be exercised according to the interests of justice. The court must consider an application to amend a statement of claim in accordance with the objects described in O 1 r 4A and r 4B of the RSC.
AXS also submitted that where an application for leave was made after the commencement of the trial, the court must have regard to the considerations identified by the High Court in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (AON).
Having regard to AON and the factors relevant to the exercise of the court's discretion, AXS submitted the following.
Firstly, AXS's amendment would not cause any delay. Unique had been on notice of the claim since at least 19 April 2021. The agreement between AXS and Unique, which contains the indemnity clause and which the court was already being asked to construe, was in evidence as exhibit 5.3.
Secondly, the nature of the amendment was such that there would not be wasted costs.
Thirdly, Unique would not be irreparably prejudiced in any way. Further, if the proposed amendment had been completed when the original statement of claim and the contribution/indemnity proceedings were filed (December 2021) it is doubtful that Unique would have taken a different course of action at the trial.
Fourthly, if the amendment were granted, it would not result in any inefficiencies in the litigation or the adjournment of the trial. In comparison, if the amendment were not allowed, AXS could, at the conclusion of the proceedings, pursue new proceedings against Unique. This would be inefficient and contrary to the interests of justice and the desire to achieve finality in the litigation. In effect, AXS submitted that allowing the amendment was consistent with case management considerations as embodied in the RSC.
Fifthly, the amendment would not lessen the public's confidence in the judicial system, given the matters raised above.
Sixthly, the amendment was sought to ensure that all AXS's claims were brought in the one proceeding, thereby avoiding the prospect of separate proceedings being brought later against Unique, which would not be in the interests of justice.

Unique's submissions

Unique submitted that AXS should not be granted leave to amend its statement of claim in the contribution/indemnity proceedings against it because:
(a)the amendment had the effect of adding a new cause of action, a matter that AXS accepts;
(b)AXS had not led any evidence to explain the delay in applying for the amendment. The affidavit in support of AXS's case was 'silent' on this point;
(c)the amendment was sought after the evidence at trial had concluded and the parties had closed their respective cases; and
(d)in the circumstances of this case, AXS had had sufficient opportunity to present its case.
Unique says that, in effect, it ran its defence of the parties' claims, including AXS's claim, as was pleaded at the relevant time. Had AXS's claim included the proposed amendment, it:
could and/or may have:
(a)assessed its risk/exposure to liability differently in the context of the additional claim brought against it;
(b)altered its approach to defending the action;
(c)altered its approach to any potential resolution of the action.
Unique says that, in effect, given the way AXS ran its case at trial, and in the absence of any explanation for the late amendment, it was not in the interests of justice for AXS to be permitted to amend its case after the parties had closed their respective cases.

Disposition

In the recent case of De Kauwe v Cohen [No 3] [2021] WASC 286, Le Miere J summarised the principles relevant to an application for leave to amend at [8] and [9], with which I agree. I respectfully adopt those principles:
8Order 21 r 5(2) of the Rules of the Supreme Court 1971 (WA) (RSC) provides that the court may at any stage of the proceedings allow any party to amend that party's pleading, on any terms as to costs or otherwise, that may be just and in the manner (if any) that the court may direct. Whether an amendment should be permitted is a matter of discretion to be exercised according to the interest of justice. The court must consider an application to amend a statement of claim in accordance with the objects prescribed in RSC O 1 r 4A and r 4B.
9Where an application for leave to amend a pleading is made after the commencement of a trial, the court must have regard to the considerations identified by the High Court in AON Risk Services Australia Limited v Australian National University. The applicant seeking the amendment bears the onus to show why leave should be granted. A just resolution of proceedings between the parties is a critically important consideration, which will necessarily include a proper opportunity being given to the parties to plead and to replead their respective cases, should that need arise and the circumstances are present to warrant the discretion being exercised in favour of the grant of the amendment. Nevertheless, there are limits upon repleading. The High Court referred to a range of other considerations which need to be weighed in the balance in the exercise of the discretion to grant an amendment to a pleading.
(footnotes omitted)
At [10] and following, Le Miere J referred to a range of other considerations that were relevant when considering whether to grant leave to amend. AXS referred to De Kauwe v Cohen[No 3]in its written submissions and purported to address most of the considerations identified by Le Miere J. I address each of these in turn below.
Firstly, AXS submitted that its amendment would not cause any delay. In my view, if the proposed amendment were permitted, although there might be some delay with re-issuing of the papers for the judge and the like, the trial of the matter would not be delayed. In this regard, the evidence at trial has concluded; no party has foreshadowed an application to re-open its case. Further, Unique's written submission do not rest on delay to the trial process as a ground for refusing the amendment.
Secondly, AXS submitted that the nature of the amendment was such that there were no wasted costs. In my view, having regard to the proposed amendment, and the likely defence, there are unlikely to be any, or any substantial, wasted costs if the amendment were permitted. Unique did not submit otherwise in its written submission.
Thirdly, AXS submitted that Unique was not irreparably prejudiced in any way and said that it was 'doubtful' that Unique would have taken a different course of action at the trial if the amendment had been included in AXS's original statement of claim. In response, Unique joined issue and said, in effect, that it had been denied the opportunity to alter its approach to defending the action and any potential resolution of the action. However, Unique did not (in its written submissions) set out how it might have defended or resolved the action differently.
If AXS's original statement of claim had included the amendment then, at face value, and without determining the matter, Unique would have had exposure to a greater monetary claim than would otherwise been the case, absent the amendment. Whether Unique would have availed itself of the opportunity to alter its approach is a matter of conjecture and speculation. However, it is possible that it may have. Given this, it is at least arguable that Unique would be prejudiced by the amendment and prejudiced in a way that could not be adequately compensated for, whatever costs orders may be made.
For completeness, I observe that AXS submitted that it was 'doubtful' that Unique would have taken a different course of action at the trial. In my view, implicit in this is recognition on the part of AXS that the matter is not free from doubt. Put differently, AXS accepts that it is possible that Unique may have run a different case at the trial of the matter, albeit 'doubtful'.
As to the fourth matter, AXS submitted that the amendment would not result in any inefficiencies in the litigation or the adjournment of the trial.
In my view, it is correct to say that the amendment of the pleading is unlikely to lead to the adjournment of the trial. Whether it is correct to say that it is unlikely to lead to inefficiencies in the litigation is not so clear.
AXS further submitted that if the amendment were not allowed, AXS could, at the conclusion of the proceedings, pursue new proceedings against Unique, which would be inefficient and contrary to the interests of justice and the desire to achieve finality in the litigation. That submission is, in my view, open to attack on the ground that any new proceeding would face the potential barrier of an abuse of process objection. In effect, AXS would be attempting to litigate an action that it should have properly litigated in earlier proceedings: AON (175) and at [33] - [35] (French CJ).
The fifth matter concerns whether the amendment will lessen the public confidence in the judicial system. AXS submitted that should the amendment be permitted, there would be no loss of public confidence, because:
(a)the trial would not be adjourned and there would not be any wasted costs;
(b)the amendment was minor; and
(c)the amendment related to a matter which Unique was aware of before the trial.
Several things may be said in response to AXS's submissions. First, it is axiomatic that parties know the case put against them prior to trial and that parties are held to their case at trial: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78 [124]. Implicit in this is that the case to be met is the pleaded case, not some case canvassed in correspondence. Secondly, the amendment is not 'minor' from Unique's position. AXS is proposing adding a new cause of action against Unique after the evidence has closed and the parties have closed their cases. It is possible that significant liability may flow from that amendment. Thirdly, AXS proposed the amendment late in the proceedings, without any proper explanation for the delay in the amendment (which is addressed further below). Fourthly, AXS has had sufficient opportunity to put its case. AXS did not submit otherwise. In my view, having regard to the above matters, it is at least arguable that the grant of leave in the circumstances, would lessen the public confidence in the judicial system.
The sixth and final matter concerns whether AXS has provided a satisfactory explanation for seeking the amendment at such a late stage. In its submissions, AXS states that its amendment ensures that all its claims are dealt with in one proceeding, thereby avoiding the prospect of separate proceedings against Unique, which would not be in the interests of justice or an efficient use of the court's time.
In my view, AXS's submission takes no account of the lateness of the proposed amendment, nor the absence of any proper explanation, nor the potential prejudice that Unique may suffer if the amendment were permitted. In particular, AXS has not sought to explain the delay in seeking the amendment or why the amendment was not raised earlier. It is possible that the omission was an oversight, or a mistake, or as Unique submitted, possibly a 'forensic decision', but that is simply conjecture and speculation. It is incumbent on AXS to explain fully, the circumstances of the amendment, and in particular, the reason for its delay: AON [5] (French CJ) and [103] (Gummow, Hayne, Crennan, Keifel and Bell JJ). AXS has not done this.
Finally, I observe that AXS did not submit that it had had insufficient opportunity to put its case. This tends to suggest that AXS did have sufficient opportunity to put its case.

Conclusion

Ordinarily, where a party makes an application to amend its pleading after the close of evidence, that party bears a heavy burden to show why leave should be granted. That was the case in AON [4] (French CJ). As the plurality observed in AON at [103], one of the reasons why an explanation is required is so that the court can weigh the circumstances giving rise to the amendment against the effects of any delay and the objectives of the relevant rules, in this case, RSC O 1 r 4A and r 4B.
Under RSC O 1 r 4B, the court is required to manage the actions and matters that come before it in accordance with a system of positive case flow management, with the objects of, amongst others (a) promoting the just determination of the litigation. This necessarily involves a proper opportunity for a party to plead its case. However, there are limits on repleading. AON canvassed some of those limits at [89] ‑ [103] and [111] ‑ [112], which Beech J helpfully summarised at [52] in Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296; see also Fletcher v St George Bank Ltd [2010] WASC 75 [25] (Martin CJ).
Here, AXS did not lead any evidence as to how or why the relevant amendment was omitted from its pleading, or why the proposed amendment was first raised after the closure of evidence and the parties had closed their cases. In my view, AXS should have supplied the court with this information, so that the court could be fully informed about the circumstances giving rise to the proposed amendment.
Instead, AXS focussed its submissions on the alleged lack of impact on Unique and the alleged lack of prejudice to the trial process. As I have already outlined, in my view, it is at least arguable that Unique will be prejudiced by the amendment and prejudiced in a way that could not be adequately compensated for, whatever costs orders may be made. However, evidence of Unique's prejudice is not necessary: Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323, 336.
Having regard to the above, it would not be in the interests of justice for AXS to be given leave to amend its statement of claim in the contribution and/or indemnity proceedings against Unique.
For the above reasons, I dismiss AXS's application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
SZ
Associate to Commissioner Collins
8 MARCH 2022