Allied Edge Products Pty Ltd v Vero Insurance Ltd
[2008] WASC 253
•6 NOVEMBER 2008
ALLIED EDGE PRODUCTS PTY LTD -v- VERO INSURANCE LTD [2008] WASC 253
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 253 | |
| Case No: | CIV:2504/2005 | 23 OCTOBER 2008 | |
| Coram: | MASTER SANDERSON | 5/11/08 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Leave refused | ||
| B | |||
| PDF Version |
| Parties: | ALLIED EDGE PRODUCTS PTY LTD (ACN 077 775 663) VERO INSURANCE LTD (formerly Royal & Sun Alliance Insurance Australia Ltd) (ACN 005 297 807) |
Catchwords: | Practice and procedure Leave sought to amend defence Turns on own facts |
Legislation: | Nil |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
VERO INSURANCE LTD (formerly Royal & Sun Alliance Insurance Australia Ltd) (ACN 005 297 807)
Defendant
Catchwords:
Practice and procedure - Leave sought to amend defence - Turns on own facts
Legislation:
Nil
Result:
Leave refused
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Category: B
Representation:
Counsel:
Plaintiff : Mr M J McPhee
Defendant : Mr S M Denman
Solicitors:
Plaintiff : Michael McPhee
Defendant : Pynt & Partners
Case(s) referred to in judgment(s):
Nil
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1 MASTER SANDERSON: This is the defendant's application for leave to amend the defence in terms of a document described as 'Substituted Minute of Proposed Amended Defence' filed 16 October 2008 (the minute). The plaintiff opposes leave to amend being granted. To understand the nature of the amendments the defendant seeks to make, it is necessary to begin with the statement of claim.
2 The plaintiff at all material times carried on business as a developer of real estate housing projects. The defendant carried on business as an insurer and issued policies of insurance to persons and companies engaged in home building. Such insurance is required by the provisions of the Home Building Contracts Act 1991 (WA).
3 It is pleaded that on 30 September 1999 the defendant issued five separate policies of insurance to the plaintiff. The insurance was to cover insolvency, death or disappearance of the builder. At the time, the plaintiff was developing five units in Mount Lawley - hence the five separate policies of insurance. The limit of cover on each policy was $100,000.
4 It is pleaded that on or about 23 March 2000 the builder was placed into voluntary administration because of insolvency. As a consequence, the builder was unable to complete the projects. The plaintiff says that the cost then of completing the projects was the sum of $546,216.85. The plaintiff pleads that on 21 June 2000 it made claims against the defendant under each of the policies. Paragraph 13 of the statement of claim is central to this application and I will quote it in full:
The Defendant, by letter from its agent to the Plaintiff dated 5 July 2000 expressly declined the claims on the policy and by such letter, refused to be bound by the wording of the policy and in breach of the said contract of insurance failed and refused to pay the Plaintiff the amount of loss caused by the insolvency of the builder, to the limit of $100,000 nominated in the policy or to pay any sum at all.
5 The plaintiff goes on to plead that this letter amounted to a repudiation of the insurance contract; it pleads acceptance of the repudiation and then pleads damages consequent upon that repudiation. The statement of claim concludes with the alternate plea that if the policies of insurance have not been repudiated or if the repudiation has not been accepted, then the plaintiff has a claim under the policies.
6 Two things can be said about the statement of claim. The first relates to the way it is pleaded. The pleading makes clear that there were five
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- separate policies of insurance. However, after pleading the insolvency of the builder, a claim is made for one lump sum. Surely there must be separate claims made under each of the policies. Insofar as it is relevant to the dispute between the parties, that matter can perhaps be cured by particulars. While the pleading is somewhat obscure, because it appears to confuse five contracts of insurance with just one contract of insurance, the defects are not such as would warrant the statement of claim being struck out.
7 The second point to note is that the claim is relatively straightforward. Policies of insurance are pleaded. There is no dispute about that. The insolvency of the builder is pleaded. That is not admitted in the defence, but is hardly likely to be a matter of great dispute between the parties - after all, it is common ground that the builder went into administration. The plaintiff says that a claim was made under the policy. That is either correct or it is not. It is a matter which is really only relevant if there has been no repudiation and the plaintiff is left to sue on the policies of insurance. The plaintiff says that the contracts of insurance were repudiated. It refers to only one fact in support of that plea and that is a letter from the defendant's agent to the plaintiff. It is a question of fact whether that letter amounted to a repudiation of the contract. There is then the question of whether the repudiation was accepted. The plaintiff particularises its alleged acceptance of the repudiation and refers to three matters. These are matters of fact which are unlikely to be disputed. The only question is whether these facts, if established, can amount to acceptance of the repudiation. Damages are then in issue if the plaintiff succeeds on its case. The final question, assuming the plaintiff cannot establish its repudiation case, is whether it has a claim under the policies of insurance and, if so, for how much.
8 As I understand the general thrust of the defendant's case, it says it is up to the plaintiff to prove the insolvency of the builder. That is the first issue. It then says that the letter it sent to the plaintiff did not amount to a repudiation. If the letter did amount to a repudiation, then it says there was no acceptance of the repudiation. If it is unsuccessful in defending the repudiation claim, then damages are an issue. It says that the contracts of insurance remained on foot and the only question is what, if any, entitlement the plaintiff has under those policies.
9 Paragraph 4.4.6 of the minute pleads that under the policies of insurance no claim would lie if the insured was also named as the builder in the application for insurance. In this case, it was common ground that
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- the plaintiff was not named as the builder in the application for insurance. Therefore, the plea is superfluous and ought not stand.
10 By par 9.2 of the minute, the defendant pleads that when the builder went into voluntary administration certain individuals were appointed as administrators. That fact is irrelevant. Paragraph 9.2 cannot stand.
11 Paragraph 10.3 responds in part to par 10 of the statement of claim. Paragraph 10 of the statement of claim simply pleads that as a consequence of its insolvency, the builder did not complete the development. Paragraph 10.3 alleges that the plaintiff did not complete the development for other reasons. It is a plea clearly directed at the issue of damage. It ought not be in the pleading as a material fact at all. It certainly should not be in par 10 of the defence.
12 Paragraph 13 of the minute is a rolled-up plea. It deals with pars 13 and 14 of the statement of claim. Paragraph 13.2 deals with the issue of damages, in particular the causation question. The same comments I made in relation to par 10.3 apply to par 13.2. It cannot stand.
13 Paragraph 13.3 deals with the letter from the defendant's agent to the plaintiff dated 5 July 2000. Subparagraphs 13.3.1 and 13.3.2 are unnecessary because they simply repeat what is in the letter. However, they cause no real mischief and they can remain. But par 13.3.3 is irrelevant. Whether or not there were common directors and shareholders between the builder and the plaintiff at the time the insurance policy was issued is an irrelevant consideration. Paragraph 13.3.3 cannot stand. That also means that the particulars to that subparagraph should also be struck out. The letter speaks for itself and that is the end of the matter.
14 Paragraph 13.4 deals with a meeting between one Michael Kinnear on behalf of the defendant and one Vince Costantino on behalf of the plaintiff in relation to claims made by the plaintiff under the policy of insurance. After reading the proposed paragraph of the minute and listening to the oral submissions made on behalf of the defendant, it appears that what the plea is directed towards is establishing that at the time of writing the letter Mr Kinnear was under a misunderstanding as to the terms of the policy of insurance. That may well be the case, but it is irrelevant to this dispute. What the parties actually thought the letter meant and whether or not they were correct in their understanding is entirely irrelevant. The letter either repudiates the contract or it does not. There is nothing in the letter that makes it ambiguous or obscure and
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- which might require extrinsic evidence to allow it to be properly interpreted.
15 It may be that the meeting which took place between Mr Kinnear and Mr Costantino will be relevant to the question of whether or not the alleged repudiation of the contract by the defendant was accepted by the plaintiff. If the meeting is said to constitute a material fact which supports the defendant's contention that there was no acceptance of the repudiation, then it can be pleaded in that context. But as it stands at the moment, par 13.4 is irrelevant and it cannot stand.
16 The same can be said of pars 14 and 15. It is not entirely clear what issue is being dealt with by these paragraphs. They appear to be some attempted justification for the defendant sending the letter to the plaintiff. Whether that is the case or not, the paragraphs are inappropriate and cannot stand.
17 Paragraph 16.1 of the minute cannot stand because it refers to par 15 and that paragraph cannot stand. Paragraph 16.2 is the plea of material fact - the defendant denies that it repudiated the policies of insurance. Anything else the defendant might plead would be particulars. On that basis alone, par 16.3 through to par 16.6 cannot stand. But even if these subparagraphs were dressed up as particulars, the pleading would be unacceptable. The fact is that the letter either repudiates the insurance policies or it does not. The only particular that the defendant need provide is to plead that the letter does not amount to a repudiation. That is the end of the matter.
18 Paragraph 17 of the minute deals with the plaintiff's plea that it has suffered loss and damage as a consequence of the repudiation. Proper pleading practice would be to simply deny that the plaintiff has suffered any damage. The plaintiff's plea that it has suffered damage is the plea of material fact. The rest - that is, the quantification of the damage - is particulars. It is bad pleading practice to plead to particulars. It is also in this case unnecessary. Once the plaintiff sets out its calculation of its loss and damage in detail, supported as it must be by expert evidence, then the defendant can respond. It is in no way restricted by not setting out in the defence how it says any loss or damage ought be calculated. At some stage it will need to document what it says is the amount of any damage calculation. But that position has not yet been reached. Paragraph 17 cannot stand.
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19 The same problem arises in relation to pars 21 and 22. They are essentially pleas of an alternate calculation of damage. It is pleading to particulars. It is inappropriate and ought not be in the defence.
20 This defence needs a complete reworking. It is significantly defective in its present form and I would refuse leave to amend in terms of the minute. I will hear the parties as to the form of orders and as to costs.
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