Amara Holdings Pty Ltd v Salta Constructions Pty Ltd and
[2011] VCC 507
•23 March 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
BUILDING CASES DIVISION
Case No. CI-09-04711
| AMARA HOLDINGS PTY LTD | Plaintiff |
| v | |
| SALTA CONSTRUCTIONS PTY LTD | Defendant |
| and | |
| K J KLOPFER AND DOBOS PTY LTD | Third Party |
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| JUDGE: | HIS HONOUR JUDGE SHELTON |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 2 February 2011 |
| DATE OF JUDGMENT: | 23 March 2011 |
| CASE MAY BE CITED AS: | Amara Holdings Pty Ltd v Salta Constructions Pty Ltd and K J Klopfer and Dobos Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 507 |
REASONS FOR JUDGMENT
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Catchwords: Setting aside of default judgment – summary judgment application by defendant – joinder of further defendant – Rules 9.06, 23.01(1)(a) and 24.06 of the County Court Civil Procedure Rules 2008 – Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; Bryan v Maloney (1995) 182 CLR 609; Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258; Wheelahan v City of Casey (No 3) [2011] VSC 15; Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D J McAndrew | WMB Lawyers |
| For the Defendant | Mr J A F Twigg | Logie-Smith Lanyon |
| For the Third Party | Ms K Cappellotto (Solicitor) | DLA Phillips Fox |
| HIS HONOUR: |
1 I have three applications before me. Firstly, the defendant has applied pursuant to Rule 24.06 of the County Court Civil Procedure Rules 2008 (“the Rules”) seeking that judgment entered against it on 17 December 2010 be set aside. Secondly, the defendant had made application under Rule 23.01(1)(a) of the Rules to stay the proceeding or for it to be given judgment. Thirdly, the plaintiff seeks leave to join Taras Nominees Pty Ltd (“Taras”) as a second defendant to the proceeding.
2 Following the hearing on 2 February 2011, I subsequently received written submissions dated 9 February 2002 from Mr McAndrew, who appeared for the plaintiff, and from Mr Twigg, who appeared for the defendant, dated 17 February 2011.
3 A useful starting point is my Order of 8 December 2010, which stated:
“1 The plaintiff has leave to amend its Further Amended Statement of
Claim dated 26 August 2010.2
On or before 17 December 2010, the Plaintiff file and serve its Further Amended Statement of Claim in accordance with the leave given in paragraph 1.
3
If the plaintiff does not comply with paragraph 2, the Further Amended Statement of Claim dated 26 August 2010 is struck out and there is judgment for the Defendant.
4
The Defendant’s application made under rule 23.01 of the Court Rules is adjourned to 2 February 2011.
5
The Plaintiff pay the Defendant’s costs of today to be taxed on Scale D.
6 The Third Party’s costs of the day are reserved.”
Application to Set Aside Judgment
4 The plaintiff did not in fact comply with paragraph 2 of that Order on or before 17 December 2010. As a consequence, pursuant to paragraph 3 of the Order, the plaintiff’s Further Amended Statement of Claim dated 26 August 2010 was struck out and there was judgment for the defendant.
5 The plaintiff now applies pursuant to Rule 24.06(b) for that judgment to be set aside.
6 17 December 2010 was a Friday. A Second Further Amended Statement of Claim was served on the following Tuesday, 21 December 2010. Thus, the Further Amended Statement of Claim was served two working days after the date stipulated in the Order of 8 December 2010.
7 The approach to be taken in respect to non-compliance with a self-executing order is conveniently set out in Jorgensen v Slater & Gordon Pty Ltd [2008] VSCA 110, where the Court (Maxwell ACJ and Forrest AJA) stated:
“9
The court has a wide discretion to relieve a party of the consequences of non-compliance with a self-executing order. The governing consideration, as in every aspect of practice and procedure, is what justice requires. As Burt CJ said in Link Blocks Pty Ltd v Fullin, all the circumstances must be weighed in the balance and
‘one must not … lose sight of the fact that the justice spoken of is an
even-handed justice to [both sides].’10 The power to relieve must be exercised with care. As Roskill LJ said in Samuels v Linzi Dresses Ltd, it is a power
‘which should be exercised cautiously and with due regard to the necessity for maintaining the principle that orders are made to be complied with and not to be ignored.’
We respectfully agree with what was said by Newnes J in the Western Australia Supreme Court in MTQ Holdings Pty Ltd v Lynch, as follows:
‘The authority of the court will equally be undermined, and the quality of justice for the innocent party eroded, if the ultimate sanction effected by the operation of a [self-executing] order can be avoided by showing that non-compliance with [that] order came about by the same sort of inattention or laxity that caused the order to be made in the first place.’
11 We would also adopt what Newnes J said regarding the considerations which should ordinarily be brought to bear in considering the exercise of this discretion. The court should have regard at least to the following matters:
(a)
the circumstances in which the self-executing order was made;
(b) the reasons for non-compliance with it; (c) the prejudice to the defaulting party if relief were not granted; and
(d) the prejudice to the innocent party if relief were granted.
12 As to the reasons for non-compliance, it is of the first importance to ascertain whether the failure to comply was wilful, that is, was reflective of deliberate disregard of, or indifference to, the court’s order. … .”
8 From the affidavit material before me it appears that the plaintiff’s solicitor, Nicholas Agetzis, was under a misapprehension as to when the Further Amended Statement of Claim was to be served. In an affidavit sworn 22 December 2010, he deposes to an exchange of emails and a conversation with the defendant’s solicitor indicating that he had mistakenly thought that my Order of 8 December 2010 provided for service of the Second Further Amended Statement of Claim on 18 December 2010, a Saturday, and therefore, service on the following Monday, 20 December 2010, would suffice. There is no explanation as to why the Second Further Amended Statement of Claim was not served on 20 December 2010. On 21 December 2010, Agetzis forwarded a letter to the defendant’s solicitors which stated, inter alia:
“As you well know, our client’s pleading was not delivered on Friday, 17 December 2010 by reason of an oversight. It was understood by our Counsel and his Instructor that our client had ten calendar days to file and serve its amended pleading. By oversight we mean that your Counsel’s draft orders which were ‘agreed’ and authenticated by the Court (despite discussions around ten days) provided for only nine days. On Friday you took the unreasonable position that you would not consent to a short extension of time notwithstanding this ‘misunderstanding’.”
9 The plaintiff applied promptly to set aside the default judgment by issuing the Summons seeking this on 23 December 2010. Mr Twigg properly conceded that the application was made promptly.
10 Mr Twigg, in opposing the plaintiff’s application to set aside the default judgment, submitted that the plaintiff was somewhat offhanded in its failure to comply with an order to which it had consented a matter of days beforehand. There is no explanation as to why the amended pleading was not served on 20 December 2010, the date when Agetzis states that he thought the amended pleading had to be served. On the other hand, there appears to have been some misunderstanding on Agetzis’ part as to when the amended pleading was due for service and, in my view, there was not deliberate non- compliance with the order of 8 December 2010. The application to set aside the judgment was made promptly and the defendant could not be prejudiced by a delay of two business days in the delivery of the amended pleading. In Jorgensen, the Court stated, at paragraph 33, that it was appropriate to ask “whether the punishment fits the crime”.
11 Subject to one matter, on balance, in all the circumstances, it would, in my view, be appropriate to set aside judgment for the defendant and, pursuant to Rule 24.06(a) of the Rules, to extend the time given by paragraph (2) of my Order of 8 December 2010 for the delivery of the amended pleading to 21 December 2010. However, if I should conclude that the plaintiff has no cause of action against the defendant, it would be pointless to set aside the judgment.
Rule 23.01
12 The defendant contends that the Second Further Amended Statement of Claim does not, in the words of Rule 23.01(1)(a) of the Rules: “disclose a cause of action”. The factual background is as follows.
13 By Contract of Sale made between Taras and the plaintiff dated 12 November 2004, Taras sold to the plaintiff Units 27 and 28, 85-91 Keilor Park Drive, Tullamarine (“the units”). Settlement occurred on 14 January 2005. The plaintiff pleads that the units are commercial properties and that the defendant, a builder, designed and constructed the units. It was engaged by Taras to do this. The defendant and Taras share common directors and a common registered office. Latent structural defects subsequently became apparent in the units and the floor slab and/or the walls/foundations moved, causing the plaintiff to suffer loss and damage.
14 The leading case in this area is Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515. There, the plaintiff purchased a property. More than twelve months later, the property was found to be suffering substantial structural distress caused by settlement of the foundations of the building. The owner sued the consulting engineers who designed the foundations. The plurality (Gleeson CJ, Gummow, Hayne and Heydon JJ) considered Bryan v Maloney (1995) 182 CLR 609 in some detail. They stated, at page 526, that there, the Court decided that the builder of a dwelling house owed a subsequent purchaser of the house:
“… a duty to take reasonable care to avoid the economic loss which a subsequent purchaser suffered as a result of the diminution in value of the house when the fabric of the building cracked because the footings were inadequate.”
15 At page 527, their Honours stated:
“It is evident, then, that the conclusion that the builder owed a subsequent owner a duty to take reasonable care to avoid the economic loss which that subsequent owner had suffered depended upon conclusions that were reached about the relationship between the first owner and the builder. In particular, the decision in the case depended upon the anterior step of concluding that the builder owed the first owner a duty of care to avoid economic loss of that kind.
Both this anterior step, and the conclusion drawn from it, were considered in the context of the facts of the particular case — in which the building in question was a dwelling house. The propositions about assumption of responsibility by the builder and known reliance by the building owner were said to be characteristics of ‘the ordinary relationship between a builder of a house and the first owner’ (emphasis added).”
16 And at page 528:
“Second, the decision in Bryan v Maloney depended upon the view that ‘the overriding requirement of a relationship of proximity represents the conceptual determinant and the unifying theme of the categories of case in which the common law of negligence recognizes the existence of a duty to take reasonable care to avoid a reasonably foreseeable risk of injury to another’. It was the application of this ‘conceptual determinant’ of proximity that was seen as both permitting and requiring the equation of the duty owed to the first owner with the duty owed to the subsequent purchaser. Decisions of the court after Bryan v Maloney reveal that proximity is no longer seen as the ‘conceptual determinant’ in this area.”
17 And at page 529:
“The damage for which the appellant seeks a remedy in this case is the economic loss it alleges it has suffered as a result of buying a building which is defective. Circumstances can be imagined in which, had the defects not been discovered, some damage to person or property might have resulted from those defects. But that is not what has happened. The defects have been identified. Steps can be taken to prevent damage to person or property.
A view was adopted for a time in England that, because there was physical damage to the building, a claim of the kind made by the appellant was not solely for economic loss. That view was questioned in Sutherland Shire Council v Heyman and rejected in Bryan v Maloney. It was subsequently also rejected by the House of Lords in Murphy v Brentwood District Council. There is no reason now to reopen that debate and neither side in the present matter sought to do so. The damage which the appellant alleges it has suffered is pure economic loss.”
(my emphasis)
Here, too, the damage with which the plaintiff alleges it has suffered is pure economic loss.
18 The plurality continued, at page 529:
“Claims for damages for pure economic loss present peculiar difficulty. Competition is the hallmark of most forms of commercial activity in Australia. As Brennan J said in Bryan v Maloney:
‘If liability were to be imposed for the doing of anything which caused pure economic loss that was foreseeable, the tort of negligence would destroy commercial competition, sterilize many contracts and, in the well- known dictum of Chief Judge Cardozo, expose defendants to potential liability 'in an indeterminate amount for an indeterminate time to an indeterminate class'.’
That is why damages for pure economic loss are not recoverable if all that is shown is that the defendant's negligence was a cause of the loss and the loss was reasonably foreseeable.”
(my emphasis).
19 And at page 530:
“Since Caltex Oil, and most notably in Perre v Apand Pty Ltd, the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. ‘Vulnerability’, in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, ‘vulnerability’ is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. So, in Perre, the plaintiffs could do nothing to protect themselves from the economic consequences to them of the defendant's negligence in sowing a crop which caused the quarantining of the plaintiffs' land. In Hill v Van Erp, the intended beneficiary depended entirely upon the solicitor performing the client's retainer properly and the beneficiary could do nothing to ensure that this was done. But in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords, the financier could itself have made inquiries about the financial position of the company to which it was to lend money, rather than depend upon the auditor's certification of the accounts of the company.”
(my emphasis).
20 Particularly pertinent are the following comments of McHugh J, who agreed with the plurality, at page 558:
“But the most powerful reason for rejecting the proposed duty is that the first owners and purchasers of commercial buildings are ordinarily in a position to protect themselves from most losses that are likely to occur from defects in the construction of such buildings. Occasionally, a commercial building may be built or bought for an emotional rather than an economic reason. But in the overwhelming number of cases, commercial buildings are constructed or bought to make money. A commercial building is constructed or bought because it is perceived to be a suitable vehicle for investment. The prudent first owner or purchaser of such a building will compare the likely return on the capital investment with the potential risks including falls in the value of the building that may result from various factors, economic, social and physical. And no prudent purchaser would contemplate buying a building without determining whether it has existing or potential construction defects. Knowledge of its defects, actual or potential, is central to any evaluation of its worth as an investment. In so far as risks are uncertain or unknown, the prudent purchaser will factor the risk into the price or obtain contractual protections or, if necessary, walk away from the negotiations.
There are many means of protection open to first owners and purchasers of commercial buildings to cover the risk that the building may have latent defects. The first owner can enter into contractual arrangements with those involved in the construction. Those arrangements can include warranties concerning the fitness of the building for the purpose for which it was constructed. The first owner can supplement the contractual arrangements with those directly involved by obtaining similar warranties from directors and other persons connected with the construction of the building. The first owner can employ other professionals to check the work of those directly involved in the project. Subsequent purchasers can protect themselves by entering into similar arrangements with their vendor. They can take an assignment of the vendor's rights (if any) against the builders and others. They can minimise the risks of loss from physical defects by obtaining expert investigations of the building.”
(my emphasis).
21 In Caltex Refineries (Qld) Pty Limited v Stavar [2009] NSWCA 258, at paragraph 102, Allsop P stated:
“This rejection of any particular formula or methodology or test the application of which will yield an answer to the question whether there exists in any given circumstance a duty of care, and if so, its scope or content, has been accompanied by the identification of an approach to be used to assist in drawing the conclusion whether in novel circumstances the law imputes a duty and, if so, in identifying its scope or content. If the circumstances fall within an accepted category of duty, little or no difficulty arises. If, however, the posited duty is a novel one, the proper approach is to undertake a close analysis of the facts bearing on the relationship between the plaintiff and the putative tortfeasor by references to the ‘salient features’ or factors affecting the appropriateness of imputing a legal duty to take reasonable care to avoid harm or injury.”
He then gave an exhaustive list of seventeen potential salient features.
22 One of the salient features referred to by Allsop P, at paragraph 103, was:
“(d) the degree of vulnerability of the plaintiff to harm from the defendant’s conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself.”
23 In his written submission dated 2 February 2011, Mr McAndrew properly conceded that in Woolcock, “vulnerability was a critical factor”.
24 Here, the plaintiff was not “vulnerable”, in that it could have protected itself against latent defects appearing in the future by appropriate warranties and indemnities in the Contract of Sale for the units. In paragraph 8(g) of the Second Further Amended Statement of Claim, the plaintiff pleads:
“(i)
the Defendant had sole control over the design and construction of the Units that had been completed as at the date of purchase from Taras Nominees Pty Ltd on 12 November 2004;
(ii)
the latent structural defects referred to in paragraph 10 hereof (the structural defects):
A.
were not in fact known to the Plaintiff at the time of its purchase of the Units from Taras Nominees Pty Ltd on 12 November 2004 or settlement of the contract of sale on 14 January 2005;
B.
not reasonably manifest to the Plaintiff (or a reasonable person in the position of the Plaintiff) at the time of its purchase of the Units from Taras Nominees Pty Ltd on 12 November 2004 or settlement of the contract of sale on 14 January 2005;
C.
not reasonably manifest to a reasonable building consultant or the like engaged by the Plaintiff to conduct a pre purchase inspection by reason that:
(aa) the structural defects had not otherwise manifested at the time of the Plaintiff’s purchase of the Units from Taras Nominees on 12 November 2004 or settlement of the contract of sale on 14 January 2005;
(bb) it would be necessary for such a consultant to perform destructive work including exposing the footings before the structural defects would become reasonably manifest;
D.
measures taken by the Defendant during the design and construction process to ensure that the foundations are adequate cannot be repeated after the event with the same degree of precision or certainty;
E.
pre purchase engineer reports in relation to structural integrity of building such as the Units are not generally available in Victoria by reason that professional indemnity insurance is not generally available;
F.
it was not unreasonable for the Plaintiff to not insist upon warranties in the contracts of sale as to the structural soundness of the units by reason that such a warranty could not be priced into the contracts of sale because no one other than the Defendant could have provided such a warranty in light of the matters referred to in subparagraphs B to D herein;
(iii) by reason of the matters referred to in the preceding paragraph, the Plaintiff could not adequately protect its interests in relation to the discovery of latent structural defects referred to in paragraph 10 hereof prior to entry into the contracts of sale or settlement thereof.”
25 I fail to see why “it was not unreasonable for the plaintiff to not insist upon warranties in the Contracts of Sale as to the structural soundness of the units”, particularly when, as it alleges, there was a close relationship between Taras as first owner and the defendant as builder.
26 The “salient features” in this proceeding are, in my view:
• The units are commercial, not domestic properties. • The plaintiff was not vulnerable. 27 No Australian case has been cited to me where a builder of commercial premises was held to owe a duty of care to a subsequent purchaser to avoid pure economic loss resulting from latent defects in the premises. On the hearing of the application, Mr McAndrew rightly conceded that Woolcock raised real difficulties for the plaintiff. These difficulties are highlighted by the number of attempts the plaintiff has made to plead its case.
28 I am satisfied that the plaintiff’s Second Further Amended Statement of Claim does not disclose a cause of action.
29 It was common ground that the Civil Procedure Act 2010, which came into operation on 1 January 2011, applied to the defendant’s application. It provides:
“62 Defendant may apply for summary judgment in proceeding A defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim or part of that claim has no real prospect of success. 63 Summary judgment if no real prospect of success (1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success. (2) A court may give summary judgment in any civil proceeding under
subsection (1)—
(a) on the application of a plaintiff in a civil proceeding; (b) on the application of a defendant in a civil proceeding; (c) on the court's own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding. 64 Court may allow a matter to proceed to trial Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because—
(a) it is not in the interests of justice to do so; or (b)
the dispute is of such a nature that only a full hearing on the merits is appropriate.”
30 In Wheelahan v City of Casey (No 3) [2011] VSC 15, Osborn J considered these provisions. He stated, at paragraph 8:
“I accept that the test of ‘no real prospect of success’ may in some circumstances extend to cases not regarded as sufficiently hopeless to warrant striking out under the Rules.”
31 He continued:
“The appropriate enquiry is in terms of the section itself. In Swain v Hillman the Court of Appeal had to consider an English rule of court in similar terms. Lord Woolf MR said at p 92:
‘The words ‘no real prospect of succeeding’ do not need any amplification, they speak for themselves. The word ‘real’ distinguishes fanciful prospects of success or … they direct the Court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.’
The power should be exercised in accordance with the overarching purpose of the Civil Procedure Act 2010.
The High Court has recently addressed the background to, and differing nature of, broadly analogous provisions in Spencer v Commonwealth (2010) 241 CLR 118.
French CJ and Gummow J emphasised that powers of this kind must be exercised with caution:
‘The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process.’
They further stated in the context of the relevant Federal Court powers:
‘Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.’”
(my emphasis).
32 Here, the plaintiff’s claim in negligence, as articulated in the Second Further Amended Statement of Claim, is in conflict with Woolcock and, in my view, I “could justifiably conclude that the proceedings had no reasonable prospect of success”. Nor, do I think it appropriate, in the circumstances, to exercise my discretion pursuant to s.64 of the Civil Procedure Act 2010.
33 Having concluded that the Second Further Amended Statement of Claim does not disclose a cause of action and “has no real prospect of success”, it is, in my view, appropriate that there be judgment for the defendant. I therefore refuse to set aside paragraph 3 of my Order of 8 December 2010.
Joinder of Taras as Co-Defendant to the Proceeding
34 The plaintiff seeks to join Taras as a co-defendant pursuant to Rule 9.06 of the Rules.
35 Mr Twigg indicated that he had instructions to appear for Taras.
36 As appears from a Draft Proposed Second Further Amended Statement of Claim dated 21 December 2010, the plaintiff bases its claim against Taras upon misleading and deceptive conduct and unconscionable conduct pursuant to the Trade Practices Act 1974 (Cth) and the Victorian Fair Trading Act 1999. It appears that it particularly relies upon the close relationship between the defendant and Taras. Mr Twigg submitted that leave to join Taras should not be given since the six-year limitation period for bringing a proceeding against it from the date the cause of action has accrued has expired – see s.82 of the Trade Practices Act and s.169 of the Fair Trading Act. Mr McAndrew submitted however, that time commenced running against the plaintiff, not from the date of the Contract of Sale, 12 November 2004, nor settlement date of 14 January 2005, but from the manifestation of the latent defects subsequently. He relied upon Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, at 527, per Mason CJ, Dawson J, Gaudron J and McHugh J, suggesting that time only starts running from the manifestation of the latent defects. The plurality stated:
“The concept of loss or damage in the context of misrepresentations
Economic loss may take a variety of forms and, as Gaudron J noted in Hawkins v Clayton, the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough.
When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of ‘loss or damage’. And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired. To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an everpresent risk of undercompensation or overcompensation, the risk of the former being the greater.”
37 Mr McAndrew also relied upon comments of Brennan J, at pages 536 and 537, to the same effect.
38 Mr Twigg submitted that the plaintiff was seeking to rely upon a representation by mere silence. Mr McAndrew responded that on account of the relationship between the defendant and Taras, there was an obligation to disclose relevant facts.
39 In all the circumstances, I am prepared to allow the plaintiff to substitute Taras as a defendant in the proceeding and give the plaintiff leave to file and serve an Amended Statement of Claim against Taras in substantial conformity with the 21 December 2010 draft, so far as it concerns Taras.
40 I add that I suspect that the plaintiff may have some difficulty in establishing its claim against Taras.
Summary
41 I refuse the defendant’s application to set aside the judgment entered against it on 17 December 2010. The plaintiff has leave to substitute Taras as a defendant in the proceeding.
42 I will hear from the parties with respect to the future conduct of the proceeding, the third party proceeding and costs.
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