Anascot Pty Ltd v Conservation Commission of Western Australia - [2015] WASC 361

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ANASCOT PTY LTD -v- CONSERVATION COMMISSION OF WESTERN AUSTRALIA [2015] WASC 361

CORAM: MASTER SANDERSON

HEARD: 23 JULY 2015

DELIVERED : 29 SEPTEMBER 2015

PUBLISHED : 30 SEPTEMBER 2015

FILE NO/S: CIV 2112 of 2012

BETWEEN: ANASCOT PTY LTD
First Plaintiff
ACACIA BROOK PTY LTD
Second Plaintiff
IVO NOMINEES PTY LTD
Third Plaintiff
TOSCANA (WA) PTY LTD
Fourth Plaintiff
AND
CONSERVATION COMMISSION OF WESTERN AUSTRALIA
First Defendant
THE STATE OF WESTERN AUSTRALIA
Second Defendant

Catchwords:

Practice and procedure - Application to disallow amendment to statement of claim made without leave - Turns on own facts

Legislation:

Civil Liability Act 2002 (WA)
Conservation and Land Management Act 1984 (WA)
Rules of the Supreme Court 1971 (WA), O 21, r 3

Result:

Application dismissed

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr D J Marsh
Second Plaintiff            :     Mr D J Marsh
Third Plaintiff               :     Mr D J Marsh
Fourth Plaintiff             :     Mr D J Marsh
First Defendant             :     No appearance
Second Defendant         :     Mr P D Quinlan SC & Mr A Shuy

Solicitors:

First Plaintiff                :     Solomon Brothers
Second Plaintiff            :     Solomon Brothers
Third Plaintiff               :     Solomon Brothers
Fourth Plaintiff             :     Solomon Brothers
First Defendant             :     No appearance
Second Defendant         :     State Solicitor for Western Australia

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

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541
Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296
Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146

MASTER SANDERSON: This is the second defendant's application to strike out certain paragraphs or parts of paragraphs of the plaintiff's amended statement of claim. The amendments were introduced on 20 March 2015 without leave under O 21 r 3(1) of the Rules of the Supreme Court 1971 (WA). The application is made pursuant to O 21 r 3(3). By O 21 r 3(5) the amendments are to be struck out if the case manager is satisfied that had an application for leave to make the amendments been made under r 5 leave to make the amendments would have been refused.
The plaintiffs by this action seek damages in relation to damage to property alleged to have been caused by two bush fires in early 2007. The bush fires were separated in time. The first bush fire commenced on 26 January 2007. It is referred to throughout the proceedings as 'PH 55'. That designation is shorthand for 'Perth Hills Fire 55'. The second bush fire commenced on 3 February 2007. It is referred to as 'PH 65'.
It is common ground that PH 55 commenced in State Forest 23. State Forest 23 was vested in the first defendant and managed by the Chief Executive Officer of the Department of Conservation & Land Management (now the Department of Parks & Wildlife) (the Department) under the Conservation and Land Management Act 1984 (WA). As the pleadings stood before amendment the plaintiffs allege that PH 65 commenced outside of State Forest 23 near one of the plaintiffs' properties and adjacent to the southern boundary of PH 55. It was said that PH 65 was a continuation of PH 55. The plaintiffs' claimed that PH 55 (and as a consequence PH 65) was caused by the negligence of the second defendant. It follows the cause of PH 55 (and by extension PH 65), is a central issue in the proceedings between the plaintiffs and the second defendant.
The second defendant admits that PH 55 commenced within an area of State Forest 23 that had previously been the subject of a fire referred to as PH 27. PH 27 had commenced on 16 December 2006 and burnt out approximately 230 ha of State Forest 23.
The defendants say, in my view correctly, that prior to the amendments in March 2015 the plaintiffs' sole allegation against the second defendant was that:
(a)Mr David Turner, on or about 24 January 2007 observed a fire within 10 m of the south edge of PH 27;
(b)Mr Turner reported that fire to Mr Steve Gunn (an officer of the Department) on 24 January 2007;
(c)Mr Gunn failed to inspect or cause inspection of the fire reported by Mr Turner;
(d)Mr Gunn's failure to inspect or extinguish or cause inspection or cause extinguishment of the fire allegedly reported by Mr Turner was negligent; and
(e)the second defendant is vicariously liable for Mr Gunn's negligence.
The second defendant submits that at all times since the commencement of the action the allegations against the second defendant have been confined to the allegations concerning Mr Gunn and the fire allegedly reported by Mr Turner. Counsel for the second defendant supported that submission by reference to the progress of the litigation.
Counsel pointed first to answer 1 of the particulars provided by the plaintiffs which identified the fire, the subject of the allegation concerning Mr Gunn, by reference to a map provided as schedule 1 to a draft statement of claim provided by the plaintiffs' solicitors on 8 May 2012. Second, counsel referred to answer 5 of the particulars which stated that PH 55 flared up at or near the location of the fire observed by Mr Turner. Third, the second defendant says informal discovery has been conducted on the basis of the allegation concerning Mr Gunn. That emerges from the affidavit of Alexander Robert Hay sworn 29 April 2015 at pages 127 ‑ 132, 190 and 198. Fourth, counsel noted the plaintiffs provided a statement by Mr Turner on 9 October 2013 which identified the location of the fire the subject of the allegation. Finally, counsel pointed to the fact the second defendant had prepared its defence on the basis of the allegation concerning Mr Gunn.
Counsel also pointed to the fact the second defendant pleaded in its defence that PH 55 commenced in an entirely different location of State Forest 23 than the location identified by Mr Turner. In their reply the plaintiffs join issue with that pleading.
The second defendant maintains the amendments to the statement of claim shift the focus of the claim entirely so as to allege a general failure in relation to the entire 230 ha the subject of PH 27. It was submitted the purpose of the amendments in the statement of claim was threefold. First, to allege direct as well as vicarious liability. To that extent the second defendant had no complaint.
The second defendant submits the amendments also alter the substance of the allegation relating to Mr Gunn from a failure to extinguish the fire to a failure to inspect the 'area where PH 27 met Dell Park Road'. Further, the second defendant says the amendments raise a new allegation of failure involving a failure to inspect PH 27 after it was mopped up.
The second defendant raises five grounds upon which it is says the amendments ought not be allowed. The first two of these grounds are what might be described as technical - the second defendant says the amendments are not properly pleaded and are inconsistent with the particulars. While that may be so it is a matter which counsel for the second defendant accepted could be rectified relatively simply. These two objections would not lead to the amendments being disallowed even if it was necessary to further refine the amended statement of claim and amend the particulars. The three substantive grounds relied upon by the second defendant are, first, the plaintiffs have had a sufficient opportunity to put their case and now seek to advance an inherently and substantially speculative case. Second, there is no proper explanation for the delay in making the amendments. Third, the delay and circumstances are such that the second defendant will suffer substantial prejudice.
It is important to note at this point the second defendant's application is based squarely on case management principles. To reinforce that point counsel during the course of his submissions made two important and proper concessions. The first was that the indorsement of claim on the writ was sufficiently broad to encompass the amendments. That leads on to the second point. There is no question here of what might be called the principles in Weldon v Neal being called into play. So any amendments which are permitted will operate from the date that the writ was issued and the amendments will not give rise to any fresh limitation issues.
Counsel for the second defendant relied squarely upon the High Court decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. In his written submissions counsel for the second defendant quoted from that decision as follows:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future [111]. (footnotes omitted)
Case management has had a somewhat chequered history since courts adopted such principles in the mid‑1990s. Courts took the view it was no longer satisfactory for parties to run litigation in their own way and in their own time. This was partly motivated by a need to make maximum use of available resources. Statements of principles such as those found in O 1 r 4A and r 4B(1) were seen as providing a guide as to how parties should conduct litigation. The robustness or otherwise of a particular case management regime was very much dependent upon the case manager. But the interests of justice are paramount. In Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 the High Court seemed to put something of a break on the use of case management principles if the result of a failure to comply with case management orders was an action was disposed of without trial. The J L Holdings decision became the last refuge of the recalcitrant litigant. That position changed with the Aon decision. That decision recognised the importance of case management and strengthened the hand of those who took the view a failure to comply with case management orders could be fatal to a party's position. The principles that now apply were summarised by Beech J in Hightime Investments Pty Ltd v Lungan [No 2] [2010] WASC 296 [51]. It is those principles which are to be applied to this case.
For their part the plaintiffs maintained the amendments did not materially effect the claim as put against the second defendant. They maintained the claim as originally pleaded contained the same elements as the claim pleaded in the amended statement of claim. With respect that seems to me not to be the case. In my view the second defendant correctly identified the nature of the original claim and pointed up the significant differences in the amended statement of claim. Given the conclusion I have reached in this matter it is unnecessary for me to examine in detail the plaintiffs' submissions. It is sufficient if I say I accept the second defendant's submissions and that I have proceeded on the basis the claim pleaded in the amended statement of claim is significantly different from the claim as originally pleaded.
The main thrust of the second defendant's complaints relates to the delay in bringing forward the amendment. Counsel for the second defendant pointed out the plaintiffs issued a letter of demand in 2008 but did not bring their action until shortly prior to the expiration of the limitation period in 2012. When they ultimately did bring an action it was on different grounds from originally foreshadowed. The evidence shows by the time the action was brought the officer at the heart of the allegation, Mr Gunn, had no recollection of any alleged report of the fire by Mr Turner. This is confirmed by the affidavit of Georg Raithel affirmed 31 March 2015 and filed in support of the application (see [14]). The second defendant maintains the plaintiffs had full opportunity to put their case and when they did so they focused entirely on an allegation concerning Mr Gunn. The second defendant in preparing its defence has responded directly to that allegation.
The second defendant points to the fact the plaintiffs have not in the affidavit material they filed proffered any explanation for belatedly altering their claim and adding a new claim relating to an alleged and unparticularised failure to properly manage PH 27. The second defendant maintains this is a strong factor in favour of striking out the amendments.
The second defendant goes further and says the delay is such that a fair trial of the issues is no longer possible. In particular they say the Department responded to and managed PH 27 over a period extending from 17 December 2006 to the commencement of PH 55 on 26 January 2007. A range of officers and conservation employees were responsible for making efforts to manage the risk associate with PH 27. The decisions and efforts were taken over eight years ago in a complex operational context where a range of factors and constraints were potentially relevant based on various information sources and various officers and employees who had made direct observations as to the situation at PH 27. They say limited records are available. Further potential witnesses that can still be identified have in some cases left the Department and are unwilling to assist.
To illustrate the claim there are failing memories the second defendant refers to Mr Low who was directly involved with PH 27. He says he has no recollection of events despite consulting relevant records (see affidavit of Keith Campbell Low sworn 22 April 2015 [64]). On behalf of the second defendant it was submitted it can readily be inferred that recollections of witnesses who might still be available are likely to have been significantly eroded and potentially non‑existent.
This prejudice which flows from the lapse of time - and which is sometimes referred to as 'general prejudice' - was considered by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. His Honour said:
'[W]here there is delay the whole quality of justice deteriorates'. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, 'what has been forgotten can rarely be shown'. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose (551). (footnotes omitted)
In responding to the second defendant's submissions counsel for the plaintiffs dealt first with events prior to the filing of the writ and then events subsequent to the filing of the writ. Dealing with events prior to the filing of the writ counsel pointed out that substantial correspondence passed between the second defendant's solicitors and the plaintiffs' solicitors regarding the plaintiffs investigations. That correspondence culminated in an application for pre‑action discovery being made. Counsel noted the affidavit of Ivo Paul Letari sworn in support of an application for pre‑action discovery stated the plaintiffs were considering taking proceedings against the second defendant on the basis that the second defendant was vicariously liable in negligence for the failure of the Department to properly mop up PH 27 or PH 55.
Counsel for the plaintiffs also pointed out what the second defendant was attempting to do was limit the plaintiffs' case to the cause of action outlined in the letter before action. He submitted to do so effectively imposed a limitation period less than that provided for in the Civil Liability Act 2002 (WA). Counsel submitted discussions between parties pre‑action ought to be encouraged. To accept the submissions made on behalf of the second defendant would effectively mean a party would need to issue proceedings once it had set out its position in a letter of demand.
Turning then to events following the filing of the writ the plaintiffs' say the second defendant was aware of the plaintiffs' potential claims and should have undertaken a full investigation of all the circumstances surrounding the outbreak of the fire. Indeed the plaintiffs submit that was effectively what was done. Moreover, a report was prepared after investigations as to the causes of PH 55. On that basis the plaintiffs submit the second defendant has adequate records and there was proper investigation so as to fully inform the second defendant of the relevant facts surrounding these fires.
The plaintiffs do concede there may be some witnesses whose memory of the circumstances has faded with time. But they say it is not clear that any prejudice has or will be suffered by the defendants. They point to Mr Gunn whom they say did not have any recollection of the relevant events prior to the commencement of the action.
It must be acknowledged that the evidence of the plaintiffs does not contain a detailed explanation of why significant changes have been made to the plaintiffs' claim. But it must be borne in mind that the claims relate to bush fires and the circumstances in which those bush fires started or continued to burn was always going to be a matter of some speculation. In my view while the passage of time is unfortunate but it is probably unavoidable. The plaintiffs have necessarily been refining their case looking closely at the cause of the first fire and attempting to present a picture which is coherent. That has resulted in the present amendments.
It is to be borne in mind that if these amendments are not allowed the action could presumably proceed on the basis of the pleadings as they stand. Given the plaintiffs now accept the claim as framed in the original proceeding was in error, the likely result is the plaintiffs would be put out of court. That significant impact on the plaintiffs' position is a factor which to my mind weighs heavily in favour of allowing the amendments.
In my view the second defendant's application ought be dismissed. The factors that lead me to that conclusion are as follows. First, the significant impact upon the plaintiffs if these amendments are not allowed. They will effectively have to abandon their cause of action. Second, the second defendant was in a position where detailed investigation as to the cause of the relevant fires was to be expected. That investigation has lead to the second defendant reaching a definite view as to how the fires occurred. While the records may not be perfect and while all witnesses who are relevant might not be available the second defendant is still in a reasonable position to defend the allegations made in the amended statement of claim. Finally, while the recollection of witnesses may have faded it is difficult to see there is specific prejudice to the second defendant by the delay. I accept there is general prejudice. That is something that affects all litigation to a greater or lesser degree. I am not satisfied in this case the degree of prejudice suffered by the second defendant is sufficient to warrant refusing to permit the amendments.

In general terms then I am satisfied the amendments ought be allowed. As I mentioned earlier the second defendant took objection to the form of the amendments and to the conflict between the amendments and the particulars. These are matters to which the plaintiffs should give some further attention. So while I would in principle allow the amendments it seems to me they must be further considered as to form. On publication of these reasons I will adjourn the matter to allow further discussion between the parties. I will also hear the parties as to costs.