Anderson v Joyce [No 2]
[2019] WADC 172
•10 DECEMBER 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: ANDERSON -v- JOYCE [No 2] [2019] WADC 172
CORAM: BOWDEN DCJ
HEARD: 2 DECEMBER 2019
DELIVERED : 10 DECEMBER 2019
FILE NO/S: CIV 359 of 2016
BETWEEN: GILLIAN MARGARET ANDERSON
Plaintiff
AND
CLARA LOUISE JOYCE
Defendant
Catchwords:
Appeal from principal registrar - Revised and updated particulars of damages
Legislation:
District Court Rules 2005 (WA)
Result:
Appeal allowed
Revised and updated particulars of damages disallowed
Leave to file further revised and updated particulars of damages
Representation:
Counsel:
| Plaintiff | : | Mr T Lampropoulos QC & Mr B G Bradley |
| Defendant | : | Mr M D Cuerden QC & Mr D M G Burton |
Solicitors:
| Plaintiff | : | Bradley Bayly Legal |
| Defendant | : | SRB Legal |
Case(s) referred to in decision(s):
Aon Risk Services Australia Ltd v Australia National University (2009) 239 CLR 175; [2009] HCA 27
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Commonwealth of Australia v Griffiths [2007] NSWCA 370
De Sales v Ingrilli (2002) 212 CLR 338
Hancock Shipping Co Ltd v Kawasaki Heavy Industries Ltd [1992] 1WLR 1025
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Nguyen v Nguyen (1990) 169 CLR 245
Public Trustee v Zoanetti (1945) 70 CLR 266
Ruby v Marsh (1975) 132 CLR 642
BOWDEN DCJ:
The application
On 20 June 2019 the plaintiff was granted leave by the principal registrar to file revised and updated particulars of damages (the revised particulars) pursuant to r 45C of the District Court Rules 2005 (WA) (DCR). The defendant appeals that decision.
This appeal is a review of the matter de novo: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26.
A brief history of the matter
The plaintiff's action is brought under the Fatal Accidents Act 1959 (WA) (the Act) on behalf of the widow, Ms Anderson and her children, in respect of the death of her late husband on 23 May 2013.
The defendant has admitted liability. The issues that were originally to be determined at the trial, listed for eight days commencing 24 June 2019, were quantum and contributory negligence.
As a result of the plaintiff being permitted to file the revised particulars, the trial proceeded on the question of contributory negligence only with quantum to be determined at a later date.
On 26 August 2019 his Honour Judge Herron delivered his judgment dismissing the defendant's claim for contributory negligence and finding that the defendant was liable for 100% of the damages.
That decision is under appeal and the appeal is unlikely to be heard before March or April 2020.
Damages under the Act
Under the Act the court may give damages 'as it thinks proportionate to the injury resulting from the death'. Injury includes pecuniary loss: s 6(2), De Sales v Ingrilli (2002) 212 CLR 338.
Damages are recoverable under the Act for loss of material benefits or, loss of the material prospects of material benefits which depend on the continuance of the life of the deceased. What must be ascertained is whether any and what loss has been sustained by the relatives of the deceased after comparing the material benefits depending upon his life with any material gain accruing from his death: PublicTrustee v Zoanetti (1945) 70 CLR 266, 279.
Damages are therefore recoverable under the Act for lost material and pecuniary benefits which a claimant could have reasonably expected to receive if the deceased had not passed away, whether as a right or otherwise: Public Trustee v Zoanetti.
The loss of an expected benefit is not restricted to loss of direct financial support it includes the value of services the deceased would have provided around the home: Nguyen v Nguyen (1990) 169 CLR 245.
Calculating such losses involves speculative judgments which cannot be made with accuracy and the court assesses what benefits the deceased would have brought to the plaintiff in the form of either income or, by the provision of services and determines the share of that benefit that would have been enjoyed by the claimants during the deceased's lifetime. Then it determines the period for which a claimant could reasonably have expected to receive the benefit. Allowances are made for contingencies: De Sales v Ingrilli [14] ‑ [15] (Gleeson CJ).
Damages are not awarded according to any needs but according to a perceived expectation of pecuniary benefit by the claimants.
If it is reasonably necessary to replace services provided by the deceased which provided a benefit to the claimants the cost of replacing those services can create a right to claim damages for that loss.
An expected financial benefit may be in the form of income or a capital asset or a combination of both that would have been received in time. It is relevant to take into account the increased estate which have been accumulated had the deceased lived and would have probably have been left ultimately to the dependants: H Luntz, Assessment of Damages for Personal Injury and Death (4th ed) [9.2.90].
The court is essentially valuing the chance that the claimants would have expected to receive benefits if the deceased had not passed away.
It is not necessary to show the claimant would have received any particular benefit. As long as the chance is more than merely speculative or fanciful: H Luntz, Assessment of Damages for Personal Injury and Death (4th ed, 2002).
The loss occurs at the time of the death and is assessed as at that time although subsequent events may be relevant to the assessment of the value of that loss in that they may make it unnecessary for the court to speculate about the possibilities that may have existed at the date of death when the facts themselves have now become known: Ruby v Marsh (1975) 132 CLR 642, 658.
The plaintiff's original particulars of damages
The plaintiff's position is complicated to some extent because the deceased was not a PAYG wage earner. He carried on four businesses, two metal fabrication businesses and two wineries, which together may be referred to as the group of companies. He also received a relatively modest income from his employment as a company director.
It appears that the deceased had legally structured his financial affairs in such a way that, his taxable income was either nil for most financial years preceding his death or, of such a modest amount that it qualified for a low income earners rebate.
The plaintiff's original particular of damages filed on 19 February 2018 consist of 10 paragraphs. The plaintiff's claim, inclusive of past interest, was for $2,808,071 including special damages of $26,346.30 (the original claim).
The plaintiff's original particulars assessed damages by reference to the notional cost of replacing the deceased's services within the group of companies. The value of those services is said to be the commercial costs of replacing all those services.
It seems not to be in dispute that the plaintiff advised the defendant that, at the forthcoming trial, they were not calling expert accounting evidence to support the original claim but were calling evidence solely as to the cost of replacing the deceased's services to the group of companies.
The circumstances in which the plaintiff's application to file the revised particulars occurred
The trial was originally listed to commence on 24 June 2019.
The defendant filed in accordance with orders of the court their opening submissions for trial dated 10 June 2019. In those submissions they claimed that the very basis upon which the plaintiff had calculated the damages was flawed. The defendant pointed out that the deceased's services were not provided to the plaintiff herself but to the group of companies and, the cost of replacing those services, were costs to those companies not the plaintiff.
The defendant says that the plaintiff needs to show how the costs incurred by the group of companies transferred to an actual loss to the plaintiff.
The plaintiff says as a result of these written submissions they had to scramble to address the issues raised and prepared the revised particulars in haste.
The revised particulars
The plaintiff's revised particulars are 14 pages in length and cover 27 paragraphs and claim, inclusive of past interest and special damages, a total of $5,713,188. The additional amount claimed is approximately $2,617,000 (the new claim). This is more than double the original claim.
In very general terms, the plaintiff's revised particulars say that the deceased had successfully run the four businesses over a long period of time and following his death his services were lost to the four businesses.
As the result of his death, a manager was appointed to one of the metal businesses. In respect of the wine businesses, some existing staff took on additional duties and additional staff were taken on.
The plaintiff further says that in relation to the metal business, the replacement staff were not able to adequately replace the level and quantity of services provided by the deceased.
The plaintiff says the replacement staff entered into a particularly disastrous contract (The Gap Project) which resulted in a loss of approximately $830,000, and caused the business to suffer cash flow difficulties. The plaintiff's claim is that this loss was suffered because the metal fabrication business underquoted on its bid. The plaintiff says this occurred because the replacement staff did not have the deceased's business acumen.
The plaintiff say that if the deceased had not been killed he would have successfully managed the group of companies and would not have made the business decisions that resulted in The Gap Project tender's losses. They say that the defendant's argument that the tender on The Gap Project was the sole cause of losses to that company fails to recognise that if the deceased was in charge, that tender would not have occurred. They say the absence of the deceased's business experience was a contributing factor to that loss.
Further, the plaintiff says that the replacement staff failed to lodge BAS returns and make employer superannuation contributions. The plaintiff as a director of the company became personally liable for an amount of approximately $800,000 owing to the Australian Taxation Office (ATO). Further, legal fees relating to this issue were approximately $15,000 (taxation expenses).
In addition, the replacement staff did not maintain proper books of accounts.
As a result of these financial issues, the metal businesses went into administration. The administration fees and associated legal fees were approximately $750,000 and consultant fees of $15,000 (administration expenses).
Moreover the administration of one of the businesses triggered a default under a bank facility. It was necessary to establish new financial facilities, which resulted in additional interest of approximately $480,000. Additional fees charged in relation to that facility included legal fees of $40,000, establishment fees on the new loans of $270,000, fees on discharging loans of $25,000, making a total sum of $815,000 (refinancing expenses).
The plaintiff claims that the administrator was appointed because of the losses suffered through 'The Gap Project', the business suffered cash flow difficulties. The plaintiff claims this is a result of replacement staff lacking the deceased's business acumen and entering into disastrous business deals as well as the replacement staff failing to lodge BAS returns or make the employer superannuation contributions and failing to keep proper books of accounts. Further, they say the deceased would not have run the businesses in such a manner and would not have made the business decision that resulted in the administration and the taxation, administration and refinancing expenses would not have occurred.
As the result of the matters referred to above it was necessary to sell the metal businesses.
The revised particulars say that the losses referred to above suffered after the deceased's death would not have been suffered if the deceased had not passed away and had continued to provide his services to the group of companies.
The revised particulars then claim that the true measure of the pecuniary benefits lost to the plaintiff as the result of the death can be quantified as the value of the loss of the deceased services to the group of companies themselves which is equivalent to the commercial cost of replacing his services to the group of companies (which the plaintiff has always claimed) and the amount of losses which would not have occurred if the deceased had not passed away and had continued to provide his services to the group of companies (the new claim consisting of the taxation, administration and refinancing expenses and interest on those amounts).
The plaintiff's submission in support of the updated particulars
The plaintiff accepts that they had to scramble to prepare the revised particulars after they received the defendant's opening trial submissions. They say the particulars were prepared in some haste and indeed they are still obtaining further financial evidence and intend to further revise the particulars when that financial evidence becomes available.
The plaintiff says they need to prove a reasonable expectation that the plaintiff would have received material benefits from the operation of the companies and the value of those benefits in her hands. Accordingly anything that reduces the estate as a result of the deceased's death will affect what the plaintiff could otherwise have expected to receive.
The plaintiff says that the group's assets would have continued to accumulate had the deceased lived and the plaintiff reasonably expected to have received those benefits in due course.
The plaintiff says that the deceased business acumen could not be replaced readily.
The plaintiff says the overall effect of the wrongful death and the sudden loss of the deceased's business acumen to the group of companies created substantial losses and expenses to the group, which has diminished the group's income and assets.
The plaintiff says she had a reasonable expectation that those assets and income would have flown through to her and the losses referred to in the new claim have substantially reduced the benefits that she would have otherwise have expected to receive.
The only issue is placing the value on those lost services and the loss of chance of receiving a higher pecuniary benefit that she would now receive.
The plaintiff says that the defendant's argument that, the losses in the new claim were suffered by companies in the group and not the plaintiff, fails to recognise that those losses resulted in monies being drained from the group and those losses diminished the financial benefits that the plaintiff would otherwise have enjoyed from the success of the group. The plaintiff says those loses would not have been suffered if the deceased had not passed away.
They say they are entitled to argue that had the deceased not died those matters would not have occurred and there is a proper basis for their claim because the value of the group would not have been diminished and the plaintiff would have had a reasonable expectation of receiving a greater benefit than she now is able to receive.
They say the damages are not too remote and the plaintiff's claim is arguable and not hopeless and should be tested at trial.
The plaintiff says that the defendant is in effect trying to summarily dispose of the new claim referred to in their revised particulars.
They say that there is a real question to be tried and the matter is inappropriate to be disposed of in a summary way.
The plaintiff says that not to allow the revised particulars would deprive them of the right to a contested hearing on the new claim. Accordingly principals akin to those which apply to summary judgment applications such as the need to ensure that there is no real question to be tried and exercising real caution before making an order which effectively summary disposes of their new claim should apply: Commonwealth of Australia v Griffiths [2007] NSWCA 370.
As to the defendant's claim that the particulars do not adequately identify the damages within the DCR r 45C(4), the plaintiff says that consideration must be given to the fact that what is being assessed is not a precise arithmetic calculation but the loss of a chance and the particulars set out in detail, perhaps more detail than is required, the basis upon which the loss of chance is claimed.
However, they accept that more detail will be provided in the further revised particulars once further evidence has been obtained.
They say that while case management issues identified by Aon Risk Services Australia Ltd v Australia National University (2009) 239 CLR 175; [2009] HCA 27 are relevant consideration must be given to this appeal being a hearing de nova and as a result of the appeal against Judge Heron's decision which is at least four months away from being heard the new quantum trial date is even further away. They say the interests of justice as such that the revised particulars ought to stand.
The defendant's submissions
The defendant says the new claims which total $2.6 million are not reasonably arguable.
The defendant says the revised particulars details losses suffered by the group of companies formerly run by the deceased which are not damages that the plaintiff is entitled to obtain as they were losses suffered by those companies and not by the plaintiff.
The defendant does not dispute that there could be a connection between losses to the group of companies previously run by the deceased and losses suffered by the plaintiff. However, the particulars must identify what those losses are and how the loss to the companies translate to actual losses to her.
Further, the defendant says that the revised particulars of do not comply with the DCR r 45C(4) in that they do not set out in detail the amount the plaintiff is claiming as a loss, the justification of the claim and how it is calculated. They say that the particulars need to identify how the alleged losses to the companies' amount to recoverable losses suffered by the plaintiff and specify how the amounts have been calculated.
The defendant argues that DCR r 48(a) which deals with applications to amend pleadings is wide enough to include particulars of damages, or if it does not, the same principles apply. They say that generally an affidavit is required to explain why the amendment is necessary and set out the facts that have arisen since the time expired for amendment and the ground as to why the amendment is necessary.
The defendant say the plaintiff's affidavit of 19 June 2019 gives no reason why the amendment is necessary other than in saying, that in the course of preparing for trial and in light of the defendant's opening submissions for trial the plaintiff and her legal advisers had cause to revisit the issue of losses and additional fees/expenses and that the financial records had finally been put in some kind of order and that claimed losses could not be properly identified and quantified.
The defendant says the plaintiff's application must be considered in n the context of the plaintiff's earlier forensic decision that the only losses that would be claimed were essentially the notional costs of replacing the deceased's services to the businesses.
The defendant says that this forensic decision changed after they filed their opening submissions for trial on 10 June 2019. They say the plaintiff could not reasonably argue that the matters raised in those submissions took them by surprise and the change in the plaintiff's forensic position is not an appropriate basis to grant leave to file revised particulars.
In addition the defendant says much of the revised particulars is in the nature of evidence by way of argument and resembles submissions rather than particulars.
The defendant also argues that the particulars should have been refused given that it necessitated an adjournment of the trial as to the assessment of damages in accordance with the principles referred to in Aon Risk Services Australia Ltd v Australia National University.
The defendant recognises that the adjourned cannot be undone. However they says that does not mean that an erroneous decision to allow the updated particulars should be allowed to stand.
The defendant says they will be put to considerable further costs and delay in investigating and obtaining appropriate expert evidence to deal with the amendments and the length of the trial is likely to be significantly increased if the plaintiff is allowed to file the revised particulars.
The defendant say the new claim in the revised particulars is outside the scope of the pleadings and made approximately six years after the deceased death.
Two other grounds referred to in the submission being appeal grounds (iv) and (v) were either abandoned or not pressed.
Conclusions
As this is a hearing de novo, I must approach the question afresh taking into account all of the circumstances that now exist.
The reality is that the trial over quantum is at least four months away.
I recognise the validity of case management arguments: Aon Risk Services Australia Ltd v Australia National University.
Aon Risk Services Australia v Australia National University makes clear applications to amend pleadings or writs (and I include particulars of damages in this regard) must be considered in the context of modern case management principles.
Whilst recognising that those principles should not supplant the objective of doing justice between the parties, the waste of public resources, undue delay and the concomitant strain and uncertainty imposed on litigations are all matters that should be taken into account in exercising the discretion as to whether to allow the further particulars to be filed.
There is significant public interest in the administration of civil justice and there is a responsibility on courts to ensure that the limited resources the State commits to that purpose are not wasted. There is a potential for loss of public confidence if the courts too readily approve applications made without adequate explanation or justification particularly when amendments which if granted give rise to adjournments or vacations of fixed trial dates. However, the overriding consideration must be the interest of justice.
The burden of persuading the court the revised particulars will not cause prejudice to the other party is on the party seeking the amendment: Hancock Shipping Co Ltd v Kawasaki Heavy Industries Ltd [1992] 1WLR 1025. In this regard the defendant fairly and frankly conceded that they cannot point to any particular prejudice other than that associated with 'normal prejudice' that results from late revised particulars and delayed trials.
In exercising the discretion, the reasons for the delay in applying for an amendment are to be considered and a point can be reached where the court may consider it is simply too late to allow amendments having regard to all the circumstances and the need for courts to ensure litigation is promoted in an efficient and timely manner: Kendall and Curthoys, Civil Procedure Western Australia [21.5.2].
The plaintiff in this case bears the onus of showing that the justice of the case requires the exercise of discretion in her favour: Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 551 ‑ 553.
Delays effect on the quality of justice as the longer the delays the more likely it is that the case will be decided on less evidence than was available to the parties at the time of the cause of action arose and relevant evidence is likely to be lost and that it can be oppressive to a party is ready for trial: Brisbane South Regional Health Authority v Taylor.
I do not accept the defendant's fundamental proposition that the new claims are not reasonably arguable. It is reasonably arguable, in my view, that if the group of companies suffered losses it reduces the value of the group and thereby the amount that the plaintiff could reasonably expect to receive as a material benefit.
Issues of remoteness and the casual connection of the losses suffered by the plaintiff and the group of companies will clearly arise however it cannot be said that the manner in which the plaintiff wishes to pursue their claim is unarguable and does not create a triable issue.
I do not accept the defendant's argument that the new claim in the revised particulars is outside the scope of the pleadings. The pleadings clearly claim loss of financial benefits which would otherwise have been provided by the deceased over the balance of his natural life, including past and future financial support. The revised particulars add a new aspect of the type of financial support that is said to have been lost but in my view is within the pleading parameters. The new claim has been raised six years after the deceased death but it is just a different aspect of the plaintiff's loss of financial support and the loss of financial support has always been claimed.
It is irrelevant that the plaintiff may have had to scramble to address the issues and prepared the revised particulars in haste.
It is relevant however, that the trial is at least four months away and the plaintiff says they would in any event be filing further revised particulars once further evidence has been obtained.
The plaintiff says that the further evidence they are trying to obtain is as a result of the replacement staff not keeping the financial records in a proper and orderly manner.
The defendant accepts that they cannot point to any particular specific prejudice.
In any event and of more significance, the updated particulars fail to clearly address the issue of how the losses to the group of companies translate directly to losses that the plaintiff reasonably expected to receive as a benefits.
I agree that mathematical accuracy is not possible and that the court is required to value the chance that the claimants would have received such benefits.
I agree with the defendant's submissions that the revised particulars are more akin to a combination of statement of evidence and submissions in support of the particulars that particulars and, whilst it is possible to ascertain the details of the amount claimed the precise basis for the justification for the claim and how it is calculated is not clear.
I agree that they do not fulfil the DCR r 45C(3) requirements. The revised particulars state the losses to the company and in effect say or imply that those losses are losses to the plaintiff.
The revised particulars make no attempt to determine how the company losses affect the share of the benefits that would have been enjoyed by the plaintiffs during the deceased's lifetime or what the plaintiff's share of those benefits was.
Leave ought not be granted to file the revised particulars in their current form and the appeal ought be allowed.
In my view, the plaintiff's recent forensic decision to include the new claim for the reasons indicated in her affidavit that is that she and her advices have decided to revisit the issue of losses and additional fees and expenses incurred is not in itself a reason to refuse leave.
Revisiting forensic decisions occurs from time to time in litigation and is not a reason to refuse leave for further updated particulars in the proper form particular when the trial is at the very least four months away and considering the time required for the appeal court to deliver a decision and the pressure on the district court for trial dates more likely twelve months away.
The quantum trial is clearly many months away and the defendant concedes that it suffers no prejudice other than the general prejudice associated with delays arising from the provision of late particulars. The interest of justice in having the new damages claim tried outweighs the disadvantage to the defendant which can be cured by a costs order.
The orders that I make in relation to the appeal and to case manage the matter are as follows:
1.The order of the principal registrar allowing the plaintiff to file revised and updated particulars of damages made 21 June 2019 be set aside, save as to the order to costs.
2.The revised and updated particulars of 18 June 2019 be disallowed.
3.The plaintiff have leave to file further proposed revised and updated particulars of damages pursuant to DCR r 45C by 4.00 pm, 14 February 2020 .
4.The defendant file any application to set aside the further proposed revised and updated particulars of damages by 4.00 pm, 6 March 2020.
5.The costs of the appeal be reserved.
6.There be liberty to apply in respect of the time limits referred to in orders 3 and 4.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AO
Associate to Judge Bowden10 DECEMBER 2019
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