Aquatec-Maxcon Pty Ltd v Barwon Regional Water Authority (No 7)
[2007] VSC 213
•6 July 2007
a
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST
No. 7091 of 2000
| AQUATEC-MAXCON PTY LTD (ACN 002 250 482) | Plaintiff |
| v | |
| BARWON REGION WATER AUTHORITY | Defendant |
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JUDGE: | BYRNE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 June 2007 | |
DATE OF JUDGMENT: | 6 July 2007 | |
CASE MAY BE CITED AS: | Aquatec-Maxcon Pty Ltd v Barwon Region Water Authority (No. 7) | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 213 | |
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Practice and Procedure – amendment of pleading after trial – deliberate forensic decision – prejudice to other parties – amendment refused.
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APPEARANCES: | Counsel | Solicitors |
For Wynton Stone | Mr D J O’Callaghan SC and Dr Michael Rush | Clayton Utz |
For Barrett Fuller | Mr John R. Dixon | Phillips Fox |
HIS HONOUR:
At this, the final round of judgments, other than those for costs, JJP Geotechnical Engineering Pty Ltd (formerly known as Barrett Fuller Partners), known in this proceeding as Barrett Fuller, seeks a final order dismissing the claim of Wynton Stone Australia Pty Ltd (in liquidation), known in this proceeding as Wynton Stone, against it for apportionment. Counsel for Wynton Stone resisted this, seeking judgment for $4,138,696 plus interest for breach of contract and, if this be necessary, leave to amend its claim to include a contract claim to support this judgment.
An examination of the Wynton Stone statement of claim[1] shows that it will not support the judgment sought. If this relief is to be sought, leave to amend must first be given. In order to understand the positions of the contending parties, it is, I regret, necessary to examine the pleadings in this case.
[1]Fourth further amended statement of claim of fourth defendant by counterclaim (Wynton Stone Australia Pty Ltd) against second, third, fifth and sixth defendants by counterclaim and the sixth third party (TTW), amended by leave granted on 9 December 2005.
It will be recalled that this project, like many building projects, was structured by a succession of contracts whereby the head contractor sub-let various parts of the work to a sub-contractor which did the same, and so on. In this project, insofar as is here relevant, there were five layers of contract:
(1) Between Barwon and Aquatec a design and construct head contract.
(2)Between Aquatec and Minson Nacap a design and construct sub-contract for structural and civil works.
(3)Between Minson Nacap and Montgomery Watson a design services agreement for the design of the structural and civil works.
(4)Between Montgomery Watson and Wynton Stone a sub-consultancy agreement for structural design.
(5)Between Wynton Stone and Barrett Fuller a consultancy agreement for geotechnical works.
This is shown on the chart which is included in my March 2006 Judgment.[2] It will be seen from this chart that there is a further contractual layer involving TTW which took over Wynton Stone’s work. Yet another layer, which is not of great relevance for present purposes, was constituted by the design agreement entered into between Barwon and its architect, Fisher Stewart.
[2][2006] VSC 117, at [14].
The structure of the litigation, again, as is not uncommon, reflected this contractual structure. I will leave to one side the fact that the plaintiff was in fact the head contractor, Aquatec. For present purposes, I look only at the counterclaim which provided the basis for the trial. In its simplest form, Barwon as proprietor sued its head contractor, Aquatec, who sued Minson Nacap, who sued Montgomery Watson, who sued Wynton Stone, each alleging in its own way that the person sued was in breach of its contract with the claimant who was the party immediately above it in the contractual chain.
The matter becomes more complicated by the requirements of s. 131 of the Building Act 1993 that judgment be apportioned between those responsible. There was the further procedural requirement of that statute that apportionment be available only between defendants.
And so, for example, Aquatec, being sued by Barwon for damages, could seek to pass its liability to Minson Nacap by suing it as a third party seeking damages equal to the amount it was liable to pay Barwon. It might also seek to lay off the risk of the judgment which Barwon sought against it by seeking to apportion its responsibility for Barwon’s loss with Minson Nacap pursuant to s. 131. But, in order for Aquatec to do this, the claim by Barwon against it had to be a claim for damages and, further, the person against whom apportionment was sought had to be a defendant, not a third party. This second requirement meant that Aquatec, as defendant to Barwon’s claim, had to join Minson Nacap as a co-defendant and, further, present a case that Minson Nacap was liable in damages, not to Aquatec, but to Barwon. Given the contractual structure of the project this was a claim in tort for breach by Minson Nacap of a duty of care owed to Barwon.
The consequence of the application of s. 131 to this proceeding was as follows. First, Barwon sued Aquatec in contract. Aquatec then joined as co-defendants Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW, alleging that they were, in various ways, in breach of a duty of care owed to Barwon.[3] Second, Aquatec sued Minson Nacap as a third party in contract. To this claim were added as co-defendants Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW against whom it was alleged that they, in various ways, were in breach of a duty owed to Aquatec.[4] Third, Minson Nacap sued Montgomery Watson as a fourth party in contract. To this claim were added Aquatec, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW against whom it was alleged that they were each in breach of a duty of care owed to Minson Nacap.
[3][2006] VSC 117, at [34].
[4][2006] VSC 117, at [42].
At this point, the path becomes somewhat more confused. Montgomery Watson filed a single compendious document entitled third party statement of claim, which was taken to have achieved a number of purposes. It may, as a matter of strict procedure, have achieved none of these but no point of this nature was taken at trial. For my purposes it is sufficient to note that the document made a true third party claim against Wynton Stone seeking indemnity in terms of its sub-consultancy agreement. It also sought apportionment against Aquatec, Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW. The document in its role as a claim for apportionment sought the usual claim to apportion among most other parties Montgomery Watson’s liability to Minson Nacap. But, in addition, it sought also to apportion to most other parties Montgomery Watson’s liabilities as a defendant to the Barwon first layer claim and as a defendant to the Aquatec second layer claim.[5]
[5][2006] VSC 117, at [45].
It now becomes possible to understand the claims brought by Wynton Stone against the geotechnical engineer, Barrett Fuller. They are contained in its fourth further amended statement of claim filed by leave on 9 December 2005. Like the Montgomery Watson pleading, it seeks to achieve a number of objectives to pursue a claim against TTW and to seek apportionment.
At trial, Wynton Stone took the position that Barrett Fuller was retained, not by it, but by Montgomery Watson. Accordingly, in the original pleading there is an allegation of a breach by Barrett Fuller of a duty of care owed to Wynton Stone. But no loss or damage is alleged and no damages are sought. In its November amendment[6] Wynton Stone asserted as a secondary position that there was in fact a contract between it and Barrett Fuller. In paragraphs 17, 17A and 17B it pleaded the retainer, its terms and breaches. It might then, like the parties above it, have gone on to plead loss and damage and to seek damages against Barrett Fuller. But it did not.
[6]Third further amended statement of claim of fourth defendant by counterclaim (Wynton Stone Australia Pty Ltd) against second, third, fifth and sixth defendants by counterclaim and the sixth third party (TTW) filed by leave granted on 11 November 2005.
The plea in this regard is a little puzzling. Counsel for Wynton Stone told me at the time that the objective of the amendment to paragraph 17 and the new paragraphs 17A and 17B was to lay the foundation for an apportionment claim. I thought it puzzling, because the apportionment sought is only in respect of Wynton Stone’s liability as a defendant to the Barwon claim. It is difficult to see how Barrett Fuller’s breach of contract with Wynton Stone could bear upon Barrett Fuller’s liability to Barwon.
The pleading then alleges that Barrett Fuller owed a tortious duty of care to Barwon which duty it breached with a consequent loss to Barwon.[7] This claim, which was in the original pleading, would support a claim for apportionment in respect of Wynton Stone’s liability to Barwon.
[7]Paras 20, 21.
Then follows puzzling allegations that Barrett Fuller owes Wynton Stone a duty of care and a breach of that duty.[8] No loss or damage is alleged and this plea appears to lead nowhere. It would not support an apportionment claim because no duty was then alleged against any party seeking damages from Wynton Stone. The part of the Wynton Stone statement of claim which stood after the amendment of November 2005 and, indeed, still stands, which deals with Barrett Fuller then concludes with the following:
24.If, as is alleged in this proceeding, Wynton Stone caused loss to Barwon, Aquatec, Minson and/or Montgomery Watson by reason of the manner of the design or construction of the works and has thereby incurred a liability to pay damages to Barwon that liability resulted from the breaches referred to in paragraphs 17A and 17B and 23 hereof in the manner particularised in paragraph 21 hereof.
This, too, is puzzling because the only apportionment sought in this paragraph and in the pleading generally, was an apportionment in respect of the Barwon claim against Wynton Stone. This position changed somewhat in December 2005 when further amendment was made by Wynton Stone. The Wynton Stone allegation of entitlement to apportionment and its prayer for relief were amended to seek apportionment against Minson Nacap, Montgomery Watson, Barrett Fuller, Fisher Stewart and TTW in respect of claims for loss suffered by Barwon, Aquatec, Minson Nacap and Montgomery Watson.
[8]Paras 22, 23.
What is now sought is leave to amend the statement of claim further so as to plead out the breach of contract claim against Barrett Fuller by alleging that Wynton Stone has suffered loss and damage by reason of that breach and to seek damages. When the November amendment came forward, I raised with counsel for Wynton Stone that the breach of contract plea which was then being introduced appeared to lead nowhere. Barrett Fuller’s objection to the proposed amendment was withdrawn when counsel for Wynton Stone stated that the proposed breach of contract allegations were directed, not to a damages claim against Barrett Fuller, but only to support Wynton Stone’s claim for apportionment from Barrett Fuller regarding its liability to Barwon. The matter was taken up again on 9 December 2005 when the next amendment was raised. Again, counsel for Wynton Stone made it clear that no damages claim was made against Barrett Fuller. The point was made again in final address, and the trial concluded and judgment was given on that basis.
The Court is, of course, not privy to the tactics and reasons for decisions made by a party such as Wynton Stone to take the positions that it did take and its decisions not to take other positions. No explanation was offered for the present change of heart. It is clear that the present position in which Wynton Stone finds itself is due to no oversight: it is the result of a deliberate decision made some time ago and remade when the November and the December amendments were formulated.
Counsel for Wynton Stone argued that the factual issues which the amended pleading might raise had been argued and determined at the trial. These issues were essentially as to the breaches of contract by Barrett Fuller. In paragraph [365] of my March judgment, I record that I had “determined to award judgment for damages in favour of Wynton Stone against Barrett Fuller”. I must acknowledge that this statement is incorrect as appears elsewhere in the judgment. The issues which were determined at the trial were only that Barrett Fuller was in breach of the terms of its retainer.[9] The consequence of such a finding upon the application before me might be that Wynton Stone, as a result of the Barrett Fuller breaches of contract, incurred its liability to Montgomery Watson for which I have given judgment in favour of Montgomery Watson in the sum of $4,138,696 plus interest.
[9][2006] VSC 117, at [235].
Counsel for Barrett Fuller challenged this. He argued that there would arise serious issues as to causation. Furthermore, he put, his client would not have accepted the concession made by Minson Nacap that the design deficiencies of the Lorne tank led to the failure and the need to rectify. This concession involved abandoning an argument which Montgomery Watson, Wynton Stone and others might have presented that the embankments would have failed in any event. His client, too, might not have accepted the further concession made on behalf of Montgomery Watson that it was in breach of the design services agreement.
It was put, also, on behalf of Barrett Fuller that, if the amendment were allowed, Barrett Fuller would contend that its liability should be diminished by reason of the contributory negligence of Wynton Stone pursuant to Wrongs Act 1958 s. 26. Counsel for Wynton Stone accepted that this might be a consequence and that, if the amendment were allowed, I should permit Barrett Fuller to plead to the new claim and that this might mean that the trial would be re-opened with the possibility of further evidence being led.
A number of other matters were put against the proposed amendments. I will not burden this judgment with an extensive consideration of them. It is sufficient that I conclude, as I do, that the decision not to plead the breach of contract claim against Barrett Fuller was a deliberate one, that the amendment would be likely to require a re-opening of the trial, possibly involving parties other than Wynton Stone and Barrett Fuller, and that Barrett Fuller would suffer prejudice as a consequence. One aspect of this is that the contracts the subject of this litigation were entered into in 1997 and the trial was conducted in the last months of 2005. The re-opened trial would, therefore, not occur until 2008, some three years after the other evidence had been given and 11 years after the events which give rise to the litigation had occurred. I bear in mind, too, that this litigation has involved a lengthy trial at which the parties have presented their cases on very many issues. The principle that there should be an end to litigation has a role to play in these circumstances.
I will therefore refuse the application for leave to amend. In these circumstances it was accepted that the appropriate order, in the light of my findings of March 2006, should be that there should be judgment for Barrett Fuller against Wynton Stone with costs.
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