Arnold Thomas and Becker Pty Ltd v Finch

[2014] VCC 819

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST

GENERAL CASES DIVISION

Case No. CI-13-01273

ARNOLD THOMAS & BECKER PTY LTD	Plaintiff
v.
JO-ANNE FINCH	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	4 June 2014
DATE OF JUDGMENT:	4 June 2014 (revised 5 June 2014)
CASE MAY BE CITED AS:	Arnold Thomas & Becker Pty Ltd v. Finch
MEDIUM NEUTRAL CITATION:	[2014] VCC 819

REASONS FOR JUDGMENT

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Catchwords:              Practice and procedure – Application to file and serve a further amended counterclaim.     

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. Harrison	Arnold Thomas & Becker
For the Defendant	Mr J. Selimi	MLC Lawyers

HIS HONOUR:

1On 29 November 2013, His Honour Judge Lacava struck out the “particulars of estimated loss and damage to paragraph 8 of the defendant’s Amended Statement of Counterclaim dated 1 June 2011”. Judge Lacava gave the defendant leave to file and serve any proposed amended counterclaim before 13 December 2013. He adjourned the hearing of the plaintiff’s application by amended summons dated 7 November 2013 for judgment on the counterclaim, or alternatively that it be struck out, and dismissed two summonses issued by the defendant.

2The defendant sought leave to appeal. The Court of Appeal on 18 March 2014, dismissed the application for leave. Following that decision, the defendant was granted further time to file a proposed amended counterclaim by order of Her Honour Judge Lewitan dated 6 May 2014.

3The issues for decision today are:

a.whether the defendant should have leave to deliver an amended counterclaim in accordance with the draft dated 3 June 2014;

b.if leave is not granted, whether the plaintiff should have judgment on the counterclaim.

4The Court of Appeal considered that there was “no error” in Judge Lacava’s decision to strike out the particulars to paragraph 8 of the counterclaim, as that decision was “plainly correct”. The Court of Appeal saw no “injustice in leaving the orders unreversed” as “the applicant was given leave to file and serve a proposed further amended counterclaim”.

5The defendant’s proposed pleading is, as her counsel Mr Selimi conceded, essentially a fresh pleading. It was in response to a claim by the plaintiff (a firm of solicitors) for its costs in representing the defendant in earlier proceedings at VCAT. The present counterclaim dated 1 June 2011, makes a claim in negligence arising from the solicitor’s conduct of the VCAT proceeding. The pleading of the damages the defendant sought was struck out by Judge Lacava (and confirmed by the Court of Appeal), essentially on the basis that the counterclaim called “into correctness the dismissal of the VCAT proceeding or the costs order made against her thereafter”, and therefore was caught by the principles of advocates immunity.

6The proposed pleading dated 3 June 2014, makes claims based on:

a.breach of contract;

b.negligence;

c.misleading and deceptive conduct, in breach of the Competition and Consumer Act 2010 (Cth) (“the Act”) and/or its predecessor;

d.unconscionable conduct, in breach of both the common law and the Act;

e.breach of fiduciary duty.

7During the course of argument Mr Selimi submitted that there may be a further claim in restitution.

8The damages sought by the defendant in respect of each of these claims are similar to the claims made in the present counterclaim, particularly the claims for:

a.“replacement legal representation costs” totalling $160,132.55 rather than “future legal fees” in the earlier claim, which it was said were “proportioned to $108,000”; and

b.“Lost chance of procuring a favourable settlement of the VCAT proceeding” of $115,000 rather than the earlier claim for “Loss of a valuable opportunity to settle the VCAT proceedings on terms favourable to the defendant and/or the loss of opportunity to obtain a successful outcome in the VCAT proceedings”, totalling $153,480.

9The Court of Appeal recognised the possibility that a case may be advanced by the plaintiff which arguably might “not be caught by the immunity” or that, properly pleaded, damages for “distress or inconvenience” might be claimed rather than the earlier claims for “loss of happiness in life” and for “public humiliation”.

10In my view, the present pleading should not be allowed to go forward in its present form. The shortcomings include:

a.the breaches and loss and damage pleaded are essentially “rolled up” allegations without any attempt to separate the causes of action relied upon;

b.the pleading of material facts and the particularisation of the breaches, and to a degree, the implied terms and the loss and damage claimed, are inadequate.

11These matters were generally canvassed in discussion with counsel. Further, at present there is no pleading for the return of monies paid for counsel’s fees, as a claim for restitution, and the “replacement legal representation costs” are not claimed on the basis which the defendant had previously articulated in an affidavit sworn by her, that they were essentially “wasted” costs as the VCAT proceedings were adjourned because of the late briefing of counsel by the solicitors and because counsel “was not fully across my matters and was therefore not in a position to proceed”.

12The proceeding is set down for trial on 15 October 2014. The proceeding was commenced by complaint in the Magistrates’ Court on 23 February 2011. The present amended counterclaim is over three years old. The counterclaim should not be allowed to proceed in its present form, as the particulars of loss and damage were struck out and the proposed further amended counterclaim pleads the defendant’s claims on an entirely different basis.

13I propose to make the following orders:

1.The defendant’s application to file and serve a further amended counterclaim in the form of the proposed counterclaim dated 3 June 2014, is refused.

2.The defendant’s counterclaim is stayed.

3.The trial date of the plaintiff’s claim on 15 October 2014 is confirmed.

4.The plaintiff’s amended summons dated 7 November 2013 is adjourned to a date to be fixed by the Court upon written application by the plaintiff’s solicitors to the Directions Group and copied to the defendant, no later than 22 July 2014.

5.Any further application by the defendant to file and serve a further amended counterclaim must:

a.be supported by affidavit material. If previously filed affidavits are to be relied upon, the specific passages must be referred to and reaffirmed in a further affidavit, although without the need for setting out the passages verbatim;

b.be served on the plaintiff by 27 June 2014.

6.The plaintiff must by 16 July 2014, notify the defendant whether it consents to the proposed pleading or, if it opposes any part of the proposed pleading, the specific basis for the opposition.

7.If the parties consent to the form of the proposed pleading, orders may be sought from the Commercial List Duty Judge and will be made “on the papers”.

8.If the pleading is not consented to, the defendant must make further application to the Court by 21 July 2014 for leave to file the further amended counterclaim, such application to be returnable on 28 July 2014.

9.Reserve costs.

10.Reserve liberty to apply.

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Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on  4 June 2014 and revised on 5 June 2014.

Dated: 5 June 2014

Catherine Kusiak    

Associate to His Honour Judge Anderson