Australian Development Corporation v Allco Steel

[1999] NSWSC 757

CITATION:	Australian Development Corporation v Allco Steel [1999] NSWSC 757
CURRENT JURISDICTION:	Equity Division Construction List
FILE NUMBER(S):	55032/91
HEARING DATE(S):	11 June 1999
JUDGMENT DATE:	11 June 1999
PARTIES :	Australian Development Corporation Pty Limited (Plaintiff) Allco Steel Corporation Pty Limited (First Defendant) White Constructions (ACT) Pty Limited (In Liquidation) (Second Defendant)
JUDGMENT OF:	Einstein J

COUNSEL :	Mr P Liney (Plaintiff) Mr G McVay (First Defendant)
SOLICITORS:	Colin Biggers & Paisley (Plaintiff) Sparke Helmore (First Defendant)
CATCHWORDS:	Practice and procedure - Proceedings fixed for hearing - Claimed entitlement of defendant to put into issue matters said to have been determined previously between the parties - Appropriate to leave those questions for determination by the trial judge on motion for leave to amend pleadings
DECISION:	(1) I grant leave to the first defendant to file and serve a notice of motion seeking leave to amend the first defendant's defence and/or to amend or propound a cross claim, those amendments seeking to deal with the matters presently sought to be raised under cover of the notice of motion filed on 11 June 1999. That notice of motion maybe made returnable before the trial Judge at 10 am on 12 July 1999.; (2) All affidavits in support of that notice of motion including the proposed amended pleadings to be propounded, are to be served by 18 June 1999. Any affidavits in answer to that notice of motion are to be filed and served by no later than 7 July 1999.; (3) I direct that the defendants file and serve detailed submissions in support of the defendants two proposed notices of motion and in answer to the notice of motion sought to be pressed by the plaintiff, being the notice of motion filed on 31 May 1999. Those submissions are to be filed and served by 5 July 1999. Those submissions are to detail the whole of the circumstances sought to be relied upon by the first defendant, all the evidence on which the first defendant seeks to rely and the same submissions are to specify in detail the authorities and principles sought to be relied upon by the first defendant when the motions are to be heard.; (4) Costs of the two motions before the court today will be reserved.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION - COMMERCIAL LIST

EINSTEIN J

Friday 11 June 1999 - ex tempore
Revised 28 July 1999

55032/91 - AUSTRALIAN DEVELOPMENT CORPORATION v ALLCO STEEL CORPORATION PTY LIMITED & ORS

JUDGMENT 1    HIS HONOUR: In proceedings No 55032/91 there are before the court two notices of motion. The first is that filed by the plaintiff on 31 May 1999 seeking an order that the first defendant is not entitled to put in issue at the hearing, presently set down to commence on 12 July 1999, the tonnage of off site steel converted which was the subject of declarations and orders by Rolfe J on 29 May 1992 and the Court of Appeal in November 1996. 2    The same motion seeks an order that the first defendant is not entitled to adduce evidence to the effect of the Nulla Partnership T. Corbett Report dated 4 August 1999. 3    At the same time the defendant moves on a motion filed on 11 June 1999 for orders that pursuant to Pt 40 r 9 (iv) the order dated 23 March 1993 be varied by deleting from paragraph 1a the words and figures "403.27 tons of". The motion also seeks a deletion by Court Order from paragraph 1b of the words and figures "398.57 tons of". 4    The proceeding are proceedings in which the plaintiff claims damages against the first defendant (Allco) for conversion by Allco of steel to which the plaintiff apparently had title but which was in the possession of Allco (referred to throughout the proceedings as "off site steel") and consisting of two lots of steel referred to throughout the proceedings as the October steel and November steel, these being references to the months in which Allco claimed payment for the respective losses of steel. Allco supplied and directed the steelworks for the plaintiff's project as subcontractor for the second defendant, which was the builder. 5    The question of liability was determined separately from that of damages by Rolfe J in a trial which commenced on 7 October 1992. In delivering reasons for judgment Rolfe J formally made an order pursuant to Pt 31 r 2 that the question of liability be determined as a separate issue. 6    Rolfe J made certain declarations and orders together with orders relating to costs on 30 March 1993. His Honour held that Allco was liable for conversion of the October steel but not the November steel. 7    Evidence has been adduced before me that the short minutes were agreed upon by the parties pursuant to his Honour's indications in reasons for judgment on 9 March 1993 that short minutes be brought in to give effect to his Honour's decision on the issue of liability. 8    The plaintiff appealed against declarations 1b and 1c of his Honour's declarations and the Court of Appeal by judgment of 14 November 1996 allowed the appeal and decided that Allco was also liable for conversion of the November steel. 9    Allco's appeal did not challenge the quantities of steel referred to in orders of Rolfe J. Allco's appeal was dismissed. 10    There has now been set down for final hearing commencing 12 July 1999 the assessment of damages to which the plaintiff is entitled for conversion of the October and November steel. The hearing date of 12 July was fixed on 5 February 1999. 11    On 2 March 1999 the first defendant's solicitors served a copy of a report of Nulla Partnership which seeks to demonstrate that the quantity of steel converted was not the 901.8 referred to in the orders of the court today, (that is, 403.27 tons of October steel and 298.57 tons of November steel), but only 696.52 tons. 12    There is evidence before the court that this is the first time in the proceedings that there has been any dispute at all about the quantity of steel contained in the October and November steel which was converted. 13    Mr Kermond, solicitor for the plaintiff, in his affidavit of 31 May 1999 has referred to certain material which evidences the quantities of the October and November steel and which is said not to have been the subject of challenge in any way at the trial before Rolfe J. Mr Kermond has deposed that it was not considered necessary for the plaintiff to call Mr Hardy to give evidence of the quantities of steel as they were, Mr Kermond understood, not in dispute. Mr Kermond's affidavit deposes that had the point now raised in relation to the quantities of October and November steel which was converted been taken at the liability hearing the trial would probably have been conducted differently, including, it is suggested, the calling of further evidence relating to quantities of steel remaining in the defendant's possession, a further examination of documents and cross examination of the defendant's witnesses. 14    Mr Kermond deposes and I accept that extensive evidence has been served for the purpose of the final hearing on 12 July. He deposes that he understood the only point was the proper value of the 491.8 tons of steel converted. Mr Kermond makes certain suggestions in relation to the statements of evidence other than Mr Corbett's report as to the manner in which they be dealt with. 15    Mr Kermond deposes that he is concerned that if the plaintiff be required to meet this new point for the purpose of the assessment of the damages hearing commencing on 12 July the plaintiff will be prejudiced in doing so. He deposes as to the necessity, if the plaintiff is to rebut the defendant's point, that it will be necessary first to prove the amount of the off site steel included in the October and November claims by Allco and consequently to prove what steel was delivered by Allco to the plaintiff's site at various times so as to establish that none of the October or November steel was in fact delivered to the site. 16    Mr Kermond deposes that he is concerned that the plaintiff may not now be able to prove these matters, having regard to the remoteness in time of the relevant events, the difficulty of locating such records as may still exist and the inability at present, despite inquiries to locate Mr Hardy and the difficulty in dealing with the evidence of the project manager of the second defendant who was closely appointed with the progress of steel deliveries to an erection on site. 17    Mr Kermond deposes that if the plaintiff is required to meet these matters he believes it will involve considerable time, costs and difficulties in doing so and that this will adversely affect the efficient and proper preparation of the case on assessment of damages. 18    Mr Wylie, solicitor for the defendant, has in turn deposed that he considered that at the time of the hearing before Rolfe J any preparation for the hearing in relation to the number of tons of steel actually converted was a matter which went to quantum. He has deposed that because issues of liability and quantum were split, he did not inquire into whether the number of tons of steel claimed in the October and November claims remained at the date of conversion, which was January 1999. To his mind the quantity of tons of steel and the price per ton of that steel were matters relating to the issue of quantum of damages. 19    In particular Mr Wylie deposes that he did not inquire whether any part of the October and November steel was fabricated and sent to the plaintiff's site before the conversion. Evidence that went to the quantity of the tons of steel converted and the price per ton he left until after the hearing on liability. As to the short minutes of order dated 23 March 1993 he recalls seeing them at or about the time they were signed and the reference to the number of tons of steel. He considered the references to the number of tons of steel to be descriptive of the steel converted and not a determination that the number represented the actual number of tons converted, for the purpose of assessing quantum. 20    Mr Liney has contended that it is now appropriate for the court to deal with the two notices of motion so that the parties should not be in any doubt as to the precise issues covered under the rules of quantum in respect of the hearing date now fixed. Mr Liney submits that the plaintiff needs now to clarify whether this further issue is or is not to be in issue. He submits that there will be prejudice to the plaintiff if in addition to the preparation now in train for the hearing it is to be encumbered with preparation for the hearing of the suggested further issues. 21    Having given the matter close consideration, to my mind this is a situation in which the appropriate order should be that both notices of motion are simply stood over for hearing before the trial Judge at 10am on the morning of the hearing. 22    Further, it seems to me that the matters which are now sought to be raised by the defendant are quite likely matters which are appropriate to be raised in pleadings. In those circumstances the defendant should be given a proper opportunity to consider and if it determines to be appropriate, to seek to propound amended pleadings by way of an amended defence and/or an amended cross claim to raise these issues. Any application by the defendant for leave to amend the pleading will require to be brought by notice of motion also returnable before the trial Judge at 10am on the morning of the hearing. 23    To my mind the convenient course is to give a direction that such a notice of motion be filed by a particular date and time and supported by affidavits. Naturally the notice of motion will require to include within the affidavits the proposed amended pleadings to be propounded. To my mind the appropriate course is then to direct the plaintiff to file and serve the affidavits in answer to that motion shortly before the hearing. 24    A number of fairly complex questions are then to be before the trial Judge by these three notices of motion. To my mind it is the trial Judge who, following the plaintiff's opening and the defendant's opening will be best in the position to understand the whole of the background of the matter and to understand and then to deal with these motions. The trial Judge will have available to himself or herself any number of ways of dealing with the subject matter of the motions. One is simply to allow one or other of the motions. No doubt in determining whether or not and if so for what reasons, to allow the first defendant to amend its pleadings and/or to move for the court orders to be altered, the court will need to take into account what the relevant principles are and what the prejudice to the plaintiff will be. 25    Another possibility is that the trial Judge will simply allow the hearing to proceed and will permit evidence to be adduced in relation to the new issues on the basis that that evidence is to be adduced subject to relevance and on the basis that the trial Judge will determine the three motions as part and parcel of the final judgment. 26    Yet a further possibility is that the trial Judge will be persuaded when the motions are argued at the hearing that the convenient course is to permit the hearing to proceed in all circumstances in the way that it would have proceeded but for the defendant's new pursuit of the orders and to as it were, fix for hearing in some further and later bracket of time, an occasion when these notices of motion can be pursued. 27    That may not exhaust all the ways in which the trial Judge may adjudicate the determination of these motions, applying naturally to the touchstone of that adjudication, the principle that the interests of justice should be served. 28    So that the only other matter which I make quite plain is that it is my view that the defendants who are to move for the amended pleadings and who are to pursue the notice of motion filed today should be obliged to file and serve detailed written submissions in support of their applications made by motion. Those submissions should, it seems to me detail all the factual background, detail the evidence and detail the relevant principles of law by specific reference to the authorities. 29    I propose to direct that submissions of that order be filed and served by the defendants before the hearing so that the plaintiff is well aware precisely how the defendants propose to put the matter and will not be prejudiced at the commencement of the hearing by for the first time hearing some new principles of law or evidence which it was unaware were to be relied upon. 30    The court gives the following directions:

(1) I grant leave to the first defendant to file and serve a notice of motion seeking leave to amend the first defendant's defence and/or to amend or propound a cross claim, those amendments seeking to deal with the matters presently sought to be raised under cover of the notice of motion filed on 11 June 1999. That notice of motion maybe made returnable before the trial Judge at 10 am on 12 July 1999.
(2) All affidavits in support of that notice of motion including the proposed amended pleadings to be propounded, are to be served by 18 June 1999. Any affidavits in answer to that notice of motion are to be filed and served by no later than 7 July 1999.
(3) I direct that the defendants file and serve detailed submissions in support of the defendants two proposed notices of motion and in answer to the notice of motion sought to be pressed by the plaintiff, being the notice of motion filed on 31 May 1999. Those submissions are to be filed and served by 5 July 1999. Those submissions are to detail the whole of the circumstances sought to be relied upon by the first defendant, all the evidence on which the first defendant seeks to rely and the same submissions are to specify in detail the authorities and principles sought to be relied upon by the first defendant when the motions are to be heard.
(4) Costs of the two motions before the court today will be reserved.

31    I add as a postscript to the extempore judgment delivered that to my mind the plaintiff will be in a position at the commencement of the hearing to put before the trial Judge detailed evidence as to any prejudice which the plaintiff asserts that it would suffer if the new issues are to be heard as part and parcel of the trial. The court anticipates that to the extent applicable and possibly consistent with the plaintiff's otherwise preparation of the hearing now fixed and the issues previously understood to be before the trial Judge, the plaintiff will carry out its best endeavours to meet in an evidentiary way the matters now sought to be relied upon by the first defendant. 32    Whether the plaintiff is or is not able within the time and consistent with its otherwise necessary preparation of the case it had understood it was to run, is of course a matter entirely for the plaintiff. All of those considerations should be on affidavit and before the trial Judge so that the trial Judge can see when the hearing begins precisely to what extent the plaintiff, having carried out its best endeavours to treat on an evidentiary basis these matters before the trial, has been able to or has not been able to achieve a position in which it is able to handle an expansion of the issues. 33    The trial Judge will no doubt deal with any costs of and occasioned by the motion. It would seem to me to be most unlikely that the trial Judge would make any order otherwise than that all costs of the plaintiff of and occasioned by any necessity for the plaintiff between now and the hearing to investigate these new issues and to deal with the new issues, may well have to be paid by the first defendant as the price for seeking to raise at the eleventh hour issues of the type now sought to be raised. 34    Having said that, nothing which I have said is intended of course to trammel in any way the trial Judge's undoubted discretion to deal with such costs as the trial Judge elects to be appropriate.

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