Bexton Australia Pty Ltd v Kuredale Pty Ltd - [2001] WADC 14

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: BEXTON AUSTRALIA PTY LTD -v- KUREDALE PTY LTD [2001] WADC 14

CORAM: YEATS DCJ

HEARD: 31 OCTOBER & 3 NOVEMBER 2000

DELIVERED : 2 FEBRUARY 2001

FILE NO/S: CIV 1539 of 1999
CIV 1977 of 1999
(Consolidated by Order dated 25 August 1999)

BETWEEN: BEXTON AUSTRALIA PTY LTD
Plaintiff
AND
KUREDALE PTY LTD
Defendant

Catchwords:

Interlocutory proceedings - Application for leave to amend and file a further statement of claim - Whether a term for further work can be implied into the contract - Whether the plaintiff properly pleaded its case in restitution - Whether the plaintiff can claim damages for breach of contract - Application allowed

Legislation:

Nil

Result:

Plaintiff's application to amend and file a further statement of claim allowed

Representation:

Counsel:

Plaintiff: Mr C B Edmunds
Defendant: Mr G A Rabe

Solicitors:

Plaintiff: Jackson MacDonald
Defendant: Ahern & Associates

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

Bexton Australia Pty Ltd v Kuredale Pty Ltd [2000] WADC 263
Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
Dalgety Australia Ltd v Rubin unreported; FCt SCt of WA; Library No 5485; 24 August 1984
General Steel Industries Inc v The Commissioner of Railways New South Wales (1964) 112 CLR 125
Kimberley Downs Pty Ltd & Ors v State of Western Australia & Anor, unreported; SCt of WA; Library No 6414; 25 August 1986
Liebe v Molloy (1906) 4 CLR 347
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377
Pavey & Matthews Pty Ltd v Paul (1986-1987) 162 CLR 221
Reed International Books Australia Ltd (T/as Butterworths) v King & Prior Pty Ltd & Ors (1993) 44 FCR 587
Riches v DPP [1973] 2 All ER 935
The State of Queensland v J L Holdings Pty Ltd (1996-1997) 189 CLR 146
Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363

Case(s) also cited:

Nil

YEATS DCJ: This is the plaintiff's application for leave to file an amended statement of claim. The plaintiff's chamber summons to amend was heard on 31 October and 3 November 2000 along with the defendant's chamber summons to dismiss the plaintiff's action pursuant to O 20 r 1 RSC. On 3 November 2000 at the end of the hearing I granted the plaintiff leave to amend its statement of claim and dismissed the defendant's chamber summons. I gave oral reasons for the latter decision but reserved my reasons for granting the plaintiff leave to amend. I now publish those reasons.
This matter has had a long and troubled history. On 11 October 2000 I allowed an appeal by the defendant from the decision of the Deputy Registrar on 22 July 2000 granting leave to file an amended statement of claim. On 24 October 2000 I published my reasons for refusing the defendant's application for an order for indemnity costs but granted the defendant an order that the plaintiff pay the defendant's costs forthwith. In my reasons regarding the costs orders (Bexton Australia Pty Ltd v Kuredale Pty Ltd [2000] WADC 263) I set out the history of this action at pars 2 through 7. For the purpose of these proceedings the affidavit of Anthony David Bereyne sworn 18 October 2000 was filed on behalf of the plaintiff and the affidavit of Marcus John Ahern sworn on 27 October 2000 was filed on behalf of the defendant. Each records the history of the matter from that party's point of view and, for that reason, events are described in dissimilar words. But there are no basic disagreements as to the facts and I summarise that history:
(1)The plaintiff instituted action 1539 of 1999 on 19 April 1999 and action 1977 of 1999 on 20 May 1999. On 14 July 1999 the plaintiff filed statements of claim and the two actions were consolidated on 25 August 1999. A consolidated statement of claim was not filed until 3 December 1999.
(2)On 23 December 1999 the defendant moved to strike out the consolidated statement of claim. At the hearing of that application on 23 February 2000 the plaintiff sought leave to amend the statement of claim; the learned Deputy Registrar struck out the statement of claim but gave the plaintiff leave to file a substituted statement of claim. That statement of claim was filed on 27 March 2000.
(3)The defendant again moved to strike out that pleading; the matter was heard on 22 June 2000 when the plaintiff moved again to substitute a further pleading. The learned Deputy Registrar did grant leave to the plaintiff to amend its statement of claim; the defendant filed a notice of appeal on 3 July 2000. That appeal came on for hearing before me on 11 October 2000 when the plaintiff moved again to substitute a further amended statement of claim. I allowed the appeal and then on 31 October and 3 November heard the plaintiff's application for leave to amend and file a further statement of claim. Leave was granted and these are my reasons for doing so.
It is apparent from this brief history that the plaintiff has now filed more than seven statements of claim since the commencement of the actions. I accepted, however, for the purposes of the defendant's application for an indemnity costs order, that the plaintiff and its legal advisers had acted in good faith. Several of the most recent pleadings have been the subject of only very minor amendments brought about by their acceptance of some of the defendant's criticisms.
I accept that in this case the plaintiff was faced with a very difficult case to plead. The plaintiff is a company carrying on the business of preparing and supplying detailed engineering drawings. The defendant is a company carrying on the business of steel fabrication and erection. The statement of claim covers four different agreements between the plaintiff and defendant whereby the plaintiff agreed to provide detailed drawings for the defendant's steel fabrication works. With respect to the Champion Drive Shopping Centre, the plaintiff pleads an agreement in writing to provide detailed shop drawings to the defendant. It claims it did so and the defendant later requested additional work but did not pay for all of the additional work.
With respect to the UWA Social Sciences building the plaintiff pleads an agreement partly written and partly oral to provide shop detail drawings to the defendant. The plaintiff pleads that the drawings provided by it to the defendant were not complete and the defendant requested it to prepare further and amended shop drawings which it did but that the defendant did not pay for the additional work.
With respect to the Mirrabooka Shopping Centre the plaintiff pleads an agreement partly written and partly oral to prepare and provide shop detail drawings to the defendant. Again the plaintiff pleads that the tender drawings were not complete and the defendant requested the plaintiff to provide further and amended shop drawings, which the plaintiff provided but the plaintiff was not paid for the additional work.
With respect to the Amcap Distribution Centre the plaintiff pleads an agreement partly written and partly by conduct to prepare and provide shop detail drawings to the defendant. Again the plaintiff alleges the defendant's drawings were not complete and the defendant requested the plaintiff to prepare and provide further and amended shop drawings. The plaintiff provided the additional drawings but was not paid for the additional work.
The statement of claim is 63 pages in length of which 46 pages are annexures detailing the additional work requested and carried out by the plaintiff. Under each of the agreements the plaintiff pleads implied terms as in par 5(1) and par 5(2).
"(1)In the event the defendant requested the plaintiff to provide further or amended shop drawings for the steel fabrication works for the project, the plaintiff would in accordance with such request undertake such additional work;
(2)The defendant would pay the plaintiff for the time reasonably taken for such additional work and an hourly rate based upon the contract price or at a reasonable hourly rate based upon rates within the industry.
PARTICULARS
(a)The terms were implied in the context of the factual matrix in order to give business efficacy to the Champion Drive agreement; alternatively,
(b)The terms were additional terms to the Champion Drive agreement implied by conduct from the performance of it, as pleaded herein."
Similar pleadings are found in pars 12(3) and 12(4), in pars 20(4) and 20(5) and pars 29(3) and 29(4).
Further implied terms were pleaded in the UWA agreement pars 12(1) and 12(2), the Mirrabooka agreement pars 20(2) and 20(3) and the Amcap agreement pars 29(1) and 29(2). The terms are similar to each other. Paragraphs 12(1) and 12(2) are in these terms:
"(1)The drawings provided by the defendant would be sufficiently clear, complete and accurate ('complete') to enable the plaintiff to prepare and provide the shop drawings;
(2)In the event the drawings provided were not complete such that the plaintiff was required to obtain further information or clarification for the purposes of it preparing the shop drawings, it would seek such from the defendant either directly or through the consultants;"
A further implied term was pleaded in the Mirrabooka agreement par 20(1):
"(1)The defendant would provide to the plaintiff detailed engineering and architectural drawings to be prepared by the consultants;"
The defendant contends that as a matter of law these terms cannot be implied and therefore that the statement of claim insofar as it seeks an amount of money due under the various agreements is bad and that leave should not be granted to amend it.
In the alternative to its actions on the contracts relying on the implied terms, the plaintiff pleads its case in restitution in respect of the UWA Social Sciences Building, Mirrabooka and Amcap agreements. Each pleading is similar to that in par 17:
"In the alternative to the plea in paragraph 12 that the plaintiff agreed to undertake and that the defendant agreed to pay the plaintiff for the additional work and at such rate:
(1)at the time the defendant, directly or by the consultants, requested the plaintiff to perform the additional work it knew, or ought to have known that such work was outside the contract and the plaintiff would expect to be paid for such in addition to the contract price;
(2)the defendant has obtained the benefit of the additional work;
(3)the plaintiff is entitled in law to a reasonable sum in respect of such additional work;
(4)a reasonable sum in respect of such additional work is $6,600."
Essentially the same pleading is found in pars 25 and 34 of the statement of claim.
The defendant contends that the plaintiff has failed to plead the essential facts and that each of these pleadings is bad.
Finally, in respect to the Mirrabooka agreement, the plaintiff pleads damages for breach of contract in par 26:
"(1)Further, in breach of the term of the Mirrabooka agreement pleaded in paragraph 20(2) the tender drawings and the further detailed architectural and engineering drawings were not complete but were in fact unclear, incomplete and inaccurate ('the defects') in various respects.
(2)By reason of the breach of such term the plaintiff suffered loss and damage in the sum of $73,970 in that in order to prepare and provide the shop drawings it was required to and did expend time to identify, resolve and seek clarification of the defects. Particulars of the defects and the time and cost taken to identify, resolve and seek clarification of them are annexed and marked 'B'."
The defendant made extensive objections to par 26 in its written submissions but these were not addressed by counsel in oral submissions.

The Law

In The State of Queensland v J L Holdings Pty Ltd (1996-1997) 189 CLR 146 the High Court considered the principles a court should apply when considering an application seeking leave to amend. In their joint judgment Dawson, Gaudron and McHugh JJ said at 154:
"Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim."
Justice Kirby spoke to similar effect at 172:
"Whilst taking all of the considerations relevant to the circumstances of the case into account, the judge must always be careful to retain that flexibility which is the hallmark of justice. New considerations for the exercise of judicial discretion in such cases have been identified in recent years. But the abiding judicial duty remains the same. A judge who ignores the modern imperatives of the efficient conduct of litigation may unconsciously work an injustice on one of the parties, or litigants generally, and on the public. But a judge who applies case management rules too rigidly may ignore the fallible world in which legal disputes arise and in which they must be resolved."
The application before me is for leave to amend but a refusal to grant leave would have the effect of striking out the statement of claim. The principles to be applied on such an application were summarised in Kimberley Downs Pty Ltd & Ors v State of Western Australia & Anor, unreported; SCt of WA; Library No 6414; 25 August 1986. The rule is intended to apply only to cases which are really not arguable. In considering the matter all of the facts alleged in the statement of claim must be accepted as true. Great care must be exercised to ensure that the plaintiff is not improperly deprived of its opportunity for the trial of its case (General Steel Industries Inc v The Commissioner of Railways New South Wales (1964) 112 CLR 125). An action can be struck out only where the plaintiff's case is so clearly untenable that it cannot succeed. As a general rule a plaintiff is entitled as of right to have his or her case heard, to have the facts found and then to argue the question of law as it arises before the trial Judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleadings should be struck out (Dalgety Australia Ltd v Rubin unreported; FCt SCt of WA; Library No 5485; 24 August 1984). A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops it will be found that a cause of action will lie. No evidence is admissible on an application on this ground, but the court may refer to documents mentioned in the pleading.
There were considerable submissions in great detail provided by the defendant in its application to strike out the plaintiff's statement of claim. Many of them were not addressed by the counsel on behalf of the defendant in his oral submissions to me. Some such as a reference to a "Liebe v Molloy" claim (Liebe v Molloy (1906) 4 CLR 347) have been withdrawn. The main contentions of the defendant relate to whether the terms relied on by the plaintiff can as a matter of law be implied into these contracts and on the question of whether the plaintiff has pleaded sufficient facts in its claims for restitution. It is those two issues that my reasons address. I also consider the plaintiff's claim for damages for breach of the Mirrabooka agreement in par 26.

Can the terms be implied in these contracts?

The defendant's primary contention is that the terms the plaintiff proposes to imply into each of the agreements cannot as a matter of law be implied in those contracts because the terms are not necessary to the pleaded contract and because the implied terms contradict the express terms of each agreement. The basis upon which terms are implied into a contract was discussed in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347 per Mason J:
"The conditions necessary to ground the implication of a term were summarised by the majority in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26: '(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.' "
The plaintiff submits that the implied terms pleaded in pars 5(1) and 5(2), and in pars 12(1)(2)(3) and (4) and in pars 20(1)(2)(3)(4) and (5) and in pars 29(1)(2)(3) and (4) are implied on the facts of the matter as pleaded. The plaintiff contends that if, after the shop drawings have been prepared and provided in fulfilment of the plaintiff's contract obligation, the defendant requests the plaintiff to provide further drawings or, the defendant provides further information to the plaintiff and requests further drawings, then, in the normal course one would not expect that the plaintiff could simply refuse. The plaintiff contends that it would be under an obligation to do the further work requested and, it would also be expected that the plaintiff would be paid a reasonable sum for the time reasonably spent doing the further work. The plaintiff contends that none of the contracts made any provision for additional work to be carried out by the plaintiff but that in the context of the factual matrix including the business environment in which the parties were operating, that such a term would be reasonable and equitable and was necessary to give business efficacy to each contract. The plaintiff contends that such terms would be so obvious that they go without saying. The plaintiff contends that the terms are clearly expressed and do not contradict any express term of the contract. The plaintiff contends that the implied terms deal with requests for further work, a matter on which the contracts are silent.
Besides relying on the factual matrix to give business efficacy to the contracts the plaintiff also relies on the conduct of the parties in the performance of the contract to support the implication of the term. In the Amcap agreement the plaintiff also relies on the prior course of dealing between the parties under the Champion Drive agreement to support the implication of the term.
Payment by the defendant for some additional work done by the plaintiff is pleaded in par 9 and par 24. Under the Champion Drive agreement the plaintiff claims $9,950 for additional work of which $6,050 has been paid. Under the Mirrabooka agreement the plaintiff claims $53,575 for additional work but pleads that only $4,000 has been paid by the defendant. In support of this basis for the implication of the terms the plaintiff relies on Greig and Davis: The Law of Contract (1997) at 430.
"Evidence of how the parties have acted in relation to their contract might influence the operation of that contract in a number of ways:
…
(c)to provide a basis for implying an additional term into the existing contract;
…"
The learned authors rely upon the judgment of Mason J in Codelfa where he said: "The implication of a term is an exercise in interpretation." (345) Mason J went on to say at 345 ‑ 346:
"Of course, I am speaking of an implied term necessary to give business efficacy to a particular contract, not of the implied term which is a legal incident of a particular class of contract, …
The implication of a term is to be compared, and at the same time contrasted, with rectification of the contract. In each case the problem is caused by a deficiency in the expression of the consensual agreement. A term which should have been included has been omitted. The difference is that with rectification the term which has been omitted and should have been included was actually agreed upon; with implication the term is one which it is presumed that the parties would have agreed upon had they turned their minds to it - it is not a term that they have actually agreed upon. Thus, in the case of the implied term the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it. Rectification ensures that the contract gives effect to the parties' actual intention; the implication of a term is designed to give effect to the parties' presumed intention.
For obvious reasons the courts are slow to imply a term."

After discussing the authorities Mason J concluded at 353:
"Once it is accepted that in the construction of the contract account is taken of the presumed intention of the parties it naturally follows that account should also be taken of their presumed intention when the court is called upon to decide whether a term is to be implied. The existence of the remedy of rectification and the purpose which it serves makes it obvious that the actual intention of the parties cannot constitute the basis of an implied term.
However, it is equally obvious that in making the inquiry whether a term is to be implied the court is no more confined than it is when it construes the contract. For the implication of a term is an illustration of the process of construction, though differing from the more orthodox ascertainment of the meaning of a contractual provision."
The defendant contended that as a matter of law the terms could not be implied in any of the contracts. As background, although not properly admissible the defendant informed the court of the practise within the steel fabrication industry of what is called "ramping". "Ramping" occurs when a person in the plaintiff's position agrees to do a job at a low price in order to get the contract for its workers but then tries to find additional means to claim for higher amounts on the invoice, well above the tender price. The defendant submitted that this is a "ramping" test case. The defendant points in particular to the Mirrabooka contract where the original contract sum was $39,000 which the plaintiff is now "ramping" up to a claim for $92,575 and the Amcap agreement where the contract sum was $19,800 but the plaintiff now claims $42,550.
Against that background the defendant contends that there is a strong body of case law that makes it plainly clear that the implied terms sought to be implied in this case cannot be implied as a matter of law. Insofar as the plaintiff relies on subsequent conduct to support the implication of the term, the defendant points out that the passage from Grieg and Davis at 430 is in the part of the book headed "The Effects of Ambiguity" and submits there is nothing ambiguous about these contracts. The defendant submits that the terms are very clear as pleaded in the statement of claim.
The defendant's primary contention is that the contracts are complete as pleaded. No terms need be implied to give the contract business efficacy. Furthermore the defendant submits that the suggested terms contradict the express terms of the contract and cannot be implied. The defendant contends that this is a case for restitution and not for implying terms.
In support of these contentions the defendant relied on Pavey & Matthews Pty Ltd v Paul (1986-1987) 162 CLR 221. Justice Deane said at 256 ‑ 257:
"The quasi‑contractual obligation to pay a fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. In such a case, it is the very fact that there is no genuine agreement or that the genuine agreement is frustrated, avoided or unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution.
To identify the basis of such actions as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate. The circumstances in which the common law imposes an enforceable obligation to pay compensation for a benefit accepted under an unenforceable agreement have been explored in the reported cases and in learned writings and are unlikely to be greatly affected by the perception that the basis of such an obligation, when the common law imposes it, is preferably seen as lying in restitution rather than in the implication of a genuine agreement where in fact the unenforceable agreement left no room for one. That is not to deny the importance of the concept of unjust enrichment in the law of this country. It constitutes a unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case: (Muschinski v Dodds (1985) 160 CLR 583 at 619 ‑ 620.) In a category of case where the law recognizes an obligation to pay a reasonable remuneration or compensation for a benefit actually or constructively accepted, the general concept of restitution or unjust enrichment is, as is pointed out subsequently in this judgment, also relevant, in a more direct sense, to the identification of the proper basis upon which the quantum of remuneration or compensation should be ascertained in that particular category of case."
In Pavey & Matthews Justice Brennan said at 234:
"There is now as there was in the seventeenth century a manifest difference between implying in a contract a term to pay quantum meruit and imposing an obligation to pay quantum meruit independently of contract. The difference between an implied term (or, for that matter, an implied contract) and an imposed obligation is material, for the Statute of Frauds may affect an implied term or implied contract and bar a claim for relief based upon it but a quasi‑contractual claim for relief is not affected by the Statute.
…
An obligation in quasi‑contract, on the other hand, is imposed by law independently of contract and is founded, as Denning LJ said in James v Thomas H Kent & Co Ltd [1951] 1 KB 551, at 556, 'not in contract at all, but in restitution.' "
In Pavey & Matthews the appellant builder sued the respondent for the value of work done and materials supplied pursuant to an oral building contract. It was a case governed by s 45 of the Builders Licensing Act 1971 which provided that a contract to carry out any building work is not enforceable unless the contract is in writing signed by the parties. The New South Court of Appeal held that an action in indebitatus assumpsit to recover the agreed remuneration for building work done pursuant to an oral contract that was wholly executed was an action to enforce the contract. On appeal the High Court disagreed and held that an action on a quantum meruit rests not on an implied contract but on a claim to restitution or a claim based on unjust enrichment, arising from the respondent's acceptance of the benefits from the appellant's performance of the unenforceable contract. In his judgment Deane J found that the basis of the obligation to make payment for an executed consideration given and received under an unenforceable contract should now be accepted as lying in restitution or unjust enrichment.
The facts in Pavey & Matthews were very different from those relied on by the plaintiff in this case. There is no suggestion these contracts were unenforceable. On the contrary, the plaintiff's case is that the contracts are enforceable and it seeks to imply terms into those enforceable contracts which it suggests are necessary to give business efficacy to the contracts. The dicta of Deane J and Brennan J in Pavey & Matthews has no application in a case such as this one where the contracts are enforceable. An action based on restitution is only open to the plaintiff as an alternative to this action were it to be found that the agreement left no room for the implication of the terms. It is only if the matter does not rest in contract that the alternative action is open. That is confirmed by what Deane J said at 256. Nothing said in Pavey & Matthews prevents as a matter of law the terms suggested by the plaintiff from being implied into these contracts.
The defendant's assertion that the implied terms contradict the express terms of the contract is not supported when the terms of the contracts are compared with the implied terms. The contracts are silent as to the obligations of the parties in the event that the defendant requests further shop drawings after the contracted drawings have been completed. I accept the plaintiff's submission that it is open to argue that the implied terms are necessary and give business efficacy to the contracts. They do not contradict any express terms of the contracts so long as the plaintiff is able to establish the factual basis on which it brings its case. That could pose considerable difficulties. The defendant's submissions proceed on the basis that the plaintiff is rendering further charges for the same work it had already contracted to do. Unless the plaintiff is able to establish that there was additional work not included in the original contract which was requested of it and which it performed its action will fail. But that does not mean that as a matter of law it cannot take its action to trial. The circumstances in this case are quite different from those in Pavey & Matthews where the oral contract was itself unenforceable.
I accept the defendant's contention that there is authority for the proposition that evidence of the subsequent behaviour of the parties is not admissible unless there is ambiguity in the contract. However it seems to me that the judgment of Justice Mason in Codelfa and the passages I referred to earlier in this judgment show that account can in some circumstances be taken of the parties' presumed intention when the court is called upon to decide whether a term is to be implied (Codelfa at 353). This seems to be a developing area of the law. It is at least arguable that the performance of the contract could in some circumstances provide such evidence of the presumed intention of the parties.

Restitution

Except in the Champion Drive agreement, the plaintiff pleads its case in the alternative in restitution (pars 17, 25 and 34). The defendant contends that each of those pleadings is bad because of the plaintiff's failure to state the material facts underlying each element of the claim. The defendant relies on the decision of Gummow J in Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363. Gummow J struck out a pleading which asserted an enrichment but did not sufficiently specify the material facts upon which the plaintiff relied.
In Winterton Constructions the pleading in contention was in these terms:
"23.Further, or alternatively, [Winterton's] execution of the final work at the request of [Hambros and Pan], notwithstanding the decision referred to in para 15, has by its improvement in the value of the [property] (as set out in para 14) enriched [Hambros] as its mortgagee such that it is and would be unconscionable for it to retain the benefit of that enrichment without paying to [Winterton] the unpaid progress claim [sic]."
The specific material facts which Gummow J found were not specified were:
(i)to show enrichment of [Hambros],
(ii)at the expense of [Winterton] and
(iii)in circumstances demonstrating the necessary element of injustice [sic] (at 376).
Unjust enrichment provides the conceptual basis of a claim for restitution (Pavey & Matthews per Deane J at 256): " 'Restitution' is a shorthand way of saying 'restitution for an unjust enrichment'." (Keith Mason and J W Carter: Restitution Law in Australia at p10.) The three elements of a claim for restitution must incorporate the elements of unjust enrichment:
(1)the enrichment itself;
(2)that the enrichment was obtained at the plaintiff's expense'
(3)that the enrichment (or its retention) is unjust. (Mason and Carter at p10.)
I accept that it is not sufficient to assert unjust enrichment in the absence of the facts supporting the claim (Winterton Constructions: also, Reed International Books Australia Ltd (T/as Butterworths) v King & Prior Pty Ltd& Ors (1993) 44 FCR 587). In Reed's case the pleading did not plead the detailed facts underlying its assertions of unjust enrichment at the expense of the plaintiff nor did it plead facts to support its pleading that it would be unjust and inequitable for the defendant to retain the benefit (Reed's case at 593). Despite this Einfeld J found that the pleading did disclose a reasonable cause of action and should not be struck out.
In this case pars 17, 25 and 34 refer to "additional work". Two pages of particulars of "additional work and time" under the UWA agreement are found in par 13 of the statement of claim. Particulars of "additional work" under the Mirrabooka agreement are found in Annexure "A" comprising some 18 pages. Particulars of "additional work" under the Amcap agreement are found in Annexure "C" comprising some four pages. Those particulars of "additional work" provide the factual basis and the necessary detail of the pleading of enrichment. They also provide the factual basis for the pleading that the enrichment was obtained at the expense of the plaintiff. The plaintiff has pleaded in par 17 that the defendant in each case requested the plaintiff to perform the additional work when it knew, or ought to have known that such work was outside the contract. Those facts provide a sufficient factual basis for establishing that the enrichment (or its retention) is unjust.
For these reasons I consider the plaintiff has sufficiently pleaded the material facts underlying each element of its claim for restitution. A reasonable cause of action is disclosed; the pleading is not embarrassing and should not be struck out.

Damages for breach of Mirrabooka Agreement

In par 26 the plaintiff pleads damages for breach of the Mirrabooka agreement.
The defendant suggests in its written submissions that the proposition underlying this claim is that the plaintiff can tender for work on the basis of incomplete, unclear, and inaccurate drawings, can then spend time identifying, resolving and seeking clarification of the defects, and then claim damages for any time spent in addition to the contract price. The defendant contends this claim is totally misconceived. The defendant's contentions suggest fact finding on evidence not yet led will inevitably lead to such findings as he suggests. That is not a pleading point. If the evidence does lead to such findings this claim may well fail but that is not my concern on this application.
The defendant relies on McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 414 for the proposition that recovery of wasted expenditure as damages for breach of contract requires the plaintiff to plead and prove that the expenditure was reasonably incurred in reliance on the promise of the party in breach and suggests that the defendant's promise has not been pleaded. That submission ignores the implied term pleaded in par 20(2) and referred to in par 26(1) which contains the promise. Both McRae's case and the High Court decision in Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 were concerned with difficult issues facing a plaintiff in proving its damages for breach of contract. In Amman's case Deane J said at 126:
"In a case where a plaintiff has incurred expenditure either in procuring the contract or in its performance but it is impossible or difficult to establish the value of any benefits which the plaintiff would have derived from performance by the defendant, considerations of justice dictate that the plaintiff may rely on a presumption that the value of those benefits would have been at least equal to the total detriment which has been or would have been sustained by the plaintiff in doing whatever was reasonably necessary to procure and perform the contract."
Both McRae and Amman support the approach the plaintiff has taken in pleading its action for damages for breach of contract.
The defendant's other contention is that par 26 should fail because it is pleaded cumulatively on the plaintiff's claims under the contract and for restitution; the defendant contends that par 26 should be pleaded in the alternative. Otherwise the plaintiff is allegedly seeking double damages as all claims rely upon the same "additional work".
I accept the defendant's submission that par 26 should be pleaded in the alternative to the plaintiff's other claims. Paragraph 26 amounts to a claim for restitution damages for breach of contract. "The role of restitution damages has been obscured by the accelerating impact of the modern law of restitution." (Cheshire & Fifoot: Law of Contract: 7th Aust ed at 781.) There would be no reason to proceed with the damages claim if the plaintiff can succeed in its claim for restitution. It is entitled to plead its claim for damages but it should be in the alternative to its claim for restitution.

General matters

The defendant raised a large number of issues, many of which seem to be based on a misreading of the plaintiff's pleadings. For example the defendant contends that the plaintiff included the original work it contracted to do with the additional work in its pleading. But in my opinion a fair reading of pars 13(3), 21(3) and 30(3) leaves no confusion as to the "shop drawings" the subject of the contracts and the "additional work" as particularised in each contract. There is no confusion generated by those paragraphs; a fair reading discloses the case the plaintiff is attempting to make.
The final matter I need to consider is whether the plaintiff should be granted leave taking account of case management principles. There is no dispute that the plaintiff has taken an inordinate amount of time to plead its case. I accept the defendant's criticisms that although this may be a difficult case to plead, a competent pleader would not need seven or more tries before it succeeded in pleading the case. The case is well outside this court's case management milestones and has taken an inordinate amount of the court's time.
I accept the evidence I have received on affidavit from Gary David Foster sworn on 27 October 2000, the managing director of the defendant, that the plaintiff's allegations have caused him considerable stress. That is not surprising given the amount of money involved in this case. That is a factor properly to be taken into account when I consider the exercise of my discretion.
The defendant relied on the dicta of Stevenson LJ in Riches v DPP [1973] 2 All ER 935 at 942:
"It seems to me that … the comments of Lord Blackburn in Metropolitan Bank Ltd v Pooley are applicable. He said that a stay or even a dismissal of proceedings may 'often be required by the very essence of justice to be done'. The White Book (now 1995 vol 1 331 ‑ 332), having called attention to that statement by Lord Blackburn, goes on to say that the object is 'to prevent parties being harassed and put to expense by frivolous vexatious or hopeless litigation'. It would be contrary to the public interest that justice should be shackled by rules of procedure when the shackles will fall to the ground the moment the uncontested facts appear; and that is just this case."
In my reasons I have set out why I consider the plaintiff has an arguable case in contract relying on the implied terms, in restitution and for damages for breach of contract. Because the plaintiff's case is arguable I do not consider that this is a case where the plaintiff should not have his day in court. I believe it will be very difficult for the plaintiff to prove the matters it alleges. But that is not a reason for refusing to allow the plaintiff to plead and pursue its case.
Despite the inordinate delay and waste of the court's time this is a case where I believe the plaintiff has now adequately pleaded his causes of action. My grant of leave now will not cause any further delays; in fact, by granting leave on 3 November 2000 I allowed the pleading process to resume so that no further time was wasted.

I consider the plaintiff's case is arguable. In these circumstances I do not believe case management principles should override what seems to me to be the justice of the case. The plaintiff is entitled to have its case heard, to have the facts found and then to argue the questions of law before the trial Judge (Kimberley Downs Pty Ltd).
For these reasons I granted the plaintiff leave to amend its pleading on 3 November 2000.