Built Pty Ltd v C and L Ceilings Pty Ltd
[2019] WADC 52
•12 APRIL 2019
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: BUILT PTY LTD -v- C & L CEILINGS PTY LTD [2019] WADC 52
CORAM: DAVIS DCJ
HEARD: 29 MARCH 2019
DELIVERED : 12 APRIL 2019
FILE NO/S: CIV 985 of 2018
BETWEEN: BUILT PTY LTD
Plaintiff
AND
C & L CEILINGS PTY LTD
Defendant
C & L CEILINGS PTY LTD
Plaintiff by counterclaim
BUILT PTY LTD
Defendant by counterclaim
Catchwords:
Civil procedure - Case management - Whether witness outlines should be ordered
Legislation:
District Court Rules 2005 (WA), r 24
Supreme Court of Western Australia Consolidated Practice Direction,
Direction 4.5
Result:
Application for order for witness outlines dismissed
Representation:
Counsel:
| Plaintiff | : | Mr T J Palmer |
| Defendant | : | Mr S C M Wong |
| Plaintiff by counterclaim | : | Mr S C M Wong |
| Defendant by counterclaim | : | Mr T J Palmer |
Solicitors:
| Plaintiff | : | Hotchkin Hanly |
| Defendant | : | Hopgoodganim Lawyers (Perth) |
| Plaintiff by counterclaim | : | Hopgoodganim Lawyers (Perth) |
| Defendant by counterclaim | : | Hotchkin Hanly |
Case(s) referred to in decision(s):
Cristovao v Butcher Paull & Calder [2008] WADC 49
Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214
Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336
Mincode Pty Ltd v Isa Pty Ltd (1996) 17 WAR 245
QBE Insurance (Australia) Ltd v Coffey [2015] WADC 110 (S)
DAVIS DCJ:
This action has been listed for trial commencing 29 July 2019.
Before then, I have been asked to resolve a matter of case management, and that is whether or not to order that the parties exchange witness outlines before the trial.
The exchange of witness outlines is a new procedure introduced in the Supreme Court by amendments to the Supreme Court of Western Australia Consolidated Practice Direction (CPD), Direction 4.5, effective from 1 February 2009. As explained in a notice to practitioners dated 29 January 2019, where the standard case management directions for civil actions in the Supreme Court once provided that witness statements were to be exchanged prior to trial and stand as the witness' evidence‑in‑chief, written statements as evidence‑in‑chief are now to be the exception rather than the rule. This is because, as the notice to practitioners has frankly stated:
While the use of witness statements … is intended to promote the efficient and just determination of civil disputes, in practice their use has not always met those objectives.
The CPD Direction 4.5 has been amended to now provide that, ordinarily, evidence‑in‑chief at trial will be given orally, without the use of witness statements, but that there will be orders made for the exchange of witness outlines. The procedures are set out as follows:
7.A witness outline must be directed only to matters in issue.
8.A witness outline must clearly identify all the topics in respect of which evidence will be given and the substance of that evidence, including the substance of each important conversation.
9.Where a witness refers to a document in a witness outline, they must identify the document by its description and its discovery number or, if an order has been made for a trial bundle to be filed, by a description of 4. General Division - Civil PD 4.5 Supreme Court of Western Australia Consolidated Practice Direction the document and by the page number in the trial bundle. If an order has been made for an electronic trial bundle to be filed, the document must be referred to by the document number assigned to it and the page number within that document.
10.Where a witness outline is ordered, the case manager will ordinarily order that no party may use any part of the contents of that document for the purpose of cross-examination of the witness without leave of the trial judge.
As explained in the Supreme Court's notice to practitioners:
Witness outlines must identify the topics in respect of which evidence will be given and the substance of that evidence, including the substance of each important conversation. The purpose of the outline is to provide notice of a witness' evidence in chief to the court and other parties. They are not, and do not become, evidence.
Orders for the exchange of witness statements and for witness statement to stand as evidence in chief are to be the exception, and will only be made where a party satisfies the court that this course will better achieve the objects of efficiency, just determination of litigation and proportionality than if evidence were to be given orally in the usual way.
Ordinarily, the use of a witness statement will not be appropriate where contentious evidence is to be given of facts dependent on the recollection of the witness or where the credit of the witness is likely to be challenged on the topic.
The District Court is not bound by the case management practices of the Supreme Court. The District Court has its own case management regime pursuant to the District Court Rules 2005 (WA) (DCR). Although it may be ordered that either an affidavit or a witness statement stand as the evidence‑in‑chief of a witness, it is not a standard order made in all civil cases.[1]
[1] See DCR r 24(2)(i) to (k) and the District Court Consolidated Practice Directions and Circulars to Practitioners – Civil Jurisdiction par 14.10.
The defendant in this case has submitted, however, that in the particular circumstances of this case, this court should follow the new practice of the Supreme Court and order the exchange of witness outlines. The plaintiff opposes the making of such an order.
For the reasons which follow I am not satisfied that it is appropriate to order the exchange of witness outlines.
The pleaded issues in this case
The plaintiff was the main contractor and the defendant was a subcontractor for a building project known as Heirloom Fremantle. The parties entered into a written subcontract agreement on 25 August 2015. Under the written subcontract the price payable for the works carried out by the defendant was $10,100,000 (excluding GST).
The pleadings are a little confusing, using both figures with and without GST. For the purpose of this summary I will indicate this with the amounts identified as '(ex GST)' or '(incl GST)'.
The plaintiff claims that at the conclusion of the subcontract, on 8 November 2016 the defendant submitted a 'final claim' where the defendant's calculation of the final contract sum was $10,741,717.11 (ex GST) or $11,815,888,82 (incl GST).[2]
[2] Statement of claim par 5.
Following this, there was a meeting held on 9 November 2016 attended by Mr Rodney O'Neill, on behalf of the plaintiff and Mr Gary Leach and Mr Peter McGrath on behalf of the defendant, where the total amount payable by the plaintiff to the defendant was agreed to be $10,575,000 (ex GST) or $11,632,500 (incl GST).[3] This meeting has been referred to by the plaintiff as the 'Final Claim Meeting'.
[3] Statement of claim par 6 and 7.
The plaintiff pleads that at the time of the Final Claim Meeting the plaintiff had already paid $10,617,711.22 (incl GST) to the defendant, so that, based on the agreed total amount, the plaintiff still had to pay the defendant $1,014,788.78 (incl GST). However, the plaintiff made two payments of $592,977.92 (incl GST) and $986,875.76 (incl GST) and thus it overpaid the defendant by the sum of $565,064.90 (incl GST).[4] After taking into account a bank guarantee paid to the plaintiff, the amount which the plaintiff says the defendant should repay is $299,064.90 (incl GST). The plaintiff's claim for repayment of this sum is based in restitution for monies had and received by mistake of fact, unjust enrichment and breach of contract.
[4] Statement of claim par 8 to 12.
The defendant claims that it was not overpaid and denies that the final contract sum and total amount payable by the plaintiff was agreed to be $10,575,000 (ex GST) or $11,632,500 (incl GST). The defendant pleads that at the meeting on 9 November 2016 there was a settlement agreement entered into between the parties by which it was agreed that the defendant would receive a final payment of $1,444,933 (ex GST) or $1,589,426.30 (incl GST) (the final payment).[5] This settlement agreement was partly oral – constituted by discussions between Mr O'Neill of the plaintiff and Mr Leach of the defendant and partly in writing by a deed entitled 'Subcontractor Release'. This document has also been referred to as the 'deed poll'. It was a document prepared by the plaintiff but only signed by the defendant.[6]
[5] Amended defence par 7.
[6] Amended defence par 11A.
The defendant has also claimed that:
(a)the plaintiff is estopped from claiming back the monies from the defendant. It is pleaded that there was a mutual assumption that the deed poll was a legally binding agreement between the parties on terms that the plaintiff would pay the final payment to the defendant of $1,444,933 (ex GST) and the defendant would release and discharge the plaintiff from all claims for payments for the works or any variations, remedial work or other works. If the plaintiff is able to resile from the mutual assumption the defendant will suffer detriment because it has lost the opportunity to negotiate payment for the works or any variations, remedial or other work.[7]
(b)the plaintiff still owes $9,572.62 (incl GST);[8] and
(c)the plaintiff was not entitled to call upon the bank guarantee of $266,000.[9]
[7] Amended defence par 11A and 11B.
[8] Counterclaim par 19 to 22.
[9] Counterclaim par 23 to 27.
In its counterclaim, the defendant seeks damages for breach of the settlement agreement and loss and damage arising from the plaintiff's call on the bank guarantee.[10]
[10] Counterclaim par 19 to 22 and 23 to 29.
In reply, the plaintiff has pleaded that there was no settlement agreement as alleged by the defendant and the final payment amount of $1,444,933 (ex GST) was not discussed or agreed to at the meeting of 9 November 2016.[11] There was a mistake in par 2.2 of the deed poll where it stated the final payment was $1,444,933 (ex GST). It should have been $1,014,788.78.[12] This is pleaded to be an 'obvious mistake' based on what else was set out in par 2.1 of the deed poll. In fact it is pleaded that there were two mistakes because the deed poll also incorrectly recorded the previous payments which the plaintiff had made.[13]
[11] Amended reply par 4(eA).
[12] Amended reply par 4.
[13] Amended reply par 4(g) and (gA).
The plaintiff claims rectification of the deed poll based on either a common mistake or, alternatively, a unilateral mistake on the part of the plaintiff, with the deed poll executed by the defendant in the knowledge that there was a mistake as to the correct amount of the final payment.[14]
[14] Amended reply par 4(h) to (k).
Finally, in response to the defendant's claim for estoppel, in par 5A of the amended reply the plaintiff has pleaded as follows:
5AThe plaintiff denies paragraphs 11A and 11B of the Defence and Counterclaim, and says further that whether or not the defendant should receive any payment from the plaintiff for any further claims made by the defendant arising out of the defendants performance of the Subcontract, was the subject of negotiations prior to, and at, the Final Claim Meeting.
This appears to address the pleaded case by the defendant that it has lost the opportunity to negotiate payment for the works or any variations, remedial or other work. The defendant had a problem with the particularity of this pleading, but particulars have been informally provided by the plaintiff, advising that there was an additional meeting discussing these matters held on 25 October 2016 and setting out who attended that meeting.[15]
[15] Letter dated 26 March 2019 from the plaintiff's lawyers to the defendant's lawyers, annexure HMH 2 to the affidavit of Howard McMahon Healy sworn 28 March 2019.
Based on my review of the pleadings, I summarised the issues in this case, with no real disagreement from counsel for each party, to be as follows:
1.As at 9 November 2016 what payments had been made by the plaintiff to the defendant pursuant to the subcontract?
2.As at 9 November 2016 what was due and owing by the plaintiff to the defendant pursuant to the subcontract?
3.What was discussed and agreed, if anything, by the parties at the meetings held on 25 October and 9 November 2016?
4.Was the figure for the final payment inserted in the deed poll of $1,444,933 (ex GST) a mistake?
5.Was the mistake a common mistake or was it a unilateral one made by the plaintiff, with the deed poll executed by the defendant in the knowledge that the plaintiff had made a mistake (or in other circumstances which would render it unconscionable that the deed poll should not be rectified)?
6.Is the plaintiff estopped by the terms of the deed poll from claiming that the defendant has been overpaid?
Critical in this case will be the evidence from each of the witnesses about what was discussed and agreed (if anything) at the meeting of 9 November 2016 when the deed poll was signed.
In light of the pleadings and the submissions that I heard on the hearing of this matter, it appears to me that:
(a)The plaintiff's case is that at the meeting of 9 November 2016 the only thing agreed was the total amount payable by the plaintiff to the defendant which was $10,575,000 (ex GST). That figure was recorded in the deed poll. The final payment amount of $1,444,933 (ex GST) which appeared later in the deed poll, par 2.2, was a mistake. That amount was not discussed or agreed to at the meeting of 9 November 2016.
(b)The defendant's case is that the total amount payable of $10,575,000 (ex GST) was not discussed or agreed to at the meeting of 9 November 2016. However, the final payment amount of $1,444,933 (ex GST) was discussed and agreed to and there was no mistake about that.
The parties' submissions
The defendant submitted that witness outlines were warranted in this case for three reasons.
The first is that the exchange of witness outlines will ensure that issues are clearly defined so the defendant will know the case it has to meet at trial.
This submission centred around par 5A of the amended reply. Rather than seek further and better particulars of that pleading, the defendant submitted that these matters could be efficiently and expeditiously addressed in the plaintiff's witness outlines.
There was also some criticism of the plaintiff's claim for rectification of the deed poll, with the defendant submitting that the claims for rectification based on the alternatives of common mistake and unilateral mistake are inconsistent, and the plaintiff needs to make an election as to which of these it is going to run at trial.
The defendant also perceived an inconsistency between the plaintiff's pleading that the amount of the final payment was not discussed or agreed on 9 November 2016 (in the amended reply par 4(eA)), and that the deed poll mistakenly stated what the final payment was (amended reply par 4(g)).
The second reason the defendant gave for the use of witness outlines was that they will ensure that the case does not stray into irrelevant matters. This submission was made on the basis that there had been an agitation by the plaintiff's lawyers in seeking further and better discovery on whether variation works were actually performed and invoices rendered by the defendant. Given that the plaintiff's solicitor had pressed these issues, it was a matter of importance to the defendant to know whether the plaintiff was alleging that variation works were not performed or invoices rendered by the defendant were not legitimate.
The third reason for ordering witness outlines was that they would 'facilitate the prospects of early settlement'. That reason has not been expanded upon in the submissions, either written or oral.
The balance of the defendant's submissions, both written and oral, addressed the plaintiff's objections to witness outlines. In the course of addressing these, counsel for the defendant made submissions on the issue of costs and proportionality. Counsel submitted that these are important proceedings to the defendant where there is over half a million dollars at stake and the costs of preparing witness outlines is proportionate to what is in dispute. The witness outlines are anticipated to be only short documents which could be prepared while witnesses are being proofed for trial.
The conclusion in the written submissions prepared on behalf of the defendant was that the preparation and exchange of witness outlines will not add significantly to the burden and cost of preparing for trial (given that the parties will be proofing the witnesses anyway). It was submitted that on the contrary, the preparation and exchange of witness outlines provided the quickest and most cost efficient method of reaching a fair, just and expedient determination of the matter.
The plaintiff's written submissions outline, in substance, the following reasons for objecting to witness outlines.
First, the court will be best placed to assess the evidence from witnesses if it is led in the traditional manner. There is nothing unusual or unique about this case which warrants a departure from the traditional practice in relation to evidence in chief.
Secondly, the substance of the evidence to be covered by the main witnesses is well defined by the pleadings. The plaintiff also noted that if the defendant had concerns about the pleadings, it was open to the defendant to object to them or seek further particulars. That the defendant has raised a concern about the quality of the pleading is not sufficient reason to depart from the traditional practice in relation to evidence in chief.
Thirdly, the ordering of witness outlines will add to the costs and expense of this action. The plaintiff noted that the dispute about this particular procedural matter had already caused delay and expense and the production of submissions that might be expected on a contested interlocutory dispute.
Consideration and conclusion
The submissions from the defendant proceed on the basis that the District Court should accept and follow the practice adopted by the Supreme Court. In my view, while the CPD may be a guide to the exercise of discretion in an appropriate case in this court, the judges of the District Court should follow the case management regime which applies in this court.[16]
[16] Whether to follow the Supreme Court Consolidated Practice Direction has been addressed in two cases which I am aware of in this court, in relation to costs orders, Cristovao v Butcher Paull & Calder [2008] WADC 49 [48] – [50] and QBE Insurance (Australia) Ltd v Coffey [2015] WADC 110 (S) [68] - [75].
DCR r 24(1) provides that the court has the discretion to make any procedural direction that in the court’s opinion it is just to make in a case to facilitate the case being conducted and concluded efficiently, economically and expeditiously.
I am not satisfied that it is just to order the exchange of witness outlines or, indeed, witness statements in this case.
In my view the issues have been adequately identified by the pleadings. The defendant knows what case it must meet at trial.
The principal concern which the defendant had about the pleadings was in relation to a lack of particulars in par 5A of the reply, which is in response to the defendant's estoppel claim. Further and better particulars have, however, been provided by letter from the plaintiff's solicitors.
As to the alleged inconsistency in the plaintiff's pleading of rectification raised by the defendant, this does not relate to any factual matter which will need to be addressed by witness outlines. In any event it is my view that it is permissible to run a claim for rectification based on alternative claims of common mistake and unilateral mistake: see for example Maralinga Pty Ltd v Major Enterprises Pty Ltd (1973) 128 CLR 336; Mincode Pty Ltd v Isa Pty Ltd (1996) 17 WAR 245; Fox Entertainment Precinct Pty Ltd v Centennial Park and Moore Park Trust [2004] NSWSC 214. If it is the case that the plaintiff needs to make an election on the rectification issue, that is a matter that can be dealt with at trial.
I do not consider that there is an inconsistency between the plaintiff's pleading that the amount of the final payment was not discussed or agreed on 9 November 2016, and that the deed poll mistakenly stated what the final payment was. On my reading of the pleadings the plaintiff's case as to the meeting of 9 November 2016 is as I have set out in [23] above.
I give little weight to the defendant's submission that the preparation of witness outlines would ensure the case does not stray into irrelevant matters. What is relevant is defined by the pleadings. If, at trial, an attempt is made to lead evidence which is not relevant, appropriate objection may be taken. I do not consider witness outlines are necessary to address the possibility of irrelevant evidence being led at trial.
I am also unable to give much weight to the defendant's submission that ordering witness outlines would 'facilitate the prospects of early settlement'. 'Early' settlement must have been explored before the matter was listed for trial. I would expect the parties to continue to explore any way of settling this matter between now and the trial, whether or not witness outlines are ordered.
I am not satisfied that the case will be any more efficiently, economically or expeditiously run if witness outlines are ordered. The case is ready for trial and trial dates entered. The ordering of witness outlines will be a further step in the proceedings which the parties must take, and further costs will be involved in the preparation of these documents. Considerable costs have already been incurred in relation to the hearing before me, including the preparation of affidavits and submissions.
The witness outline procedure is new, and so far as I am aware, not something which has been utilised in any other case in this court. It is likely, given the history of interlocutory hearings in these proceedings, that the ordering of witness outlines may produce further interlocutory disputes between the parties as to the adequacy of the witness outlines. In addition, I cannot discount an application by either party to the trial judge to seek to cross-examine a witness on his witness outline.
In my view the proportionality of costs compared to the quantum of the amount in dispute, as submitted to me by the defendant, is not something which tips the balance in favour of making the order for witness outlines.
The real purpose for the defendant's request for witness outlines is so that the defendant can see, in advance of the trial, what the plaintiff's witnesses will say about what was said at the meetings of 26 October and 9 November 2016 – something that was conceded on behalf of the defendant in the course of the hearing before me.[17]
[17] ts 7 and 12.
I do not consider that the desire of one party to know the substance of the other party's evidence is sufficient reason to make the order sought by the defendant.
Based on my understanding of the pleadings and the issues in this case, as I have set out, I do not consider the factual matters in dispute in this trial to be complicated. There is likely to be divergent evidence to be given by the witnesses for each of the parties about what was discussed in their meetings. No doubt the recollection of the witnesses will each be challenged and the credibility of each witness will need to be considered carefully by the trial judge.
While I accept that not only the defendant but also the plaintiff may benefit from knowing in advance what the substance of the evidence of the witnesses will be, I doubt that the exchange of witness outlines is going to be useful for the trial judge. In my view the trial judge will be better placed to make an assessment of all witnesses' credibility if they give evidence from their own recollection, without knowing or being influenced by what the other witnesses are expected to say.
Accordingly, I am not satisfied that an order for witness outlines will achieve the just determination of the matter any more than if oral evidence were to be given in the usual way at trial.
In the circumstances of this case, particularly where the issues are limited, I am not satisfied that ordering the exchange of witness outlines will facilitate the efficient, economic and expeditious conduct of the case and I decline to do so.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DC
Associate to Judge Davis12 APRIL 2019
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