Clayton Court Nominees Pty Ltd as trustee for the Steven J Pusey Trust and John Wallace as trustee for the J and G Family Trust and Alan O'Brien as trustee for the a and T Family Trust and MARDOL Chemicals Pty Ltd...
[2007] WADC 105
•11 June 2007 typed from tape and edited by Trial Judge
CLAYTON COURT NOMINEES PTY LTD AS TRUSTEE FOR THE STEVEN J PUSEY TRUST AND JOHN WALLACE AS TRUSTEE FOR THE J & G FAMILY TRUST AND ALAN O'BRIEN AS TRUSTEE FOR THE A & T FAMILY TRUST AND MARDOL CHEMICALS PTY LTD AS TRUSTEE FOR THE GEERS FAMILY TRUST -v- COOGEE HOLDINGS PTY LTD & ANOR [2007] WADC 105
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 105 | |
| Case No: | CIV:2003/2004 | 11 JUNE 2007 | |
| Coram: | PRINCIPAL REGISTRAR GETHING | 11/06/07 | |
| PERTH | |||
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| PDF Version |
| Parties: | CLAYTON COURT NOMINEES PTY LTD AS TRUSTEE FOR THE STEVEN J PUSEY TRUST AND JOHN WALLACE AS TRUSTEE FOR THE J & G FAMILY TRUST AND ALAN O'BRIEN AS TRUSTEE FOR THE A & T FAMILY TRUST AND MARDOL CHEMICALS PTY LTD AS TRUSTEE FOR THE GEERS FAMILY TRUST COOGEE HOLDINGS PTY LTD BEVERLEY CHERYL GILBERT AND JOHN WESLEY GILBERT |
Catchwords: | Leave to amend reply Late amendments |
Legislation: | Nil |
Case References: | Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82 Dare v Pulham (1982) 148 CLR 658 Hooker Corporation v Commonwealth of Australia (1986) 65 ACTR 32 Kimberley Downs Pty Ltd & Ors v State of Western Australia & Anor, unreported; SCWA; Library No 6414; 1986 Neilson & Anor v City of Swan [2006] WASCA 94 Sinclair v James [1894] 3 Ch 554 State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323 Wiltrading WA Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290 Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (2006) 33 WAR 1 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
COOGEE HOLDINGS PTY LTD
First Defendant
BEVERLEY CHERYL GILBERT AND JOHN WESLEY GILBERT
Second Defendant
(Page 2)
Catchwords:
Leave to amend reply - Late amendments
Legislation:
Nil
Result:
Application allowed
Representation:
Counsel:
Plaintiff : Mr D Barich
First Defendant : Mr M N Blandford
Second Defendant : Mr M N Blandford
Solicitors:
Plaintiff : Fiocco's Lawyers
First Defendant : Bowen Buchbinder Vilensky
Second Defendant : Bowen Buchbinder Vilensky
Case(s) referred to in judgment(s):
Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82
Dare v Pulham (1982) 148 CLR 658
Hooker Corporation v Commonwealth of Australia (1986) 65 ACTR 32
Kimberley Downs Pty Ltd & Ors v State of Western Australia & Anor, unreported; SCWA; Library No 6414; 1986
Neilson & Anor v City of Swan [2006] WASCA 94
Sinclair v James [1894] 3 Ch 554
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Wiltrading WA Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290
Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (2006) 33 WAR 1
(Page 3)
1 PRINCIPAL REGISTRAR GETHING: By application dated 22 May 2007 the plaintiff seeks leave to amend its reply to the amended defence and counterclaim filed by the defendants. The amendment sought is in a minute also dated 22 May 2007. The amendment sought to par 18(d) of the minute is to add a pleading that there was no failure to mitigate loss and damage. That pleading arises in the context of the defendant having alleged a failure to mitigate loss in unreasonably expending money to remove certain dust from the leased premises the subject of the dispute.
2 The plaintiff by its proposed amended pleading states that the special precautions taken in removing dust were necessary and reasonable in the circumstances. The three circumstances are set out: firstly, that the dust contained silica; secondly, that it was not possible to determine whether the dust was toxic without laboratory analysis, a procedure which would have entailed delay and additional cost; thirdly, that the contractor was not prepared, in the circumstances set out above, to remove the dust without taking special precautions for the protection of its employees.
3 In terms of the legal context, the court will not grant leave to a party to make an amendment which does not disclose a reasonable cause of action: Sinclair v James [1894] 3 Ch 554 at 557. Neither will the court grant leave to make an amendment which could be struck out as defective on any of the grounds set out in Supreme Court Rules O 20 r 19(1)(b) to (d): Hooker Corporation v Commonwealth of Australia (1986) 65 ACTR 32 at 38.
4 In that context the defendant raises four grounds on which it seeks to challenge the pleadings. The first is that the proposed pleading does not disclose a reasonable cause of action or, more particularly, a reasonable ground of defence; the second being that it was frivolous; the third, embarrassing; the fourth, that it is an abuse of process.
5 The defendant in the course of argument conceded that in relation to the first no evidence can be called. That is correct, in my view, because the issue for the Court is to assume each of the facts pleaded is correct and, on the basis of those assumed facts, determine whether a cause of action is disclosed. The authority for that proposition is the oft-cited decision Kimberley Downs Pty Ltd & Ors v State of Western Australia & Anor, unreported; SCWA; Library No 6414; 1986, a decision of Master Staples on 25 August 1986. I note that that particular part of Master Staples' decision was recently followed by the Court of Appeal in Neilson & Anor v City of Swan[2006] WASCA 94 at 18.
(Page 4)
6 In relation to the remaining grounds of challenge, it is the case that affidavit evidence is allowed. However, regard needs to be had to the use to which that affidavit evidence might be put. In my view, there is a clear distinction between a summary judgment application and an application to challenge a pleading. In a summary judgment application the inquiry for the court is whether or not the evidence suggests that the plea is so clearly untenable that it cannot succeed or forms of tests along similar lines. The important thing is that the court starts from the factual basis and then looks at if there was any prospect of the cause of action so pleaded succeeding.
7 In relation a claim that the pleadings are frivolous or embarrassing, the key consideration for the court is whether or not the pleading meets the fundamental objectives of a pleading as set out in the decision in Dare v Pulham(1982) 148 CLR 658 at 654. There the members of the High Court stated that one of the functions of pleadings is to furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it.
8 In relation to an abuse of process claim, the commentary in Civil Procedure Western Australia, par 20.19.12 notes that the nature of the abuse of process may be such as that it can only be revealed by evidence. So, for example, it may well be the evidence is to the effect that there is a complete legal bar such that the action must fail or that the defence put forward is a sham and, therefore, an abuse. However, the commentary in that paragraph also goes on to provide that a party may not bring evidence that the allegations in a pleading are generally untrue and that the court will not ascertain facts over which there may be bona fide dispute.
9 Turning first to the question of whether or not the plea there was no failure to mitigate disclosed a reasonable cause of action, in my view, the paragraph pleaded does disclose a ground that is reasonable. Essentially, the pleading from the plaintiff is that there was no failure to mitigate loss because of the circumstances pleaded there which led to the contractor not being prepared to remove the dust without taking special precautions for the protection of its employees.
10 In the course of submissions, counsel for the defence took me to various discovered documents which go to the knowledge or the facts that may or may not have been in the knowledge of the plaintiffs at the point in time of the engagement of the contractor who cleaned out the particular dust from the premises. In my view, that goes beyond the factual material
(Page 5)
- that may be relied on relation to the pleadings challenge into the area which I have noted from the commentary in Civil Procedure Western Australia.
11 It may well be that at the trial of the action the submissions made by counsel for the defendant are accepted by the trial judge and the trial judge finds for the defendant on the question of whether or not there was a failure to mitigate. However, that is the appropriate forum for the determination of this issue and not in relation to a pleadings issue.
12 In relation to the question of whether or not the pleading is frivolous or embarrassing, in my view, the pleading is very clear in what it sets out to achieve and I am not persuaded that it is in any way frivolous or embarrassing. The defendant, if it chooses to file a pleading in response, knows the case it has to meet.
13 In terms of whether or not it is an abuse of process, if anything, the factual material relied on or drawn to my attention by counsel for the defendant leads me to the conclusion that it is a bona fide dispute between the parties as to whether or not it was reasonable for the plaintiff to have engaged a contractor to clean the dust and, in doing so, take special precautions.
14 There are two further levels to the analysis. The next level is the recent decisions by his Honour, Martin CJ, as to the circumstances in which the court should entertain challenges to pleadings. In the decision Barclay Mowlem Construction Ltd v Dampier Port Authority(2006) 33 WAR 82 his Honour, states the following (at p 84):
"In my view, it follows that provided the pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred,
(Page 6)
- should result in the court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained."
15 In the decision in Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd(2006) 33 WAR 1, the Chief Justice makes similar comments (at p 2).
"In many cases, the time and expense involved in the consideration and resolution of the interlocutory disputes is entirely disproportionate to its significance to the just and effective resolution of the case as a whole by mediation or trial."
16 In my view, the objections taken to this pleading fall squarely within the position outlined by the Chief Justice as to the type of pleading issue that ought not to be taken. That fact is a very powerful reason as to why this application ought to be allowed.
17 The final level of the application is a consideration of whether or not leave ought to be granted. This case is on the verge of being given trial dates for the second time, having had trial dates allocated in the past and those dates being vacated. In considering the exercise of the discretion to grant leave to amend the following five factors appear to be relevant:
(a) the prejudice to the plaintiff if leave is not granted;
(b) the prejudice to the defendant if leave is granted;
(c) the prejudice to the public interest - for example, the vacation of trial dates at such a late stage that they cannot be allocated to other litigants;
(d) the reasons for delay in the making of any applications; and
(e) case management considerations more generally.
18 In support of those five grounds it is necessary only to refer to three cases, being Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd(1994) 13 WAR 323 at 335-336,Wiltrading WA Pty Ltd v Lumley General Insurance Ltd(2005) 30 WAR 290 at 315-316 and State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154-155.
(Page 7)
19 The key consideration here is the relative prejudice to both sides. If leave is not granted the plaintiff is deprived of the opportunity to have the trial judge rule on an issue which I have found to be, as a matter of pleading, an arguable point. On the other hand, if leave is granted the prejudice to the defendant is that it has to deal with another issue at the trial of the action.
20 In submissions counsel for the defendant raised the issue that the amendment would require the defendant to prove that the dust in question was not toxic. It would then use that as a foundation for an argument that the precautions taken by the contractor were excessive and, therefore, there was a failure to mitigate. In that context, it was then conceded by counsel that there is presently expert evidence exchanged between the parties that the dust in question was not toxic. In fact, it was described in submissions as being common ground between the parties' respective experts. Therefore, the amendment does not seem to require the defendant to carry out significant further factual inquiries, nor would it seem to give rise to significant further discovery or like issues.
21 The point raised was that it may well lead to the defendant having to bring its expert over from the Eastern States to attend the trial of the action. The reason why the expert would need to attend is to prove that the dust was toxic. It is open to the defendant to invoke the notice to admit procedure to flush out whether or not the question of the toxicity of the dust is actually a live one in the proceedings and the notice to admit procedure has its own cost consequences.
22 In any event, the detriment or prejudice referred to by counsel is one that is of the class that can be compensated for by an appropriately drafted award of costs at the trial of the action.
23 No other specific grounds of prejudice were drawn to my attention. In that context, the case seems to fall squarely within that contemplated by the High Court in JL Holdings Pty Ltd to which I have referred earlier. There members of the High Court said that case management considerations need to be weighed against potential injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In my view, that is what I would be doing if I were to disallow this amendment. Accordingly, the amendment ought to be allowed.
0
9
1