Colman v Gordon M. Jenkins and Associates Pty Ltd

[1987] FCA 821

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IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION	No. G 3 8 4 of 1986
NEW SOUTH WALES DISTRICT REGISTRY

Between: BRIAN JAMES COLEMAN

Applicant

-	And :	GORDON M. JENKINS
AND ASSOCIATES PTY. LIMITED

Respondent

CORAM: Einfeld J.

- DATE: 27 August 1987

PLACE: Sydney

EX-TEMPORE JUDGMENT

The applicant came to the Federal Court for the purpose of commencing a

case identified by the statement of claim as an alleged breach of

section 52 of the Trade Practices Act 1974 (the Act) by the respondent,

and in the exercise of the accrued jurisdiction of the court, in

negligence and breach of contract. The applicant also alleges breaches

of section 53 of the Act.

At the commencement of the hearing, the applicant sought leave to file

an amended ,statement of claim, which I was informed was first made

available to the respondent yesterday afternoon. It is clear from

a

consideration of the amended statement of claim that it substantially

broadens the legal and conceptual basis of the claim, and it appears

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also to broaden its factual matrix by altering in some significant ways,

the basis of certain of the exercises of the court's accrued

jurisdiction. In meeting the application for leave to proceed upon the

amended statement of claim, the respondent, whilst formally objecting,

acknowledges that it is likely that the court would permit the applicant

to conduct his full claim, rather than force him to proceed on the

truncated basis supplied by the original statement of claim and

application.

In these circumstances, the respondent says that it should be granted an

adjournment, with its costs thrown away by the nature of the amendments,

by reason of the fact that the amended statement of claim will require

it to do considerably more preparation and investigation, including at

least the requirement of additional particulars and discovery, and

perhaps an application for leave to administer interrogatories.

In addition, today, the applicant provided, for the assistance of the

court, and without prejudice to any right which the respondent may wish

to exercise to apply for appropriate orders, a schedule of damages. It

is agreed that this schedule had not previously been supplied to the

respondent. It constructs the applicant's claim for damages by

reference to four conceptual matters.

The first is the amount which the applicant alleges was said by the

respondent to be the maximum cost of the building to be erected. That

item, whilst apparently disputed by the respondent, could not catch the

respondent by surprise because it has always been part of the

applicant's allegations.

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The second amount contained in the schedule of damages is the sum which

the applicant says he has expended up to date, exclusive of interest, in

the construction of the building concerned. That is an alleged amount

of $138,000, which, however it may vary in number from other figures

given to the respondent, is also unlikely to embarrass the respondent in

any particular respect.

The third item that is referred to is called, in the document,

rectification costs of $65.000, but which the applicant explains is

really the maximum cost to complete the building to either a

satisfactory condition or, perhaps, to the condition in which the

applicant believed the building would be if, on his allegation, the

contract was adequately performed by the respondent.

That matter appears to be entirely new, at least in that the respondent was of the opinion that the case did not embrace any issue concerning the completion of the building, and therefore its quality up to date,

either in terms of general legal principles or in terms of the

contractual arrangement which has been alleged. I can see that the

inclusion of this amount would considerably change and would certainly

lengthen the nature of these proceedings.

On the one hand, the respondent was expecting to meet a case which was,

in substance, a breach of contract case. On the other hand, the

applicant proposes to lead evidence that even on the completion of the

contract for a higher price than he says he was to be charged, he still has not obtained the building which he allegedly contracted to obtain.

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That means that the respondent would have to meet a case based upon the defects, perceived or otherwise, of the current building, and the appropriateness as well as the costing of any additions that need to be

made to it. Although the amount involved in this aspect may be as low

as $55,000. even though the document alleges $ 6 5 . 0 0 0 , and in the overall

amount claimed is only less than half of the amount in issue, it obviously would be likely to occupy a considerable amount of court time

in adjudicating; and it is clear that evidence would have to be

specifically directed to this matter of a quite different kind to that

which would comprise the proof of or defence to the remaining part of

the claim.

The fourth item in the schedule of damages deals with interest. It is

conceded, and properly so, that the amounts set out under this heading

in the schedule are, at least, mathematically incorrect and conceptually

wrong. Nonetheless, they would have a very significant effect on the amount of damages to which the applicant may be entitled, and would undoubtedly be the subject of considerable argument, both conceptually and mathematically.

By itself it seems to me that inclusion of this item and its

particularization in the schedule of damages, even as amended later by fresh calculations, would not create any serious prejudice to the respondent if the case were commenced today. Appropriate orders could be made in the course of the proceeedings which would protect any

difficulties that the respondent might have in meeting this aspect.

In response to the request of the respondent for an adjournment, the applicant says that if faced with a choice of an adjournment or the amended statement of claim, he would choose to forego the amended

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statement of claim, so far as the addition of paragraphs 11B to 11E are

concerned. These allege, inter alia, negligent misstatements and other

assertions which are quite new to the proceedings today.

However. the applicant does not concede the amendments submitted in the

amended statement of claim, so far as they affect some factual

assertions of significance, particularly those in paragraphs 6	and l ,
where the original timing and content of the dealings between the

parties has undergone substantive alteration. This litigation, in

factual terms, goes back to 1983, when the parties first, apparently,

came into contact.

Already, therefore, some four years have passed between many of the

factual allegations to be made and the occasion when witnesses are going

to have to swear to conversations which took place at that time. It is

always unsatisfactory that such a long time should be allowed to take

place between the actual happenings of events such as this and their

relation in the witness box on oath.

To lengthen that time even further, albeit perhaps for only three to six

months, makes even more difficult the ascertainment of the facts by the

court, especially when I am told that there are considerable factual

disputes about what did pass between the parties at the time.

Senior counsel for both parties have informed me that this case, either on the original statement of claim, and particularly on the amended

statement of claim and the schedule of damages presented, is quite

unlikely to finish	in less than three days and may, in fact, take more
than five days.

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My own experience tells me that five days is probably the least we could

be looking at. The matter was fixed originally for one day plus or two

days and we have already taken half a day on this argument. I must

therefore face the reality that if the case were to commence this

afternoon, and I were to be able to make available a considerable

portion of tomorrow, plus Monday and Tuesday, which may be made

available by re-arrangements within the court, it is unlikely that the

case will be completed, and it will then have to be adjourned part-heard

until November at the earliest.

If the matter is adjourned, it is possible that a hearing date could be

obtained so that the matter could be heard without interruption to

completion within the last month of the 1987 court year. In these

circumstances the applicant would lose nothing in terms of time of any

significance i,f the hearings were all take to place in

NovemberIDecember, as opposed to being completed in that time.

However, the respondent's application for adjournment carries with it

the understandable sting of an order for costs, and it therefore becomes

necessary to consider the matter in principle, especially as the costs

thrown away may bear a very significant disproportion to the amount that

might ultimately prove to be in issue between the parties.

Therefore, the real question that falls to be determined is whether the

applicant by amendments to clauses 6 and 7 of the statement of claim, or

as now appears in the amended statement of claim as clauses 6 and 7, has

so substantially altered the case as to have caught a well prepared

respondent by surprise, especially when one adds to it the third item of

damages to which I have referred, namely, the costs alleged to be now

required to bring the building up to either the standard embraced by the

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contract or a reasonable standard, whichever might happen to be held to

be appropriate.

I should also consider in this connection the significance to the

applicant of the withdrawal from the case of proposed paragraphs 11(B)

to (E), especially paragraph 11(E)(iii). This is a clause which

alleges, though not I think yet in adequate or precise enough terms,

that in fact the applicant was induced by the representations of the respondent to borrow moneys from the State Bank and incur debts with

building contractors for the erection of the dwelling involved over and

above the $ 8 0 . 0 0 0 which the applicant believed he would have to have in

hand to finance the building discussed and allegedly agreed between him

and the respondent.

Attempting to relate that allegation with the schedule of damages is

difficult but it is possible, and I say no more than that, that the

fourth concept comprised in that schedule is really intended to be the

particularisation of that allegation. At present it falls short of

doing so, as do the words of the actual allegation in the amended

statement of claim, but in discussion during the course of argument it

appears that that is in substance what the allegation means.

If so, it is a substantial allegation in money terms, as well as in

legal terms and if successful would make a very considerable difference,

at least potentially, to the size of any verdict of damages which the

complainant would hope to achieve in these proceedings.

It is obvious that if there is to be an adjournment on the basis of the

amendments that now comprise clauses 6 and l of the amended statement of

claim, the applicant will persist in his assertions of paragraphs 11(B)

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to ( E ) , and the considerable changes which they make to clause 12 whose

opening words would have a meaning quite different if 11(B) to (E) are

included than they would if 11(B) to (E) were excluded.

It is always unsatisfactory in substantial litigation to conduct it on

some truncated or abbreviated basis, especially in a piece of complex

litigation such as this apparently is to be. The problems that can

arise in the course of a hearing, in this type of circumstance, do not

need to be outlined exhaustively, but it will suffice to say that,

should the applicant present his case on some basis similar to that

contained in the original statement of claim, even with different

factual allegations, and it should turn out that he fails to prove a

case under the relevant statutes or common law counts, as they used to

be called, but could prove a case on the same evidence under one of the

removed heads of liability, a substantial injustice could result.

This would particularly be so if as a result of embarking upon such a

hearing a claim which might have been available had it been pursued when the hearing commenced, ceased to be available, for example, by reason of

becoming statute barred in the meantime, or for some other factual	or
legal reason.

I should mention the possibility of a defence to some part ‘of the

amended statement of claim based upon the appropriate statute of

limitations forecast in argument by senior counsel for the respondent,

and whilst an adjournment for some months may not have any effect at all

on that matter, it is not possible for me at the moment to say that it

would not have some effect.

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In all these circumstances, it seems to me that the balance of justice

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requires that an adjournment be granted to the respondent. The

i	respondent faces the prospect of the applicant's maximum claim of having
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~	to pay damages of or in excess of $200,000. On any view, this would be
a substantial sum, and whilst it represents the maximum of the claim of the applicant as presently framed, and whilst on another view, the
matter might be an argument only over $50.000 or $60,000, assuming
damages at all, I must view it from the position of the case which the
respondent is presently being asked to meet, even if it should
eventually turn out that the maximum claim of the applicant is wholly
exaggerated and quite invalid.
The parties really must come to court to fight the same substantive
case. I would not be at all concerned if they came to court to fight
cases which were different in terms of the damages about which each was
speaking, provided the philosophical or conceptual bases for the
construction of those damages were the same, and provided they were said to flow from the same legal premises.
It is clear that neither of these matters exists in this case at the
present time, and for those reasons I feel that the applicant is
entitled to the amendment which he seeks in the statement of claim, and
the respondent is entitled to the adjournment which it seeks as of the amendment. Because this adjournment has been brought about a result
solely by the late amending of the statement of claim in such matters of
substance, it follows that the respondent should have the costs thrown away by the amendment and the consequent adjournment.
In order to enable this matter to be brought back into the list fully
prepared at the earliest possible time, I direct that the parties bring

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in short minutes of orders for the future conduct of this case tomorrow morning, Friday 28 August, at 9.30 am. The directions proposed should embrace the interlocutory steps which the parties consider are

appropriate, including the filing of further amendments which may be necessary to the statement of claim in order to clarify its content, and

the filing and serving of an amended statement of defence, the exchange

of particulars as may be appopriate and the other interlocutory steps

which the parties may desire or feel is necessary.

I direct further that if interrogatories are desired, and in order to

save time, the leave of the court which is required for their administration should be fixed as part of the timetabling so that it is possible to set down for hearing at an early time any argument that

might arise on the question of whether leave should be granted.

This matter will	be listed for hearing before me the	week commencing 11
April 1988.