Direct Engineering Services Pty Ltd v A Goninan and Co Ltd
[2003] WASC 236
DIRECT ENGINEERING SERVICES PTY LTD -v- A GONINAN & CO LTD [2003] WASC 236
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 236 | |
| Case No: | CIV:1098/2001 | 12 NOVEMBER 2003 | |
| Coram: | MASTER SANDERSON | 24/11/03 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Amendment allowed Discovery ordered | ||
| B | |||
| PDF Version |
| Parties: | DIRECT ENGINEERING SERVICES PTY LTD (ACN 008 700 178) A GONINAN & CO LTD (ACN 000 003 136) |
Catchwords: | Practice and procedure Application to amend defence Application for specific discovery Turns on own facts |
Legislation: | Rules of the Supreme Court 1971, O 26 r 8(2) |
Case References: | Taylor v Santos Ltd (1988) 71 SASR 434 Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 Theodore v Australian Postal Commission [1988] VR 272 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
A GONINAN & CO LTD (ACN 000 003 136)
Defendant
Catchwords:
Practice and procedure - Application to amend defence - Application for specific discovery - Turns on own facts
Legislation:
Rules of the Supreme Court 1971, O 26 r 8(2)
Result:
Amendment allowed
Discovery ordered
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr L F A Nixon
Defendant : Mr P K Walton
Solicitors:
Plaintiff : Clayton Utz
Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Taylor v Santos Ltd (1988) 71 SASR 434
Case(s) also cited:
Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627
Theodore v Australian Postal Commission [1988] VR 272
(Page 3)
1 MASTER SANDERSON: This is the defendant's application for leave to amend in terms of a further minute of proposed reamended defence and counterclaim dated 3 November 2003 ("the minute"). The defendant also seeks discovery of a particular document. The pleading dispute relates to par 26 to 38 of the minute. Before detailing these paragraphs I should say something briefly of the dispute between the parties.
2 On or around 18 August 1998 the plaintiff entered into a written contract, referred to in the statement of claim (par 4) as "the Head Contract" with Hamersley Iron Pty Ltd ("Hamersley"), pursuant to which the plaintiff agreed to replace an air-conditioning and mechanical ventilation system at Hamersley's railway workshop in Dampier. As part of the works the plaintiff was required to remove a section of air-conditioning duct, install a new stairway and fit handrails in certain locations. This work is referred to in the statement of claim as "the Heavy Steel Work" (par 6(b)). On or about 5 October 1998 the plaintiff contracted the defendant to carry out the Heavy Steel Work. As part of the contract between the plaintiff and the defendant, the defendant agreed to indemnify the plaintiff against all losses for damage to any third party's property resulting from the defendant's negligence. On or about 10 October 1998, while servants or agents of the defendant were carrying out the Heavy Steel Work, a fire broke out which caused damage to Hamersley's property. Pursuant to the terms of the Head Contract, the plaintiff was required to indemnify Hamersley against any loss or damage caused while the works were being carried out. Hamersley made a claim against the plaintiff and the plaintiff met that claim. The plaintiff is now seeking to recover from the defendant the amount that it paid to Hamersley.
3 The defendant seeks to answer the plaintiff's claim in a number of different ways. Relevantly, for the purposes of this application, it is pleaded that it was an express term of the Head Contract that the plaintiff would procure and maintain a policy of public liability and property damage insurance covering all claims and liabilities in respect of loss or damage suffered by Hamersley during the course of the works. The plaintiff says that under the terms of the Head Contract, and in particular, subcl 11(d)(v), the policy of insurance the plaintiff was obliged to obtain and maintain in favour of Hamersley, also covered the liability of subcontractors in the position of the defendant. This is pleaded in the following way in the minute (par 30):
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- "On a proper construction of sub-clause 11(d)(v) the Head Contract, having regard to the subject matter of the Head Contract, the Head Contract as a whole and the circumstances surrounding the making of the Head Contract, the effect of sub-clause 11(d)(v) of the Head Contract was to require that sub-contractors were to have the benefit of the insurance policy to be obtained by the Plaintiff."
4 In my view, it is open to question, looking at the structure of that paragraph, whether it is a proper plea. The proper construction of subcl 11(d)(v) of the Head Contract either requires the plaintiff to arrange a policy of insurance which benefits the subcontractors or it does not. What is raised is a matter of contractual interpretation. Quite what the circumstances surrounding the making of the Head Contract and the subject matter of the Head Contract have to do with the interpretation of the clause is by no means clear. If it is suggested that the subclause is ambiguous and reference needs to be made to other matters, then that should be pleaded and the surrounding circumstances relied upon should be particularised. Such a plea might be put in the alternative, but it should be put. The defendant may need to give that matter further consideration.
5 Anyway, the plaintiff does not complain about the way in which par 30 is pleaded. Of course, the plaintiff does reject the defendant's interpretation of the pleaded subclause but that is not a matter which can be resolved on a pleading summons. It is matters which follow par 30 with which the plaintiff takes issue.
6 By par 31 it is pleaded that the plaintiff obtained a policy of insurance as required by the Head Contract. The particulars to par 31 refer to a particular insurer, the date of the policy and the policy number. It is also said that further particulars of the policy will be provided "following discovery and interrogation". Quite what that means is not clear.
7 It is appropriate to pause at this point to make two observations. First, under O 26 r 8(2) of the Rules of the Supreme Court 1971, if the plaintiff were to give the defendant a notice, the defendant would be required to produce the policy of insurance. That is because, to use the words of Seaman: Civil Procedure Western Australia, par 26.8.1:
"The purpose of the rule in relation to a document referred to in a pleading is to put the opponent in the same position or
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- advantage as if the document had been fully set out in the pleading."
8 Secondly, after pleading the requirement in the Head Contract that the plaintiff obtain the policy of insurance to cover the liability of its subcontractors, the defendant had two options. It could have pleaded that the plaintiff did not obtain the policy as it was required to do under the Head Contract. In such circumstances the defendant might be absolved from liability to the plaintiff. The defendant did not follow that course. It pleads that it was covered by the policy of insurance.
9 The plaintiff's main complaint really relates to par 32, 33 and 34. These paragraphs read as follows:
"32. It was an express term of the policy that the persons or entities insured pursuant thereto included any person or entity to whom the Plaintiff was obliged in writing to provide insurance such as was afforded by the policy.
33. By reason of the facts pleaded in paragraphs 27 and 30 above, the Defendant was at all material times a person to whom the Plaintiff was obliged in writing to provide insurance such as was afforded by the policy.
34. By reason of the facts pleaded in paragraphs 27, 30, 33 and 34 above, the Defendant is and was at all material times a person to whom the full extent of the insurance cover provided by the policy extends and is entitled to enforce the policy for its own benefit."
10 The objection raised by the plaintiff as set out in par 1 of counsel's written submissions is as follows:
"In paragraphs 26 to 38 of the Minute, the defendant attempts to plead a defence of circuity based on the allegation that the defendant is insured under the same policy as that pursuant to which a portion of the plaintiff's claim is being maintained by its insurer. However, the defendant has not pleaded any terms of the policy, let alone any which demonstrate that the defendant is insured under it, in respect of the same loss suffered by the plaintiff. Consequently, the defence of circuity is not made out on the pleading, and paragraphs 26 to 38 of the Minute should be disallowed."
(Page 6)
11 In my view, this objection is answered by the terms of par 33 and 34 of the minute. If it be the case that the defendant was a party to whom the plaintiff was obliged to provide insurance and the policy did provide exactly the same cover to the defendant as to the plaintiff, then the defence of circuity may be made out. There is no point in having the defendant refer to particular clauses in the underwriting agreement. The issue is whether the insurance policy covered the plaintiff. If it did, and it provided identical cover for the defendant, then that is the answer to the plaintiff's claim. In my view there is no substance to the plaintiff's objection to the pleading.
12 If that was the end of the matter there would be no difficulty. But there is a problem. The defendant does not have a copy of the insurance policy. It has asked the plaintiff to provide it with a copy of the policy but the plaintiff has not done so. The plaintiff has provided a copy of parts of the policy and this, it says, is all it has in its possession. This is a rather curious position and how it arises is explained in the affidavit of Ian John Cunningham ("Mr Cunningham"), sworn 16 May 2002 and filed on behalf of the plaintiff.
13 Mr Cunningham is employed by the plaintiff as its operations manager. He says that as at October 1998 when the fire occurred, the plaintiff was a subsidiary of a United States corporation, United Technologies Corporation. On 1 August 2001 the plaintiff ceased being a subsidiary of United Technologies and was sold to the Hastie Group of companies. It is implied, but not stated, that the policy is still in the possession of United Technologies. The plaintiff maintains that it is unable to obtain a copy of the policy document.
14 I am bound to say that I have reservations about a pleading which refers to a document which is not in the possession of counsel who is drawing the pleading. Order 26A provides a mechanism by which a party can obtain discovery of a particular document before drawing a pleading. I appreciate that in this case counsel for the defendant takes the view that the copy of part of the document which has been disclosed by the plaintiff, together with other evidence, justifies the plea found in the minute. That may well be right. But there is the practical difficulty of what happens at trial. At some stage a copy of the policy will have to be produced.
15 In the end, this difficulty calls for a practical solution. It is clear that the policy of insurance exists and it is equally clear that it is reasonable to assume that the policy, by its terms, applies as alleged by
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- the defendant. In saying this I am not purporting to draw any conclusion on the facts. All I am suggesting is that the plea is reasonable. That being so, I think that leave to amend in terms of the minute ought be granted. I will make orders accordingly.
16 I am also of the view that orders ought be made requiring the plaintiff to give discovery of the policy of insurance. I accept that the plaintiff does not have in its possession a copy of the full policy. There is the uncontested evidence of Mr Cunningham to that effect. I also accept that the policy may be in the possession of United Technologies and the plaintiff has no right to demand from United Technologies a copy of the policy. But the fact is that the plaintiff is a beneficiary under the policy of insurance. The underwriter has made payment to Hamersley to cover the plaintiff's liability. That being so, it is difficult to see why the plaintiff should not be able to obtain a copy of the policy of insurance from the underwriter. If it is unable to do so, it should explain what inquiries have been made and what response has been received. On the face of it at least, it is difficult to see why the plaintiff as an insured under a policy, would not be entitled to a copy of the document. To paraphrase the Full Court in Taylor v Santos Ltd (1988) 71 SASR 434 at 439, the plaintiff's relationship to the insurer would surely mean that it has an immediate present right and ability to inspect the policy of insurance. If that be so, it should provide discovery of that document.
17 I will hear the parties as to the precise form of orders and as to costs.
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