Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd

Case

[2008] VSC 77

19 March 2008


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

BUILDING CASES LIST

No. 6051 of 2005

DOWNER CONNECT PTY LIMITED
(ACN 057 593 503)
Plaintiff
v
McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD (ACN 002 929 017) Defendant

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JUDGE:

HARPER J

WHERE HELD:

MELBOURNE

DATE OF HEARING:

7 MARCH 2008

DATE OF JUDGMENT:

19 MARCH 2008

CASE MAY BE CITED AS:

DOWNER CONNECT PTY LIMITED v McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD

MEDIUM NEUTRAL CITATION:

[2008] VSC 77

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PRACTICE AND PROCEDURE – Application to file a further amended statement of claim – Whether proposed pleading defective.

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr M.H. Whitten Corrs Chambers Westgarth
For the Defendant Mr M.R. Scott Clayton Utz

HIS HONOUR:

  1. Litigation is sometimes conducted to judgment with barely a glance at the pleadings.  It remains generally true that good pleadings are an important, and often crucial, element in the civil justice system.  When well drawn, as they always should be, they form the touchstone by which the issues are identified and the relevance of the evidence assessed.

  1. Consistently with this, one of their primary purposes is to reveal to the opposite party how the party pleading puts its case.  On reading a well-drawn statement of claim, the defendant to whom it is directed will be able to say:  “These are the material facts that will be the subject of the plaintiff’s evidence.  They tell a coherent, comprehensible story; and, to the extent that any additional evidence is to be called that might cause me to be taken by surprise, here is that evidence outlined in the particulars.”

  1. A complaint that the pleadings do not achieve this end is often met with the response that the opposite party knows very well, from documents and perhaps other sources, what the case against it is.  This is no answer at all, at least unless the relevant documents are properly incorporated into the pleading.  It is, as a general proposition, true to say that each pleading should be sufficient in itself.  And although an element in an adversarial process, pleadings are themselves intended to be the opposite of adversarial, at least to the extent that they must, if they are to perform one of their proper functions, inform the opposite party of the case that party will have to meet at trial.

  1. But pleadings have another important audience:  the Judge or Magistrate.  In most cases, the opposite party will have the assistance of some knowledge of the factual background – some knowledge, in other words, of the facts against which the pleadings can be assessed.  The tribunal of fact will never be in that position.  The pleadings must therefore be drawn so as to allow the impartial and uninformed reader to know what the case is about.  This end cannot be achieved unless the pleadings form a coherent narrative, of material fact, with the necessary detail included as particulars.  They must be drawn with a careful eye to the evidence that will necessarily be called if the case is to be made out.  If the party pleading does not have that evidence, then the case ought not go to trial.  Indeed, it is generally true to say that it ought not to proceed beyond the point at which the party pleading appreciates, perhaps because the very act of pleading reveals it, that there is and will remain a gap in the evidence upon which the cause of action or defence is based and without which that cause of action or defence will fail.

  1. The plaintiff in this case has had some difficulty in formulating its statement of claim.  It now seeks leave to file a further amended statement of claim dated January 2008.  The defendant contends that the latest version retains so many faults that leave should not be given.

  1. The proposed further amended statement of claim alleges that the defendant was the head contractor in a major project to construct a gas pipeline in Tasmania.  The plaintiff was one of its sub-contractors.  The idea was to take advantage of the trench in which the gas pipeline was to be laid by adding to it an optical fibre telecommunications cable (sometimes referred to as a “conduit”).  That was the task which the plaintiff agreed to perform. 

  1. The proposed pleading alleges, by paragraph 4, that the agreement constituting the sub-contract was “made on or about 11 January 2002”.  This of itself is unremarkable.  But that position changes when one reads, in paragraph 6, that a term of the sub-contract provided that the plaintiff should commence the works on the date specified in “the schedule” (that is, the schedule to the sub-contract); and that that date is (according to paragraph 20) 7 January 2002.  The reader’s sense that there is something odd about this is heightened when it is seen that, by paragraph 22, the statement of claim alleges not only that the plaintiff “was delayed in carrying out the sub-contract works from 7 January 2002 to 8 February 2002” but also that “[t]he delay was caused by a wrongful or negligent act or default or delay or breach of the sub-contract” by the defendant in failing to provide access to the site.

  1. It is not uncommon for a contract for works to be made after the works commence.  That is not this case; certainly, it is not this case as pleaded.  Here, the allegation is that the contract was made after the works were due to commence, but had not in fact commenced; and the reason why they had not commenced was that the party undertaking the works was, at the very moment the contract came into existence, being wrongfully prevented by the other contracting party from doing its contractual duty.  Moreover, the party in the wrong continued to be in default thereafter.

  1. It might be said that this is not a pleading point as such.  That is strictly true.  But to the extent that the pleader should bear in mind the needs of the tribunal, coming to the pleading with no background knowledge of the facts, this pleading fails.  It presents the reader with a puzzle, but without the means of solving it.

  1. Before it reaches the allegation about failure to give access, the proposed amended statement of claim pleads certain terms of the sub-contract.  These are introduced, carelessly, by paragraph 4A, which says no more and no less than that “[t]here were terms of the sub-contract, which included, inter alia:”.  And so ends the paragraph.  Paragraphs 5-14 then set out various terms, but the reader has to guess that that part of the pleading ends at the conclusion of paragraph 14; and that paragraph 15 therefore moves on to something different.  There is no other signpost by which the reader can ascertain the point at which the pleading of the terms to which paragraph 4A refers is brought to a conclusion.

  1. Those terms, as set out in the proposed further amended statement of claim, are themselves unremarkable.  It is not necessary to mention them all, or to reproduce ipsissima verbis those to which I will refer.  The plaintiff is to execute and complete the sub-contract works subject to and in accordance with the sub-contract (clause 3.1); it shall commence and complete those works on the specified dates, subject to any extension of time (clause 7); time shall be extended for a period that is in all the circumstances fair and reasonable (a) where the plaintiff has been delayed by any of the matters set out in the head contract for which the defendant (as a party to it) may be entitled to claim an extension of time, or (b) where the plaintiff has been delayed by any wrongful or negligent act or default or delay or breach of the sub-contract by the defendant (clause 7.2);  “variation” shall mean any change to the sub-contract works as directed by the defendant (clause 14);  and all variations shall be “valued” in accordance with the schedule to the sub-contract.

  1. Clause 14 deserves further examination, if only because its over-indulgence in verbiage is replicated elsewhere in the proposed further amended statement of claim.  As pleaded in paragraph 11 of that document, clause 14.1 of the sub-contract:

… provides that for the purposes of the sub-contract, ‘”variation” shall mean any change to the sub-contract works and shall be limited to:

(a)increase, decrease or omit any part of the work under the sub-contract;

(b)       change the character or quality of any material or work;

(c)change the levels, lines, positions or dimensions of any part of the work under the sub-contract;

(d)      execute additional work;  and/or

(e)demolish or remove material or work no longer required by [the defendant] or [the head contractor].

  1. Paragraph 19A of the proposed Further Amended Statement of Claim pleads terms which are alleged to be implied by law, or alternatively implied in order to give business efficacy to the sub-contract.  I mention in passing that this is another example of careless pleading.  The alternative is mere surplusage, since it is the law that will, given the appropriate circumstances, imply a term that is necessary to give such efficacy. 

  1. As pleaded, the implied terms are that the defendant “would (a) make available sufficient of the site;  (b) provide sufficient access to the site;  (c) perform its head contract works so as to provide a sufficient open, prepared trench for [the plaintiff] to install, inter alia, the conduit;  and (d) not delay or prevent the plaintiff from performing the sub-contract works.

  1. It seems to me that the word “site” in paragraph 19A(a) and (b) should, given the nature of the work that the plaintiff’s sub-contract required it to do, be replaced by the word “trench”.  In a sense, the trench and the site are the same thing; but the former more accurately and conveniently, it seems to me, conveys that which the plaintiff intends to plead.  And it is in the interests of the defendant as well as the plaintiff that  the statement of claim be as accurate as possible.

  1. After pleading, in paragraph 20, the date of commencement as being 7 January 2002, the proposed further amended statement of claim alleges, in paragraph 21, that the works were to be completed by 27 May of that year.  I have already referred to the alleged delay from 7 January to 8 February (paragraph 22 of the proposed further amended statement of claim) and to its alleged cause:  the defendant’s failure “to provide [the plaintiff] and/or delaying access to the site”.

  1. Here is another example of over-indulgence in verbiage, as well as carelessness.  In the relevant context - that is, the plaintiff not having been given access to the site until 8 February – there can be no difference between failing to provide access on the one hand, and delaying access on the other.  A further criticism is that the particulars to paragraph 22 refer to an instruction issued to the plaintiff “that on-site work would be delayed until 20 January”.  The relevance of this to 8 February, or anything else, is not explained.  Irrelevant facts should not be pleaded.  If the site, or the trench, was not made available to, or ready for, the plaintiff, until the later date of 8 February, then that is the plaintiff’s case; and a reference to the earlier date of 20 January is pointless. 

  1. Then, following a welter of what seems to me to be unnecessary particularity (because, at best, it is mere evidence, and of very little - if any - relevance at that) the particulars state that the defendant “did not allow [the plaintiff] access to the site until 8 February 2002”.  The consequence of denial of access is hardly surprising; but the particulars proceed (as is appropriate) to state it nevertheless: “This delayed [the plaintiff’s] commencement of conduit lay until 8 February”.  The pleading should add, but has not, a reference to the term of the sub-contract said to have been breached.  Presumably, this was the implied term pleaded in paragraph 19A(c).

  1. The plaintiff next complains (paragraph 23 of the further amended statement of claim) that, in breach of clause 7.2 of the sub-contract, the defendant failed to extend the date for practical completion.  The defendant attacks this allegation on the basis that no attempt has been made to draw any connection between delay and any necessary extension.  I do not accept this criticism.  The connection necessarily follows.  If the plaintiff proves that, for a period of some 34 days, it was unable to gain access to the trench into which it was to place the optical fibre telecommunications cable, then it seems to me that the evidentiary burden shifts to the defendant to prove that no extension of time was warranted.

  1. There follows an allegation of further delay.  It is pleaded in paragraph 24 of the proposed further amended statement of claim.  It is there asserted that the three days between 8 February 2002 and the following 10 February that year were lost as the result of an error made by the defendant “in lowering its pipeline”.  This in turn caused the plaintiff “delay to the commencement of sub-contract works until 10 February 2002”.

  1. Again, there is no reference to the term alleged to have been breached.  As with the earlier delay, the term relied upon is doubtless that pleaded in paragraph 19A(c) of the proposed further amended statement of claim.  But the proposed pleading failed to do what a good pleading should;  it asserts that the delay “was caused by a wrongful or negligent act of default or delay or breach of the sub-contract by” the defendant (my emphasis).

  1. The plaintiff should make up its mind – the cause relied upon should be narrowed down to one, and (if I understand the case correctly) identified as delay by the defendant in enabling access to the trench.  The term said to have been breached should likewise be identified.  It would then be seen that, properly pleaded, the entire initial delay began on 7 January (if, on consideration of the apparent oddity of that date, the plaintiff nevertheless wishes to continue to plead it) and ended on 10 February – and was caused by the defendant’s failure, in breach of the term pleaded in paragraph 19A(c), to give access to the trench.

  1. The inappropriately “catch all” nature of the proposed pleading is exemplified in paragraph 25 of the proposed further amended statement of claim.  It alleges that “by reason of the site access delay and the [defendant’s] pipeline delay [the defendant] breached the sub-contract” by breaching every one of the implied terms pleaded in paragraph 19A.  The result, it is said, was that the plaintiff was unable to commence its work on 7 January 2002 or to complete it by 27 May that year.

  1. The pleading should be more discriminating.  If the implied terms merely amount to four different ways of saying the same thing, then saying that thing once is sufficient.  If they really do mean different things, then the breaches should be ascribed to that term which really was breached, and not to those which really were not.

  1. Paragraph 25A of the proposed further amended statement of claim pleads that the plaintiff suffered loss and damage as a result of the defendant’s breaches of the implied terms.  These are, in that pleading, called “delay damages”.  Particulars are given by reference to paragraphs 22 and 24;  but these contain nothing of relevance.  Further particulars are said to be found under paragraph 28(b).  Here, a total of $45,907.99 is claimed.  It is said to consist, in part, of a daily rate of $2,074.  This  represents the plaintiff’s average daily rate for administration.  This is multiplied by 19.  Given that 34 days, not 19, are claimed to have been lost between 7 January and 10 February, this to me seems inexplicable; but perhaps I have missed something.  Similarly inexplicable, given the earlier reference to 10 February, is the reference, in the particulars under paragraph 28, to 9 February.

  1. When 2,074 is multiplied by 19, the result is a claim for $39,406.  To this the plaintiff adds $6,501.99, being 16.5% of the earlier figure.  This is said to represent the “head office overhead and margin”.  It also represents the other portion of the total claimed by way of delay damages ($45,907.99).

  1. At trial, the plaintiff will have to prove that the delay between the relevant dates resulted in an actual loss of the amount claimed.  Since it does not follow that that loss is properly, if partially, quantified by taking the average daily rate for the plaintiff’s administration, the causal connection will need to be the subject of evidence.  If that evidence is not to take the defendant by surprise, then it should be forewarned by means of appropriate particulars in the proposed pleading.  The same is of course true of the additional claim for $6,501.99.

  1. To the extent (but to the extent only) that the plaintiff cannot now claim delay damages without first making such a claim before litigation, paragraph 26 is necessary.  It simply alleges that the plaintiff submitted claims for an extension of time and for delay damages to the defendant, and gives particulars of those submissions.  Paragraph 27 of the proposed further amended statement of claim then alleges that the defendant has failed to extend the time or to pay damages, and that the failure to extend time is in breach of clause 7.2 of the sub-contract.  Then, by paragraph 28, the plaintiff claims an extension of time of 34 days and delay damages totalling $45,907.

  1. Paragraphs 28A-28G merely replead in a different format the cause of action pleaded in the earlier paragraphs of the proposed further amended statement of claim.  These additional paragraphs are therefore unnecessary.  They are, in substance, merely repetitive (although I note that they escape at least one criticism made of their earlier compatriots: they make the direct allegation, without reference to 8 February, that the plaintiff was not allowed access to the site until 10 February) .

  1. The next segment of the proposed further amended statement of claim deals with alleged variations that, the plaintiff contends, required it to perform work out of sequence.  The segment opens with paragraph 29, the purpose of which I presently fail to understand.  That paragraph simply pleads that the plaintiff was required to carry out the sub-contract works in four “spreads proceeding in parallel”.  Then, in paragraph 30, it is pleaded that, during the execution of the works by the plaintiff, the defendant issued numerous directions - with which the plaintiff complied - to effect the works out of sequence.  This caused variations (referred to in the proposed further amended statement of claim as “out of sequence directions”) to the works.

  1. Particulars are given.  These ought to set out the sequence as prescribed by the sub-contract, and then enable the reader to compare that sequence with the sequence as varied.  The particulars do not even attempt that task.  A reference in the particulars to documents recording the relevant verbal instructions does not meet the requirements of proper pleading.

  1. Nor does the allegation, in paragraph 31, that the value of the “out of sequence variations” – the reader will notice the difference between that phrase and “out of sequence directions” – was an additional $248,360.  How that sum, or any part of it, is linked to the out of sequence directions/variations is not apparent.  It should be.  It is a defect in the pleading that it is not.

  1. I assume that the plaintiff’s case is that, if it was to operate at maximum efficiency, particular portions of its work had to be done in a particular sequence.  Directions given by the defendant, with which the plaintiff complied, had the effect that this sequence could not be followed.  The consequential inefficiency in performing the plaintiff’s work led in turn to that work not proceeding as quickly as, objectively assessed, it otherwise would.  Additional cost, quantified as will be shown in the redrawn statement of claim, was thereby incurred.

  1. If that is the plaintiff’s case, it should be pleaded in this or some similar way.  The plaintiff should by now have turned its mind to how it intends to prove this part of its claim.  It will have to give evidence of each relevant direction.  It will then have to show how that direction resulted in the sequence of work being altered.  Next, it must prove that the alteration operated to the detriment of the efficiency with which the job as a whole was performed.  Comparisons will have to be drawn between what might have been (as objectively assessed) and what was the actuality.  The pleading must set out the material facts, with additional particulars where necessary to avoid surprise.

  1. The particulars under paragraph 31 are, one would suppose, intended to make apparent the calculation by which the sum of $248,360 is reached.  It seems to me that they have the opposite effect.  The calculation set out in the table on p.18 of the proposed further amended statement of claim begins with an unexplained reference to 31 December, and ends with an unexplained reference to 7 April.  In between, it asserts that the plaintiff had a targeted output of 200 kilometres of conduit – presumably being laid between 31 December and 7 April – but only achieved 81.66 kilometres.  The actual cost to the plaintiff of this achievement was $419,740.  This, it seems, should have been the actual cost of putting down 200 kilometres of conduit.  81.66 is 59.17% of 200.  The plaintiff therefore wasted 59.17% of $419,740, i.e.$248,360.

  1. If the plaintiff is to succeed on this aspect of its claim, it must call evidence to prove both the out of sequence directions and how it was that they resulted in the under-achievement to which the particulars refer.  The pleading should also refer, appropriately, to that evidence.  At present, in my opinion, it does not.  And the reference to a “target” is almost certainly inapt.  The internal, subjective, workings of the mind of the plaintiff are not the objective facts which the plaintiff must prove.

  1. Paragraph 32 of the proposed pleading alleges that the plaintiff submitted claims for the “out of sequence variations”.  According to the particulars, one of these – submitted on 21 November 2002 – claimed the sum referred to in paragraph 31, namely $248,360.  Then, by paragraph 33, it is pleaded that the defendant breached the sub-contract by rejecting or failing properly to value and assess the “out of sequence variations”.  It is also pleaded, not surprisingly, that the defendant has failed to pay for them.

  1. The proposed further amended statement of claim then turns to what it calls in paragraph 35 “acceleration directions”.  These, it is there alleged, were issued by he defendant to the plaintiff during execution and completion of the sub-contract works.  Their intended effect was to accelerate those works.  As a result, the works were varied:  paragraph 35A.  That paragraph refers, in what can I think fairly be described as parrot fashion, to the definition of the expression “variations” set out in paragraph 11 of the proposed further amended statement of claim.  But this is merely more wasted verbiage.  It does not give the reader any conception of the actual nature of the variations.  Nor do the particulars.  Yet, if this aspect of the claim is to succeed, evidence must be called to enable the tribunal of fact to compare the work as originally contracted with the work as varied.  That being so, the relevant information must be included in the pleading if it is not to take the defendant by surprise at trial.

  1. Paragraph 36 of the proposed pleading alleges that the value of the “acceleration variations” “was an additional $252,564”.  This sum, it is alleged, was calculated in accordance with sub-clause 14.5 of the sub-contract.  Otherwise, the reader is only told that the additional cost for supervision amounted to $44,406, the increased equipment costs to $33,815 and that actual costs exceeded expected costs by $174,343.51 (although the table in which that figure appears seems to me to include two incorrect totals: the total of the “actual costs” is, as I follow the table, $325,356.76, not $319,206; and that of the “expected costs” is $151,013.25, not $148,707).

  1. At trial, the Court will not be concerned with “expected costs”.  If the plaintiff is to succeed in this part of its claim, it must prove that, in the absence of any of the variations in question, it would have been entitled to be paid either the amount that the contract allowed, or (given the terms of the sub-contract) the amount that represented the fair cost of the (unvaried) works.  It will probably then be necessary for the plaintiff then to prove that the variations necessarily resulted in a specific increase in that amount.  It must prove the size of the increase.  The difference will then be the amount recovered.

  1. This being what the plaintiff has to prove at trial, it is also that which the plaintiff must plead.  It has not done so.  Instead, it has put forward “expected” costs and compared them with “actual” costs.  But the defendant cannot be required to pay damages calculated simply upon the difference between what was expected and the expense the plaintiff actually incurred.  Each head may be quite unreasonable.  And the defendant, if at fault, is entitled to have the damages it must pay assessed only against that which is reasonable, or that for which the sub-contract provides.

  1. The plaintiff’s next claim under the heading “variations” is for what it describes as the costs of “omitted sub-contract works”.  It pleads, in paragraph 40 of the proposed further amended statement of claim that “[d]uring execution and completion of the sub-contract works” by the plaintiff, the defendant “approved the omission of certain sub-contract works”.  These, according to paragraph 40A, varied those works by decreasing them.  This in turn had the effect that the plaintiff “was entitled to be paid for overheads and profits it would have earned on the value of the said omitted works”:  paragraph 40B.  The reasonable value of the “lost overhead and margin” was $14,881.15:  paragraph 40C.

  1. In the particulars under paragraph 40C, the proposed further amended statement of claim sets out the calculation of the sum claimed.  It is there said that the defendant “took over [i.e. assumed responsibility for] 44.66 kilometres of conduit work” with a value of $89,320, calculated by allowing $2,000 per kilometre.  The particulars also allege that “[t]he work also included on average the installation of 1.4 tubs per kilometre.”  Sixty-three tubs were involved, and each cost $250:  a total of $15,750.  The overhead and margin foregone on the “total value of the work taken over by [the defendant]” is alleged by the particulars under paragraph 40C to be $14,881.

  1. The pleading at this point does not reveal how the sum of $2,000 per kilometre is arrived at.  The same may be said about the claim that the plaintiff is entitled to charge 16.5% by way of overhead and margin.  At trial, the plaintiff, if it is to succeed in this portion of its claim, must prove that $2,000 accurately represents the cost per kilometre of effecting the work it was no longer required to do, and that the quantum of its calculation of overhead and margin can be justified.  Otherwise, this portion of the proposed further amended statement of claim appears to me to comply with the pleading rules.  Whether this part of the claim ultimately succeeds is of course another matter.

  1. After an allegation, in paragraph 42 of the proposed further amended statement of claim, that the defendant has “rejected and/or failed to properly value and assess the omitted works and failed to pay [the plaintiff] in accordance with the sub-contract”, the pleading turns to a new heading: “Prolongation Costs”.  Here, paragraph 44 pleads that the date for practical completion as provided in the sub-contract was 27 May 2002 but (and this is pleaded in paragraph 44A) the date of completion of the plaintiff’s “reduced scope of sub-contract works … was 9 August 2002”.

  1. One can be overly critical;  but it is fair to say that this is not pleading at its best.  Good pleadings avoid the juxtaposition of two apparently contradictory propositions.  If the contract was to be completed by 27 May, there is something paradoxical in then asserting that, by reason of the reduced scope of the works, the completion date blew out to 9 August 2002.  It is likewise paradoxical to assert, as does paragraph 44B, that “in the premises” (that is, as a consequence) the plaintiff “was required to continue working on site and was prolonged in the completion of its works from 27 May 2002 to and including 9 August 2002”.  The particulars under paragraph 44B attribute the prolonged works to the defendant’s “failure to provide an updated project schedule or forward plan” - and wet weather.  As appears from paragraph 45, both were the responsibility of the defendant.  As I read that paragraph, the failure to provide an updated project schedule or forward plan was somehow a circumstance or occurrence for which the defendant might be entitled to claim an extension of time pursuant to the sub-contract; and the “wrongful or negligent acts of default or delays or breaches of the sub-contract” by the defendant had the consequence that the defendant was not able to make available to the plaintiff sufficient of the trench to complete the plaintiff’s works on time.  By having to continue work beyond 27 May, the plaintiff entered into a period of known wet weather.  Again, as asserted by paragraph 46, the plaintiff alleges that a relevant notice was forwarded to the defendant in a timely way, and at all times the plaintiff used its best endeavours to avoid delay.  For those reasons (as paragraph 47A asserts) the plaintiff was (as it claims) entitled to an extension of time of 73 days.  This represents the number of days between 27 May and 9 August.

  1. In my opinion, the claim for prolongation costs is insufficiently pleaded.  Apart from the matters to which I have already referred, there is no attempt to link the wet weather with particular dates on which the plaintiff was unable to work, or able to work only at a reduced level of efficiency.  There is likewise no attempt to link the failure to plan with specific periods of delay.  The pleading, in short, should enable the reader to ascertain precisely how it was that the circumstances upon which the plaintiff relies gave rise to the particular period of delay (73 days).  There must, too, be made plain in the pleading the link between the delay and the defendant’s responsibility for it. 

  1. The amount claimed by way of loss and damage as a result of the prolongation is set out in paragraph 47B.  As before, the methodology is to assert the actual cost of labour and equipment, to add to that an amount representing overheads and margin, and to deduct from it the amount which the plaintiff recovered.  The difference is $615,186.55, an amount which (according to paragraph 48) was on 21 November 2002 put to the defendant by the plaintiff.  It is then pleaded, in paragraphs 49 and 50, that the defendant has in breach of the sub-contract failed to respond appropriately - by reason of which the plaintiff claims an extension of time of 73 days and the costs of prolongation in the sum to which I have just referred.

  1. The plaintiff’s final head of claim relates to a separate contract with a third party.  Paragraph 53 of the proposed further amended statement of claim asserts that, as a consequence of the defendant’s “delays and other breaches” the plaintiff “was delayed in carrying out installation of fibre optic works under a separate contract with a third party (fibre optic delay).”  In the particulars to paragraph 53, it is alleged that the defendant’s delays resulted in the plaintiff being unable to fulfil its obligations under the separate contract, at least unless it injected “extra resources” and expended “extra costs to ensure that it met the deadlines under its separate contract”.  It appears, from paragraph 54, that the additional resources and costs were in the provision of additional site vehicles and labour and site supervision.  But, in my opinion, the pleading does not tie in that aspect of the claim with the delay that is said to have been its cause.  It must be stressed again that the pleading must include (in a way that conforms with logic, common sense and industry practice, as well as – of course – the law) all the material facts which, unless they are pleaded, will take the defendant by surprise at trial, or otherwise result in the defendant being unable to ascertain before trial the case it has to meet.

  1. In my opinion, the proposed further amended statement of claim must be re-cast.  This will require that it be repleaded in accordance with these reasons.  I will give the plaintiff leave to do so, and discuss the terms of that leave with counsel.

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