Environment East Gippsland Inc v VicForests (Ruling No 2)

[2010] VSC 53

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 8547 of 2009

ENVIRONMENT EAST GIPPSLAND INC	Plaintiff
v
VICFORESTS	Defendant

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 February 2010
DATE OF RULING:	25 February 2010
CASE MAY BE CITED AS:	Environment East Gippsland Inc v VicForests (Ruling No 2)
MEDIUM NEUTRAL CITATION:	[2010] VSC 53	Revised 4 March 2010

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PRACTICE and PROCEDURE – Amendment of Statement of Claim – Best evidence of matters involved in underlying dispute – Directions to minimise prejudice to defendant – Costs thrown away.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms D Mortimer SC with Mr R Niall	Bleyer Lawyers Pty Ltd
For the Defendant	Mr I Waller SC with Mr H Redd	HWL Ebsworth Lawyers, acting as agents for Komesaroff Legal Pty Ltd

HIS HONOUR:

1. The background to this proceeding is stated in the decision of his Honour Justice J Forrest made last year, and granting injunctive relief to the plaintiff.  The injunction restrains logging and associated works within coupes located at Brown Mountain in East Gippsland.  The underlying basis on which the plaintiff seeks relief in the proceeding, and upon which it sought and obtained injunctions is that the coupes in issue have such conservation significance that logging of them would be unlawful, having regard to applicable legislative and governmental controls which seek to protect such significance. 

1. The plaintiff by summons dated 23 February 2010 now seeks leave to amend its statement of claim in accordance with a form of amendment appended to the summons.  That application is resisted by the defendant insofar as the amendments raise allegations of the presence of the three animal species within the relevant area, which have not previously formed the basis of the plaintiff's claim.  The matter is fixed for trial at Sale commencing on Monday next, and has been the subject of a framework of pre-trial directions intended to ensure that it would be ready to proceed at that date, and to ensure that the defendant was accorded procedural fairness.  The defendant wishes the matter to proceed next Monday whether or not the amendments are permitted, because any delay will result in the continuation of the injunction which it submits is causing it continuing economic loss  and prejudice.  The plaintiff contends that the amendments can be made at this very late stage without the necessity of any adjournment of the trial, and that the trial can proceed with adequate procedural fairness from the defendant's point of view.  I accept the relevant principles relating to the application were restated by the High Court in the case of Aon Risk Services Australia Limited v ANU.[1] 

   [1](2009) 239 CLR 175.

1. For present purposes it is sufficient to repeat what was said in the judgment of the plurality:

An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation.  There is no such entitlement.  All matters relevant to the exercise of the power to permit amendment should be weighed.  The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. [2]

[2]Ibid, [111].

1. The underlying objective of the court must of course be to achieve a just resolution of the dispute between the parties.  That notion in a case such as the present extends to the objective insofar as it is reasonably possible of ensuring that justice is seen to be done with respect to the real matters in dispute between the parties.  In the present, case I accept that the amendments in issue arise out of circumstances to which the plaintiff was alerted by advice given to the plaintiff by a series of expert witnesses who have carried out ongoing site investigations for the purposes of preparing reports for the trial.  If the amendments are refused, and this evidence is excluded, the evidence will not be the best evidence available as at the date of trial of the conservation significance of the land. 

1. In my view, such a refusal would not only on the face of it prejudice the plaintiff's case, but also necessarily detract from the credibility of the evidentiary basis on which the Court proceeds to determine the matter.  And I am further of the view that this issue is of particular significance in the present case because it raises issues of the public interest both from the point of view of the position of the plaintiff and the defendant. 

1. Accordingly the amendments should be allowed in the absence of prejudice to the defendant, which can be said to outweigh the prima facie desirability of the amendment.  The notion of prejudice is to be approached broadly as the decision of Aon makes clear.  In the present case, it is first submitted on behalf of the defendant that there has been delay on the part of the plaintiff which should preclude the granting of any indulgence to it.  In particular, reference is made to the identification of a new species of crayfish in a report dated 7 December 2009 prepared by Dr McCormack. 

1. The substance of this report was not the subject of advice to the defendant's solicitor until 18 February this year.  I accept the delay was regrettable and contrary to the intention and indeed the spirit of the directions made previously by the court in order to put the case in a proper position for trial.  Nevertheless, the relevant expert retained by the defendant has now had the opportunity to consider and respond to the report in issue, and I am not persuaded that delay with respect to this aspect of the matter justifies refusal of the amendment. 

1. Next it is submitted the defendant will suffer significant procedural prejudice if the amendments are allowed.  It is not submitted that repleading the defence will occasion undue difficulty.  And on the face of it, the probability is that the defence will be repleaded in parallel terms to the pleas which have previously been made in relation to other species which the plaintiff alleges are present in the relevant area. 

1. The problem from the defendant's point of view is in respect of obtaining expert advice responsive to the material now put forward in respect of the alleged presence of bird and frog species only recently identified as relevant on behalf of the plaintiff.  This difficulty is exacerbated due to personal circumstances affecting the expert whom the defendant has retained in this matter, and proposes to call to give evidence.  

1. Although the question is, I accept, finely balanced, I have come to the view that the procedural prejudice in issue can be significantly ameliorated and it may reasonably be hoped avoided, if an appropriate basket of directions is made by the Court.  First, I would not fix a time for the filing and service of an amended defence, but simply direct that such an amended defence be filed and served as soon as is reasonably practicable.

1. Secondly, I would direct that save with the consent of the defendant, the plaintiff call all evidence other than that relating to the matters of fact alleged in the amendments prior to calling evidence concerning such matters.  Thirdly, I would direct that Professor Ferguson be at liberty to respond to evidence relating to such matters by viva voce evidence with no written notice of the substance of such response.  And fourthly, I would specifically direct that the defendant be at liberty to apply for further directions relating to the evidence concerning such matters.

1. It seems to me that if these directions are made, then having regard to the pleadings as a whole as they currently stand and the expert evidence foreshadowed in the documents that have been filed with the Court, a fair trial should be reasonably possible.  I should further record that during the course of argument I indicated to counsel for the defendant that the court would adopt a flexible approach to the giving of Professor Ferguson's evidence if that should become necessary.

1. In addition to the procedural concerns which the defendant has expressed, the defendant also submitted that it could not be satisfactorily compensated by an order for costs thrown away in respect of the consequences of any amendment.  It was submitted that there was a real prospect that an order for costs would not be able to be met by the plaintiff, and reference was made to the debate in the practice court with respect to this aspect of the matter at the time of the hearing relating to injunctive relief.

1. I have come to the view that such prejudice will be minimised if I fix an amount in respect of such costs and order that it be paid within a relatively short time.  The parties have now agreed that it would be appropriate to order that the plaintiff pay the defendant's costs thrown away by reason of the amendment of the statement of claim, fixed in the amount of $12,000, and that that amount be paid by 5 March 2010.

1. Finally I should add for the sake of completeness that it was submitted on behalf of the defendant that certain amendments proposed with respect to the statement of claim by way of deletion of factual allegations do not go far enough.  I am not persuaded that the pleading is on the face of it materially inadequate in relation to the matters raised, for the reasons I discussed with counsel during argument.  It seems to me that the underlying issue is one which will have to be resolved at trial and in the light of the evidence as it emerges during the course of the hearing.

1. Accordingly, I propose to make orders generally in accordance with the oral reasons I have just given.  First, that the plaintiff have leave to file and serve an amended statement of claim generally in accordance with the form appended to the summons dated 23 February 2010.  I say generally because the proposed paragraph 80D needs to be denoted as such in the amended statement of claim. 

1. Secondly, that the defendant file and serve an amended defence to the amended statement of claim as soon as is reasonably practicable.  Thirdly, save with the consent of the defendant, the plaintiff call all evidence other than that relating to matters of fact alleged in the amendments permitted to the statement of claim prior to calling evidence concerning such matters.  Fourthly, that Professor Ferguson be at liberty to respond to evidence relating to such matters by viva voce evidence with no written notice of the substance of such response to the plaintiff. 

1. Fifthly, the defendant be at liberty to apply for further directions with respect to evidence relating to such matters.  Sixthly, that the plaintiff pay the defendant's costs thrown away by reason of the amendments, including the costs of this application fixed at $12,000, on or before 5 March 2010.