Findex Group Limited v McKay (No 3)
[2023] ACTSC 108
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | Findex Group Limited v McKay (No 3) | ||
| Citation: | [2023] ACTSC 108 | ||
| Hearing Date: | 11 May 2023 | ||
| Decision Date: | 12 May 2023 | ||
| Before: | McCallum CJ | ||
| Decision: |
|
dismissed with costs.
(2) The application in proceeding dated 16 February 2023 seeking leave to file a further amended statement of claim is dismissed with costs. (3) By 2 June 2023, the plaintiffs are to file and serve a further amended statement of claim limited to:
(i) In place of struck out paragraph 110, full and proper pleadings and particulars linking the facts
pleaded elsewhere in the further amended
statement of claim to each cause of action said to
give rise to damages on behalf of each specific
plaintiff;
(ii) Providing full and precise particulars of the losses
claimed by each specific plaintiff for each cause of
action (which may be in the alternative); and
(iii) Updating the details of the natural person plaintiffs,
insofar as such updated details are relevant to the
claim.
(4) That the defendant by 9 June 2023 notify the court and the plaintiffs whether he objects to the proposed amended pleading and if so particulars of the objections. (5) Tentatively list the matter on 13 June 2023 at 9:30am before McCallum CJ.
Catchwords: | CIVIL PROCEDURE – INTERLOCUTORY APPLICATION – Application to vary reasons – whether it is in the interests of justice to vary reasons for making an interlocutory decision – whether the reasons contained incorrect assumptions of fact – where the |
| interests of justice include the finality of litigation and the objectives of case management | |
| Legislation Cited: | Courts Procedures Act 2004 (ACT) s 5A Court Procedures Rules 2006 (ACT) |
Cases Cited: | Autodesk Inc v Dyason (No 2) [1993] HCA 93; 176 CLR 300 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 Findex Group Limited v McKay [2022] ACTSC 192 |
| General Steel Industries Inc v Commissioner for Railways (NSW) | |
| [1964] HCA 69; 112 CLR 125 | |
| Liu v The Age Company Limited [2016] NSWCA 115; 92 NSWLR 679 | |
| McKay v Findex Group Limited; Findex Group Limited v McKay | |
| [2023] ACTSC 58 Notaras v St George Bank Ltd [2005] ACTSC 5; 157 ACTLR 1 | |
| Parties: | Findex Group Limited (First Plaintiff) |
| Findex Services Pty Ltd (Second Plaintiff) | |
| Financial Index Australia Pty Ltd (Third Plaintiff) | |
| Spiro Paule (Fourth Plaintiff) Danielle Bartholomeusz (Fifth Plaintiff) | |
| Phillip Hart (Sixth Plaintiff) | |
| David McKay (Defendant) | |
| Representation: | Counsel |
| I Neil SC, M Friedgut (Plaintiffs) | |
| M Karam (Defendant) | |
| Solicitors | |
| Harmers Workplace Lawyers (Plaintiffs) | |
| Just Dispute Resolution (Defendant) | |
| File Number: | SC 464 of 2019 |
| McCALLUM CJ: |
1. On 23 March 2023, I determined an application by the plaintiffs in these proceedings for
leave to file a further amended statement of claim: McKay v Findex Group Limited; Findex
Group Limited v McKay [2023] ACTSC 58. For the reasons stated in that judgment, I
indicated at [82] that I proposed to refuse leave to file the proposed further amended
statement of claim but to make orders in the terms suggested by Mr Karam on behalf of Mr
McKay. I directed the parties to bring in short minutes of order in accordance with my
reasons and listed the matter on a future date.
2. The orders suggested by Mr Karam on behalf of Mr McKay to which I referred at [82] of the
judgment were as follows:
(1) The plaintiffs’ application in proceedings dated 16 February 2023 seeking leave to file a further amended statement of claim is dismissed with costs. (2) By 20 April 2023, the plaintiffs are to provide to the Associate to McCallum CJ and the
defendant with a draft further amended statement of claim limited to:
(i) In place of struck out paragraph 110, full and proper pleadings and particulars linking the facts pleaded elsewhere in the further amended statement of claim to each cause of action said to give rise to damages on behalf of each specific plaintiff; (ii) Providing full and precise particulars of the losses claimed by each specific plaintiff for each cause of action (which may be in the alternative); (iii) Updating the details of the natural person plaintiffs, insofar as such updated details are relevant to the claim. (3) The proceeding is listed before McCallum CJ at a convenient time to the Court and
parties in the week of 1 May 2023.
3. After I had given oral reasons and made the direction referred to above, Mr Friedgut, who
appears for the Findex parties, identified a misapprehension he contended may affect the
correctness of the judgment. The misapprehension concerned the history of the plaintiffs’
claim to recover their legal costs incurred in separate proceedings by way of damages in
these proceedings. The relevant exchange was as follows:
MR FRIEDGUT: Yes, your Honour. We certainly would seek to have time to digest that if
we possibly can. Your Honour, may I – just in case it falls within the slip rule. May I draw
attention to two matters; one in relation to the judgment that your Honour has given in the
disparagement proceedings and one in relation to the other proceedings. It may be a - - -
HER HONOUR: You can raise anything you want, Mr Friedgut, I just didn’t catch precisely
what you said you are referring to.
MR FRIEDGUT: Your Honour…just in case it is necessary for me to do so with reference to
the slip rule. It may be that your Honour has considered these matters, but in case your Honour has not, may I draw attention to two matters; one in relation to the disparagement proceedings.
HER HONOUR: Yes.
MR FRIEDGUT: And the other in relation to the trespass proceedings.
HER HONOUR: Yes. What - - -
MR FRIEDGUT: Your Honour, in relation to these proceedings, your Honour – in your Honour’s judgment or your Honour’s reasons, said that the statement, I think, at page 60
wasn’t part of the amended statement of claim, it was part of a proposed amended statement
of claim. Your Honour, in fact, leave was granted to amend that statement of claim, and it was on that amended statement of claim that the proceedings were before [McWilliam As J].
So leave had been granted to amend that statement of claim. It wasn’t simply a proposed
amended statement of claim. It was a statement of claim.
HER HONOUR: That was a matter which I sought to clarify yesterday and I must have
misunderstood the answer that I was given. What I am looking at is – what I have is on
paragraph 61 of the further amended statement of claim, I must have misunderstood your
answer, Mr Friedgut. I have – in the coloured version which I understood to be – so the
amended statement of claim that was before McWilliam AsJ, I thought that that had the
proposed amendments in red.MR FRIEDGUT: Yes, your Honour, everything – all of the amendments were already granted. We were – Mr McKay’s application was argued before her Honour. It was argued
on the amended statement of claim. All the amendments were already in. That had been
granted some months - -
HER HONOUR: But my point was – well, I see. You are saying that leave was granted.
MR FRIEDGUT: Yes, your Honour.
HER HONOUR: But my point is that her Honour – it must have been a grant of leave – I
need to go back to why did her Honour grant leave to amend on 2 October?
MR FRIEDGUT: Leave was granted and the argument was that the strike – the summary dismissal application would be argued on the amended statement of claim. It wasn’t going to be argued on – there wasn’t going to be a separate application, there wasn’t going to be
an application for ... [not transcribable]...
HER HONOUR: So that was – so my – perhaps I didn’t word it accurately but what I
understood was that the strike out application was taken, as such applications often are, as a proxy for, or as coinciding with the issue of leave to amend and paragraph 110 was a paragraph that her Honour did strike out. In other words, had her Honour considered it at the point of granting leave, she would not have granted leave.
So it quite often happens that the question of leave to amend or an opponent’s application
to strike out raise the same issue and are effectively, for convenience, dealt with as the same issue. And my point was that, that being in red, that paragraph was not on the original statement of claim. It was on the amendment. The amendment was filed but subject to the
defendant’s right to seek to strike it out and they did successfully strike it out. That was my
understanding.
MR FRIEDGUT: Your Honour is correct, save that the whole basis wasn’t because of that
particular paragraph. The proposed amended statement of claim had been filed many, many, many, many months before if my memory serves me correctly and the whole reason that that amendment went through at that stage was because it had been agreed that the
nub of Mr McKay’s application had nothing to do with the amendment. It wasn’t that they
were opposing the amendment. They were reopposing the proceeding as a whole, so that you will see from the transcript nothing was said in relation to any specific amendments.
There wasn’t any argument addressed that because the amendments were bad, the - - -
HER HONOUR: Well, the matter that you have drawn to my attention does – it clarifies my understanding. It perhaps doesn’t exactly conform to the understanding I had, but it does
not prompt me to reach a different conclusion, Mr Friedgut. If - - -
…
MR FRIEDGUT: I’ve just been handed a note from my instructing solicitor and I just need to confer with her that it is correct. My instructing solicitor has sent me a note and I’m not sure
if this is correct. We are trying to explore it; that apparently we crossed that particular
paragraph out ourselves when we amended the pleadings but it wasn’t a matter that was in
contention before her Honour, McWilliam AsJ. Your Honour, I may need to just check that up, but if that is the case, it may be that that was something that was there from the very
beginning. I’m just not sure at this stage.
HER HONOUR: All right, well it’s 4.05. I think I will leave you to check that and you can – it wouldn’t then be so much a slip rule matter as a matter for seeking to persuade me to vary
an interlocutory order. But your position is protected in the sense that it is noted that I may
have proceeded on a misapprehension. What you originally outlined to me is what – was
the impression that I did have, so that is not a slip rule matter, if that makes sense.
MR FRIEDGUT: Yes, your Honour, as long as – I just wanted to make sure that position was
protected.
4. In due course, the Findex parties filed an application in proceeding on 28 April 2023
relevantly seeking the following orders:
1. Order that the interlocutory direction made on 23 March 2023 that the parties agree Short Minutes of Order giving effect to the reasons orally published on that day (the Reasons) be vacated insofar as may be necessary for the purpose of making Orders 2 and 3 below;
2. Order pursuant to Rules 501 and/or 502 and/or 503 of the Court Procedure Rules 2006 (ACT), and/or pursuant to the inherent jurisdiction of the Court, that leave be granted to the plaintiffs to file the Further Amended Statement of Claim (FASOC) annexed to this application;
3. Order pursuant to Rule 270(2)(b) of the Court Procedure Rules 2006 (ACT) that these proceedings be heard together with proceedings SC 172 of 2020 (the Undertaking Proceedings), SCI 1 of 2020 (the Defamation Proceedings) and SC109 of 2020 (the Trespass Proceedings), and that evidence in one proceeding be evidence in each of the other proceedings;
5. At the first return of that application, in response to a submission by Mr Karam that it was
not clear to him the basis on which the Court was invited to vacate an order made after a
contested hearing and the publication of considered reasons, I determined first to hear
submissions from the parties on the preliminary issue raised by order 1, namely, whether
the Court should take the step of vacating the direction made on 23 March 2023 (the
alternative path, of course, being that the Findex parties might have sought leave to appeal
against my judgment). That occurred yesterday.
6. The submissions provided yesterday by both parties were helpful in distilling the relevant
principles. I think it is fair to say that Mr Karam to some extent resiled from his initial
position and resistance to the Court's vacating the direction made on 23 March 2023, at
least insofar as he acknowledged that it is not necessary for the Findex parties to establish
a change of circumstances in order to enliven the Court's authority to take that course.
Rather, it was common ground between the parties that the relevant principles are as set
out at [4] of Mr Karam’s submissions, as follows:
4.1 the power [to vary an order before it has been perfected] is to be exercised “with great
caution” in view of the public interest in the finality of legal proceedings;4.2 parties should not be permitted, via a purported application to vary an interlocutory order, to attempt to bring an impermissible appeal against the original order;
4.3 the jurisdiction is not a back door for re-arguing the case. It is not to be used for the purpose of re-agitating arguments already considered by the court or because a party has failed to present the argument in all its aspects or as well as it might have been put; 4.4 where orders have been made after a contested hearing, the Court ought not alter an
interlocutory order unless there has been a material change in circumstances;4.5 ultimately, the touchstone is the interests of justice but taking to account considerations
such as the above.
7. The authorities cited by Mr Karam to support those propositions were Autodesk Inc v
Dyason (No 2) [1993] HCA 93; 176 CLR 300 at [4], Liu v The Age Company Limited [2016]
NSWCA 115; 92 NSWLR 679 at [199], Brimaud v Honeysett Instant Print Pty Ltd (1988)
217 ALR 44 at 46 and Notaras v St George Bank Ltd [2005] ACTSC 5; 157 ACTLR 1 at
[19]-[20].
8. The assistance provided by the parties in that respect and the fact that they reached
common ground, particularly as to the touchstone for the present determination being the
interests of justice, enables me to consider whether or not I am prepared to exercise the
power the Findex parties seek to invoke. In order to consider that question, it is necessary
first to look closely at the incorrect assumptions the Findex parties contend infected my
judgment. Those are set out in detail in the grounds of the application filed on 28 April
2023.
9. The first is the assumption that the claim of the Findex parties to recover, by way of
damages in “the disparagement proceedings” (these proceedings), legal costs incurred in
the prosecution of the preliminary discovery and search order proceedings (separate
proceedings) was new. The second is the assumption that the costs claim had not
previously formed part of the proceedings.
10. There are various points in my earlier judgment at which the Findex parties point to my
recording that proposition. As noted by Mr Karam yesterday, two of those are merely points where I recorded his submissions. But there can be no doubt that my judgment proceeded
on an understanding that there was a measure of newness to that aspect of the claim.
11. Before addressing that issue, it is helpful to set out precisely what the pleadings say about
that. The statement of claim was filed on 1 March 2019. That pleading at paragraph 110
provided particulars of the loss and damage suffered by the plaintiffs in terms which made
no reference to any claim for the legal costs of the preliminary discovery and search order
proceedings. Instead, the loss claimed in that originating process echoed the language of
a claim for damages for defamation or injurious falsehood. The plaintiffs claimed damage
to their respective reputations; they claimed to have suffered hurt to feelings and
embarrassment and they contended that their hurt and upset was increased by their
knowledge of various matters.
12. One of the matters relied upon as an aggravating factor increasing the hurt, upset and
damage suffered by the plaintiffs was:
The anonymous or pseudonymous nature of the Representations – and [the plaintiffs'] knowledge of the extreme lengths that McKay went to hide his identity…such that they were
unable to effectively challenge or respond to them.
However, it is clear from the pleading that that was relied upon as a factor of aggravation
of damage on account of the plaintiffs' knowledge of that factor. There was no discrete
claim there for the costs of the preliminary discovery proceedings.
13. An amended statement of claim was filed, described as the “Amended Statement of Claim
filed pursuant to leave granted by McWilliam AJ on 2 October 2020”. That document bears
the Court stamp of having been lodged on 9 October 2020. It was common ground at the
hearing yesterday that the document was indeed filed on that date and, further, that it was
filed on the understanding that Mr McKay’s right to object to any part of it were reserved.
In due course, Mr McKay exercised that right and that resulted in a decision by
McWilliam AsJ striking out paragraph 110 of the pleading, where damage was pleaded, in
its entirety: Findex Group Limited v McKay [2022] ACTSC 192 at [107](1).
14. In that pleading, the plaintiffs repeated the contention that their hurt to feelings,
embarrassment and mental distress had been increased by their knowledge of certain
matters and the contention that one of those matters was the lengths to which Mr McKay
had gone to hide his identity was retained. There was in addition the following paragraph:
In addition, Findex on its own behalf and on behalf of each of the plaintiffs incurred substantial expense in investigating the source of the anonymous and pseudonymous representations as aforesaid and in taking action in relation to them.
15. Following McWilliam As J’s decision striking out paragraph 110 (including that paragraph)
in its entirety, the plaintiffs propounded a further amended statement of claim. That was the version of the pleading addressed in my earlier judgment. In that document, the
plaintiffs addressed at length the costs of the preliminary discovery and search order
proceedings under paragraphs numbered 109.1-109.19. The pleading concluded with the
contention that, in the circumstances pleaded in those paragraphs, Mr McKay was liable
to the plaintiffs for the costs of the preliminary discovery and search order proceedings
except to the extent that actual specific and final costs orders in relation to specific
applications had already been made in those proceedings.
16. There followed particulars which addressed the costs. Those particulars included the
following:
The plaintiffs seek an order that McKay pay the Preliminary Discovery and Search Order proceedings Costs - that is all of the costs and disbursements incurred in and connection with the preliminary discovery proceedings and the search order proceedings on an indemnity, alternatively, solicitor/own client basis - that is, all of the costs of and in connection with such proceedings other than those costs - if any at all - that McKay proves to have been unreasonably incurred, or of an unreasonable amount; alternatively, such of the Preliminary Discovery and Search Order proceedings Costs as the Court considers to have been reasonably incurred in an attempt to reduce losses caused by Mr McKay's breach of the Non-Disparagement clause and/or statutory contraventions alleged above; and other than those specific costs that are the subject of final and binding specific costs orders made in respect of specific applications in the Preliminary Discovery proceedings and Search Order proceedings. If and insofar as the Court holds that any one or more of the members of the Findex Group and/or any one or more of all of the natural person plaintiffs are entitled to the Preliminary Discovery and Search Order proceedings' Costs (whether in whole or in part) as damages caused by McKay's breach of the Non-Disparagement Agreement then Findex Services seeks such costs in full satisfaction of this particular head of damage.
17. There is an alternative pleading to which it is not necessary to refer for present purposes.
18. It may be seen from the language of those particulars that what was sought by way of
damages in the version of the pleading considered by me in March was the whole of the
costs of separate legal proceedings, except to the extent that Mr McKay proves those costs
to have been unreasonably incurred or of an unreasonable amount.
19. Finally, it may be helpful for present purposes to note that an aspect of the application now
sought to be brought is an amendment to those particulars (albeit not marked up) which
contemplates that, instead of the costs in the other proceedings being required to be
proved in these proceedings, the damages sought would be confined to the costs of the
other proceedings as assessed in accordance with the Court Procedures Rules 2006
(ACT). That is made plain by the (unmarked) addition of the word “assessed” in paragraph
109.19 of the proposed further amended pleading and an additional paragraph 109.20
which was not in the earlier iteration of the pleading considered by me.
20. Returning to the first and second incorrect assumptions made by me, it is correct, as
complained of by the Findex parties, that in my earlier judgment I referred to the amended statement of claim as a proposed amendment which was not allowed. The true position
was that that pleading was filed in accordance with the leave granted by McWilliam AsJ.
However, as I have noted, that was on the express understanding that Mr McKay's
entitlement to object to it was reserved. I would regard that, I must say, as a distinction
without a difference.
21. The lateness of the pleading of the claim for costs is a significant matter which was the
subject of submissions yesterday. The Findex parties contend that it was an incorrect
assumption made by me to say that the claim was introduced “at this very late stage of the
proceedings” (at [74] of my earlier judgment) because the amended pleading had in fact
been served on Mr McKay as early as November 2019. It should be observed that even
that date was late. Ordinarily, a party files a defence to a statement of claim within a month
of its being filed and served. The complaint that I was wrong to describe as “late” an
amendment which had been notified to Mr McKay some eight months after the original
pleading is, in my assessment, unfounded.
22. Separately, it may be seen from the wording of the amended pleading set out above that
the claim was scarcely articulated with clarity. Indeed, the absence of any description of
the expenses claimed as “legal”, or any description of the action taken by Findex as “legal”,
is curious. It is certainly not clear to me, although it may have been clarified in
correspondence between the parties, that that was unequivocally intended to be a claim
for the legal costs of the preliminary discovery proceedings, as opposed to ancillary back-
of-house costs of supporting the steps taken to that end. In any event, it may be accepted
for present purposes (that is, for the purposes of argument) that both parties understood
that to be a reference or a nod to the prospect of a claim for the costs of the preliminary
discovery proceedings as damages in the disparagement proceedings.
23. The third incorrect assumption identified in my judgment is that I said, “it is not possible on
an application of the present kind to explore the merits” of the submission made on behalf
of Findex that Findex was not responsible for the fact that the application was made at “this
very late stage of the proceedings”: at [76]. With great respect to those representing the
Findex parties, that submission reflects a theme of the submissions put yesterday that they
were entitled to the amendment unless someone else could establish why it should not be
allowed. That is in circumstances where there is or has been no explanation drawn to my
attention or emphasised in any of the submissions made to me as to why the claim was
not included in the original pleading.
24. An originating process is not an invitation to a party. It is a document which should
crystallise the issues as to which the Court’s jurisdiction will be invoked. I still do not
understand why the claim for costs was not included in the originating process, because
that has not been emphasised to me in any submissions put before the Court.
25. The fourth incorrect assumption was that I determined the claim on the premise that the
introduction of the costs of the preliminary discovery proceedings as a head of damage in
the disparagement proceedings would give rise to a claim of extremely large scope and
would expand the scope of the proceedings. In addressing that matter yesterday Mr Neil,
who appeared for the plaintiffs on that occasion and argued the application to vacate “order
1” (the direction I made on 23 March 2023), emphasised the new paragraph 109.20 (to
which I have referred) where it is made plain that only the costs as assessed in accordance
with the Rules will be the subject of any contested fact in the proceedings whereas, as I
indicated during argument, I had assumed the claim would put the Court in the shoes of a
costs assessor.
26. Having returned carefully overnight to the precise content of the pleadings, I do not think
my misapprehension of that issue was unfounded. As I have indicated, the language of
the further amended statement of claim considered by me was of “proof” and of costs
issues being determined in the proceedings by the Court. It is only in the further iteration
of the pleading now sought to be propounded that the language of “assessment” of those
costs has been introduced.
27. The fifth incorrect assumption relates to a different matter; that is, the assumption that the
further amended statement of claim failed to specify whether the plaintiffs ’ claims for
damages were based upon their contractual claim or the statutory cause of action. The
Findex parties say that was an error because it is both. That does not meet the point I was
making in the judgment and I am not persuaded that is an issue that warrants revisiting.
28. Finally, the sixth incorrect assumption is that the further amended statement of claim
introduced further parties and that it was confusing and embarrassing to do so without
making any attempt to make them parties to the proceedings. Again, that is a matter I have
dealt with in the judgment. It does not, in my view, raise any basis for revisiting my ruling.
29. The principal issue is the question of claiming the costs of other proceedings as damages
in these proceedings and that, I accept, is a difficult issue.
30. Mr Neil acknowledged that, to warrant intervening with my already considered ruling and
vacating order 1, the Findex parties face a high hurdle, and that is established by the
principles to which I have referred. I accept, as Mr Neil submitted, that this application is
not in the line of country where a change of circumstances must be established and that
the touchstone is whether it is in the interests of justice to revisit the ruling.
31. The process I have adopted of determining effectively as a preliminary question whether I
should intervene with the ruling carefully argued on the last occasion warrants explaining
in itself.
32. As submitted by the Findex parties, and I think accepted by Mr McKay, the Court does
have power to vary its own orders where a judgment or ruling has proceeded on a
misapprehension. That is in the interests of justice in some circumstances because of the
obvious efficiencies of having the same judge consider whether the argument or
determination of the issue raised by the application went off the rails in some way.
Conversely, as I think is acknowledged in the submissions of both parties, there are the
interests not only of finality in litigation, which plainly are of less weight in the case of an
interlocutory ruling, but also the objectives of case management.
33. Section 5A of the Courts Procedures Act 2004 (ACT) provides:
5A Main purpose of civil procedure provisions
(1) The main purpose of the civil procedure provisions is to facilitate the just resolution of disputes—
(a) according to law; and (b) as quickly, inexpensively and efficiently as possible. (2) Without limiting subsection (1), the main purpose includes the following objectives:
(a) the just resolution of the real issues in civil proceedings; (b)
the efficient use of the judicial and administrative resources available for the purposes of the court;
(c) the efficient disposal of a court’s overall caseload; (d) the timely disposal of civil proceedings; (e)
the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3)
The civil procedure provisions must be interpreted and applied, and any power or duty imposed by them (including the power to make rules) must be exercised or carried out, in the way that best promotes the main purpose.
(4) The parties to a civil proceeding must help the court to achieve the objectives. (5) In this section:
civil procedure provisions means—
(a) the rules made under section 7, in their application to civil proceedings; and (b)
any provision of this Act in relation to the practice and procedure of a court in civil proceedings.
court includes a tribunal that is a prescribed tribunal under section 6.
34. Much of the argument put by the Findex parties yesterday concerning the question of
whether they should be permitted to claim the legal costs of the preliminary discovery
proceedings as a head of damages in the disparagement proceedings proceeded again
rather on the assumption that unless Mr McKay could establish that such a claim was not
maintainable at law, it should be allowed at this stage. In oral argument I pressed Mr Neil
as to his contention that the rejection of the amendment introducing that claim faced a
General Steel test: General Steel Industries Inc v Commissioner for Railways (NSW) [1964]
HCA 69; 112 CLR 125. He replied that it does face a General Steel test if the reason the
claim is not allowed is that it is not available as a matter of law.
35. But an analysis of my reasons in my earlier published judgment will show that that is not
why I disallowed the claim. I accept that the judgment was wrong to the extent that I
proceeded on the understanding that the amended statement of claim had not been filed
and, in other words, that there was not previously on the pleadings filed in Court some
reference to a potential claim for costs as damages (although, as I have already explained,
I think it was poorly expressed and was certainly not clearly referable to the legal costs, as
opposed to other expenses). The difficulty the plaintiffs have never grappled with is that
this is an issue which was determined by me at a case management level.
36. That is the basis on which Mr Karam submitted I should now deal with it. He said on that
basis that I would not revisit my ruling, not because it is impossible for any person ever to
claim legal costs in one set of proceedings as a head of damages in other proceedings,
but because in all the circumstances of this case that amendment should not be allowed
at this stage. Importantly, I reject the submission that it was an incorrect assumption on
my part that the claim would add considerably to the scope of the proceedings. Certainly
on the basis on which I determined the application, that was very much a proper
consideration for the reason I have explained, namely, that the way the claim was
expressed in the proposed further amended statement of claim before me, it did appear to
be a case which would put the Court in the shoes of a costs assessor. That has been
clarified and perhaps that would make some difference. It is difficult to know the full scope
of that.
37. That brings me to a further issue which militates against proceeding in the manner
contended for by the Findex parties of vacating my previous ruling. It is that the orders
proposed by Mr Karam (which, as indicated at [82] of my earlier judgment, should guide
what happens next) contemplate that the plaintiffs will provide a draft further amended
statement of claim limited to, in place of struck out paragraph 110, full and proper pleadings
and particulars linking the facts pleaded elsewhere in the further amended statement of claim to each cause of action said to give rise to damages on behalf of each specific
plaintiff.
38. I endeavoured to explore this issue when the proceedings were first back before the Court
after I had published my judgment of 23 March 2023. Mr Friedgut was not available to
appear on that occasion and it may be that Mr Neil was not able, for reasons I fully accept,
to obtain instructions about what the Findex parties would seek to do by their present
application. What I tried to understand then, and still do not understand, is why, if it be
correct that the claim for legal costs did sit on the amended statement of claim in paragraph
110, the Findex parties cannot now maintain that claim by fully particularising it in the
manner proposed in the orders propounded by Mr Karam.
39. There are other reasons why I would not revisit my earlier ruling at this stage, apart from
the General Steel issues I have already addressed. First, no explanation has been brought
forward or at least made clear to me as to why the amendment as between the original
statement of claim and the amended statement of claim was made. There is no explanation
of that decision in the manner one would ordinarily expect to see in support of an
application to amend. Instead, the Findex parties have proceeded on an assumption that
others had to show why the amendment should not be allowed.
40. Secondly, I remain of the view, notwithstanding the concession to assessment according
to the Rules rather than proof in the legal proceedings, that this costs claim will expand the
scope of these proceedings on the basis of the pleading that was put before me in support
of the present application.
41. Thirdly, the Findex parties have a mechanism for recovering their costs which is by claiming
them in the proceedings in which they were incurred. As an aspect of the present
application, they seek to have those proceedings joined with these proceedings. In that
event, the same judicial officer will have the same evidence before them and will be fully
equipped to make an appropriate determination about the costs in the forum of the
preliminary discovery proceedings.
42. For those reasons, I decline to make order 1 in the application. It follows that the
application is dismissed. As I have endeavoured to explain, however, the regime
contemplated in my earlier judgment at [82] should not foreclose the Findex parties from
providing full and proper pleadings and particulars in support of whatever claims were
pleaded in the amended statement of claim.
43. The orders accordingly are:
| (1) The application in proceedings dated 24 April 2023 is dismissed, with costs. (2) The application in proceedings dated 16 February 2023 seeking leave to file a further |
amended statement of claim is dismissed, with costs.
(3) By 2 June 2023, the plaintiffs are to file and serve a further amended statement of claim
limited to:
(i) In place of struck out paragraph 110, full and proper pleadings and particulars
linking the facts pleaded elsewhere in the further amended statement of claim
to each cause of action said to give rise to damages on behalf of each specific
plaintiff;
(ii) Providing full and precise particulars of the losses claimed by each specific
plaintiff for each cause of action (which may be in the alternative); and
(iii) Updating the details of the natural person plaintiffs, insofar as such updated
details are relevant to the claim.
(4) That the defendant’s by 9 June 2023 notify the court and the plaintiffs whether they
object to the proposed amended pleading and if so particulars of the objections.
(5) Tentatively list the matter on 13 June 2023 at 9:30am before McCallum CJ.
I certify that the preceding forty-three [43] numbered
paragraphs are a true copy of the Reasons for
Judgment of her Honour Chief Justice McCallum
Associate:
Date: 24 May 2023
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