Girgis Nominees (WA) Pty Ltd v Poliwka [No 5]
[2019] WASC 51
•22 FEBRUARY 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: GIRGIS NOMINEES (WA) PTY LTD -v- POLIWKA [No 5] [2019] WASC 51
CORAM: VAUGHAN J
HEARD: 7 FEBRUARY 2019
DELIVERED : 7 FEBRUARY 2019
PUBLISHED : 22 FEBRUARY 2019
FILE NO/S: CIV 2425 of 2014
BETWEEN: SHERIF ELHAMY WADIE GIRGIS
First Plaintiff
GIRGIS NOMINEES (WA) PTY LTD
Second Plaintiff
AND
WASIL NICHOLI POLIWKA
First Defendant
POLIWKA GROUP PTY LTD
Second Defendant
FIRST WESTERN ADMINISTRATION PTY LTD
Third Defendant
Catchwords:
Practice and procedure - Application for leave to amend pleadings - Application to disallow certain amendments to pleadings - Concurrent wrongdoer proportionate liability defence - Whether reasonable defence - Whether loss or damage the concurrent wrongdoers caused is the same loss or damage that is the subject of the plaintiffs' claim - Turns on own facts
Legislation:
Civil Liability Act 2002 (WA), pt 1F s 5AI
Rules of the Supreme Court 1971 (WA), O 21 r 3
Result:
Leave to amend par 17.4 of the third further re-amended defence and counterclaim granted
Amendments contained in pars 52A.1 - 52A.3 and pars 113A.1 - 113A.3 of the second further re-amended defence and counterclaim disallowed
Leave to add par 115B of the third further re-amended defence and counterclaim refused
Category: B
Representation:
Counsel:
| First Plaintiff | : | D H Solomon |
| Second Plaintiff | : | D H Solomon |
| First Defendant | : | C Chenu |
| Second Defendant | : | C Chenu |
| Third Defendant | : | C Chenu |
Solicitors:
| First Plaintiff | : | Solomon Brothers |
| Second Plaintiff | : | Solomon Brothers |
| First Defendant | : | Vogt Graham Lawyers |
| Second Defendant | : | Vogt Graham Lawyers |
| Third Defendant | : | Vogt Graham Lawyers |
Case(s) referred to in decision(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
DM Drainage and Constructions Pty Ltd v Karara Mining Ltd [No 3] [2018] WASC 398
GD Pork Pty Ltd v Derby Industries Pty Ltd [2018] WASC 223
Girgis v Poliwka [No 4] [2018] WASC 321
Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3] [2018] WASC 73
VAUGHAN J:
(These reasons were delivered orally at the conclusion of the hearing. They have been edited to correct matters of grammar and infelicity of expression. Authorities and other references have also been footnoted rather than appearing in the body of the reasons.)
Introduction
There are two applications before me, both dated 1 February 2019:
(1)The plaintiffs apply for disallowance of pars 52A.1 to 52A.3 and 113A.1 to 113A.3 of the defendants' second further re‑amended defence and counterclaim dated 20 January 2019.
(2)The defendants apply for leave to amend in terms of a minute of proposed third further re-amended defence and counterclaim dated 1 February 2019. In substance this does two things. First, it introduces a minor amendment to par 17.4. Second, it would add a par 115B.
I do not apprehend that any material prejudice could be caused by the proposed amendment to par 17.4. Accordingly, I will allow that amendment. The real debate before me was as to the other pleas: pars 52A, 113A and 115B. They seek to introduce a concurrent wrongdoer proportionate liability defence as to certain of the claims made in the statement of claim.
Background and principles on amendment
The applications have been brought and heard urgently in a context where the action has been set down for trial. Trial is due to commence in a little over four weeks on 11 March 2019. The trial is likely to be long and will be factually dense. The trial is listed for some 25 days.
The amendments to the pleadings have been introduced at a late stage. The proceedings were commenced in October 2014. An initial defence was filed in December 2014. There have been many amended defences since that time. Orders were made listing the matter for trial on 9 July 2018 and the action was formally entered for trial on 25 July 2018.
In oral submissions counsel for the defendants candidly informed me that the reason for the late amendments was that he, as counsel newly retained, had looked at the matter with fresh eyes.
I accept that counsel for the defendants and those instructing him have only been involved in the action for a short time. I also accept that they have acted promptly; there has been no delay on their part. It is, however, the case that the defendants have had ample opportunity to plead out a concurrent wrongdoer proportionate liability defence before now. The failure to do so is unexplained. I am asked to infer that there was a failure to advise the defendants that such a defence ought to be pleaded. I am not prepared to so infer. The defendants could have produced direct affidavit evidence on that subject but have not done so. In the absence of the defendants going on oath I do not consider I am justified in drawing a favourable inference in their favour.
Accordingly, the only explanation for the lateness of the amendments is that new counsel and solicitors have been appointed.
The principles that apply on late amendment applications are not in doubt. Counsel for the defendants referred me to Tottle J's decision in Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3].[1] I refer there in particular to pars 42 to 49. I would also refer to my own decisions in GD Pork Pty Ltd v Derby Industries Pty Ltd[2] and DM Drainage and Constructions Pty Ltd v Karara Mining Ltd [No 3].[3] I will not restate those principles now but will simply adopt and apply them.
[1] Westgem Investments Pty Ltd v Commonwealth Bank of Australia Ltd [No 3] [2018] WASC 73.
[2] GD Pork Pty Ltd v Derby Industries Pty Ltd [2018] WASC 223 [13] ‑ [19].
[3] DM Drainage and Constructions Pty Ltd v Karara Mining Ltd [No 3] [2018] WASC 398 [14] ‑ [19].
I have mentioned that the contentious amendments ‑ those made without leave under O 21 r 3[4] and that for which leave is now sought ‑ concern a concurrent wrongdoer proportionate liability defence. Any such defence must be considered in the context of the claim to which it is said to be a defence. I will, however, not take this opportunity to essay the nature of the plaintiffs' pleaded case. That has, in any case, been undertaken before. In that regard, I refer to Girgis v Poliwka [No 4],[5] especially at pars 5 to 6 and the passages there referred to.
[4] Rules of the Supreme Court 1971 (WA), O 21 r 3.
[5] Girgis v Poliwka [No 4] [2018] WASC 321.
Amendment at par 52A
The first of the controversial amendments is at par 52A.
Broadly, this is concerned with that part of the case that involves the Midland property and the Pub Business. At par 40 of the statement of claim (SOC) the plaintiffs plead that Mr Girgis provided a guarantee and that the Girgis Trust advanced certain loans to Girpol and Bold Gem. It is said that Mr Girgis made a payment pursuant to the guarantee (SOC par 51A). At par 52 of the SOC it is said that, by reason of alleged misleading conduct within various statutory provisions, the plaintiffs have suffered loss or damage. The alleged loss is particularised as various unpaid loans, the payments under the guarantee and various expenses said to have been incurred in seeking to recover the loans.
The proposed concurrent wrongdoer proportionate liability defence in par 52A of the second further re-amended defence and counterclaim then reads:
52AIf (which is denied) the plaintiffs (or either of them) have suffered loss or damage because of the conduct of the defendants (or any one or more of them) in contravention of s.52 of the TPA and/or s.10 of the FTA 1987 and/or s.18 of the ACL (Cth) and/or s.18 of the ACL (WA) and/or s.12DA of the ASICA as claimed by the plaintiffs in paragraph 52 of the statement of claim (in this paragraph, Claim);
52A.1each of the persons named in subparagraph 52A.3 is a concurrent wrongdoer in relation to that claim within the meaning of that term in Part VIA of the TPA and/or Part 1F of the Civil Liability Act 2002 (WA) (CLA (WA)) and/or Part VIA of the CCA and/or Part VIA of the FTA 2010 and/or subdivision GA of division 2 of the ASICA;
52A.2the liability of each of the defendants who is a concurrent wrongdoer in relation to the Claim is limited to the amount reflecting that portion of the damage or loss claimed by the plaintiffs under the Claim that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss;
52A.3Sunriver, Mr Pollock and Ms Kuhnert;
Particulars to par 52A.3 are then provided. These provide the material facts by which it is said that the three named persons ‑ Sunriver, Mr Pollock and Ms Kuhnert ‑ are concurrent wrongdoers. It is unnecessary to repeat those particulars in full. I note that the particulars rely on alleged misleading conduct on the part of the three named persons. What is material, however, is what is pleaded by way of reliance and alleged damage. This appears at particulars (j) and (k) as follows:
(j)In reliance on the conduct referred to in paragraph (i), Mr Girgis caused Girgis Trust to purchase 50% of the shares in Sunriver and 50% of the units in the Junction Trust.
(k)To the extent the matters referred to in particular (j) caused loss and damage to the plaintiffs, Sunriver, further or in the alternative Ms Kuhnert, further or in the alternative Mr Pollock, are concurrent wrongdoers in respect of that loss and damage.
Accordingly, the loss and damage the subject of the proposed concurrent wrongdoer proportionate liability plea in par 52A is that brought about by the Girgis Trust's purchase of 50% of the shares in Sunriver and 50% of the units in the Junction Trust.
The concurrent wrongdoer proportionate liability defence is pleaded by reference to various statutory provisions. All of those provisions contain a definition of 'concurrent wrongdoer'. It is necessary that the defendants bring themselves within the definition of 'concurrent wrongdoer' if they are to have a viable defence within the various concurrent wrongdoer proportionate liability legislative provisions.
The various statutory provisions contain identical definitions of the term 'concurrent wrongdoer'. Accordingly, it is not necessary to refer to them all. For illustration purposes it is enough if I refer to the definition in the Civil Liability Act 2002 (WA). It provides in s 5AI:
Concurrent wrongdoer in relation to a claim means a person who is one of two or more persons whose act or omission caused independently of each other or jointly the damage or loss that is the subject of the claim.
Thus, it must be shown that the relevant defendant is one of two or more persons whose act or omission caused the loss or damage that is the subject of the claim. It must also be shown that the other suggested wrongdoers fall within the definition. Here, the other suggested concurrent wrongdoers are Sunriver, Mr Pollock and Ms Kuhnert. The defendant must plead and prove that Sunriver, Mr Pollock and Ms Kuhnert are persons whose act or omission caused the loss or damage that is the subject of the plaintiffs' claim. The loss or damage that Sunriver, Mr Pollock and Ms Kuhnert, as putative concurrent wrongdoers, are said to have caused to the plaintiffs by act or omission must be the same loss or damage that is the subject of the plaintiffs' claim against the defendants.
That is self-evidently not the case here.
When this was raised with counsel for the defendants in argument he accepted, correctly in my view, that it was not the same damage. It was suggested, however, that there might be a causative link. That suggestion may be put aside. For the defendants to bring themselves within the concurrent wrongdoer proportionate liability defence in the legislative provisions, it must be the same loss or damage that is the subject of the plaintiffs' claim. That is not the case. It follows, in my opinion, that pars 52A.1 to 52A.3 do not provide a reasonable defence.
I would disallow the amendment on the basis that it does not propound a reasonable defence.
Because of this conclusion it is unnecessary to traverse the various Aon factors[6] that were raised in submissions. I should say, however, that I am not attracted to the defendants' argument that there could be no prejudice to the plaintiffs by reason of the proposed amendment as the limitation period against Sunriver, Mr Pollock and Ms Kuhnert expired long ago. As discussed in argument, it may well be that no limitation period accrued until demand was made on Girpol and Bold Gem and there was a failure on their part to pay. If so, the plaintiffs remain within the relevant limitation period. So too as to the guarantee payments. If time runs from the date of payment ‑ March and April 2016 ‑ the plaintiffs are very much within the relevant limitation period.
[6] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.
In those circumstances the issue of prejudice as raised in par 5 of the plaintiffs' written submissions is potentially of real force. That said, I make no finding in this regard. It is unnecessary to do so. Paragraphs 52A.1 to 52A.3 disclose no reasonable defence.
Amendment at pars 113A and 115B
A similar problem arises as to the two further controversial amendments in par 113A of the second further re-amended defence and counterclaim and proposed par 115B of the proposed third further re‑amended defence and counterclaim.
I do not intend to go through the same exercise with these pleas to demonstrate how, in responding to the plaintiffs' claim, there is a disconnect between the loss and damage the subject of the plaintiffs' claim and the loss and damage that is said to make the persons named in par 113A and proposed par 115B a concurrent wrongdoer with the defendants. That exercise was performed in the course of the oral hearing. Counsel for the defendants accepted ‑ correctly in my view ‑ two propositions. First, the loss or damage which the alleged concurrent wrongdoers were said to have caused the plaintiff was not the whole of the loss or damage said to have been suffered in the plea of the SOC to which the amendments were said to respond. Second, it was difficult to identify the alleged loss or damage the subject of the claim ‑ that being particularised in par 113.2 of the SOC ‑ which has in fact been purportedly caused by act or omission on the part of the putative concurrent wrongdoers.
Counsel for the defendants sought to justify the latter problem on the basis that the defendants cannot presently tell what of the loss or damage in par 113.2 of the SOC is attributable to the alleged concurrent wrongdoers because it is not apparent on the face of the statement of claim.
I do not accept that justifies the deficiency in the defendants' pleading. A pleading must identify the issues, disclose an arguable claim or defence and inform the other party of the case that must be met. It is not enough to suggest that some of the loss or damage the subject of par 113 of the SOC is loss or damage that makes the parties named in par 113A and proposed par 115B a concurrent wrongdoer. The plaintiffs are entitled to know ‑ with particularity ‑ what is the loss or damage the subject of their claim that is said to be loss or damage also caused by act or omission of the putative concurrent wrongdoer.
It is plain, from counsel for the defendants' first concession, that par 113A and proposed par 115B do not plead a reasonable defence to the whole of the plaintiffs' claim in pars 113 and 115 of the SOC. It is plain from counsel's second concession that it is not possible to identify which parts of the claim the defence and proposed defence is responsive to. In that regard the pleading in its current form will prejudice, embarrass or delay the fair trial of the proceeding. On both bases the amendment in par 113A should be disallowed and leave ought not be granted for the proposed amendment in par 115B.
The deficiency in the pleaded case is more acute given the limited time between now and trial. The lack of precision in the pleading means that the plaintiffs do not know ‑ indeed the plaintiffs cannot know ‑ fully the case that they would have to meet were the pleading allowed to stand. The lack of exposition in the pleading means that the controversial amendments do not fulfil the basic function of a pleading.
Conclusion and orders
The orders I propose are as follows:
(1)The defendant have leave to amend to include the proposed amendment to par 17.4.
(2)The amendments in pars 52A.1 to 52A.3 and pars 113A.1 to 113A.3 are disallowed.
(3)Leave to amend in terms of proposed par 115B is refused.
I will hear from the parties as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EP
Research Associate to the Honourable Justice Vaughan22 FEBRUARY 2019
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