Higgins Coatings Proprietory Limited v Glenn-Craig Villages Pty Ltd
[2017] WADC 96
•27 JULY 2017
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: HIGGINS COATINGS PROPRIETORY LIMITED -v- GLENN-CRAIG VILLAGES PTY LTD [2017] WADC 96
CORAM: STEWART DCJ
HEARD: 30 NOVEMBER 2016 & 10 MARCH 2017
DELIVERED : 27 JULY 2017
FILE NO/S: CIV 3760 of 2012
BETWEEN: HIGGINS COATINGS PROPRIETORY LIMITED
Plaintiff
AND
GLENN-CRAIG VILLAGES PTY LTD
Defendant
Catchwords:
Appeal from registrar - Appeal from decision to allow amendment to defence set-off and counterclaim - Amendment to withdraw admissions - Appeal from decision to dismiss plaintiff's application for summary judgment - Turns on own facts
Legislation:
District Court Rules 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Appeal dismissed
Representation:
Counsel:
Plaintiff: Ms E Luck
Defendant: Mr M Howard SC and Mr G J Carter
Solicitors:
Plaintiff: Havilah Legal
Defendant: Mitry Lawyers
Case(s) referred to in judgment(s):
Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492
Essex Securities Pty Ltd v Lunt [2006] WASC 58
Fazio v Fazio [2012] WASCA 72
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Nyoni v Paterson [2012] WASCA 171
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212
STEWART DCJ:
Introduction
The plaintiff company, Higgins Coatings Proprietary Limited, operates a business of providing commercial painting services.
The defendant company, Glenn-Craig Villages Pty Ltd, operates a number of aged care centres, including one in Albany and one in Maylands.
On 5 December 2012, the plaintiff commenced proceedings in the District Court against the defendant alleging money was owed by the defendant due to early termination of painting contracts in respect of the defendant's premises in Albany and Maylands.
This is an appeal against the decision of Deputy Registrar Harman on 13 June 2016.
The learned registrar made orders that:
1.The Defendant have leave to withdraw the admissions contained in paragraphs 4 to 10 inclusive, and paragraphs 13 to 15 inclusive of the defence to the amended statement of claim.
2.The Defendant have leave to file and serve an amended defence, set‑off and counterclaim, to the amended statement of claim, in terms of the minute of proposed amended defence, set-off and counterclaim to the amended statement of claim, annexed to the affidavit of John Vincent Gillett sworn 21 April 2016.
3.The Defendant pay the Plaintiff's costs thrown away by the amendments to the Defence.
4.The Plaintiff's application for summary judgment be dismissed.
5.The Plaintiff pay the Defendant's costs of and incidental to the summary judgment application, pursuant to Order 14 Rule 8 of the Supreme Court Rules in any event.
6.Costs otherwise be in the cause.
By this appeal the plaintiff seeks the following orders:
1.The Defendant's application for leave to withdraw the admissions contained in paragraphs 4 to 10 inclusive, and paragraphs 13 to 15 inclusive of the defence to the amended statement of claim be dismissed.
2.The Defendant's application for leave to file and serve an amended defence, set-off and counterclaim to the amended statement of claim be dismissed.
3.The Plaintiff's application for summary judgment be granted and judgment be entered for the Plaintiff on the following terms:
a.The Defendant pay to the Plaintiff:
i.$89,300.00 plus GST, being the amount owing under contract for the value of services provided to the Defendant by the Plaintiff that remain unpaid;
ii.interest on $89,300.00 at a rate of 6% per annum from 27 July 2012 until payment; and
iii.The Plaintiff's costs of the action, including the costs of the appeal and the applications.
Nature of the appeal
The notice of the appeal does not set out any grounds of appeal.
This appeal is brought under r 15(1) of the District Court Rules 2005 (WA) (DCR).
An appeal from the decision of a registrar to a judge under r 15(1) of the DCR is a hearing de novo: DCR r 15(6); Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28.
Accordingly, I am to treat the applications which led to the making of the orders the subject of the appeal as though they had not been previously determined.
History and pleadings of the action
In order to understand the issues it is necessary to set out the extended history of the action.
On 5 December 2012, the plaintiff commenced proceedings in the District Court.
The statement of claim was lodged on 25 March 2013.
In the amended statement of claim dated 13 June 2013 it is pleaded in pars 4 and 5:
The Plaintiff initially provided commercial painting services (the 'Services') to five (5) properties managed and controlled by the Defendant pursuant to written contracts. However, three (3) of these Contracts were terminated in or about September 2009 and the Defendant paid the Plaintiff the requisite termination fee as calculated under the relevant Contracts.
The two (2) remaining contracts were:
i)a contract dated 29 October 2008 and commencing 12 January 2009 for a term of 6 years in relation to the building known as Craigmont Waters Nursing Home located at Third Avenue, East Maylands, Perth, WA (the ‘Maylands Contract’); and
ii)a contract dated 29 October 2008 and commencing 26 January 2009 for a term of 6 years in relation to the building known as Craigcare Albany Park Nursing Home located at Beaufort Road, Albany, WA, (the ‘Albany Contract’).
It is pleaded at par 6:
Pursuant to the terms of the Contracts, the total Services to be provided by the Plaintiff and payment for the Services by the Defendant was allocated as follows:
| Year | % of work performed | % billed to defendant | % owing to plaintiff |
| 1 | 87.0% | 16.67% | 70.33% |
| 2 | 89.6% | 16.67% | 56.27% |
| 3 | 92.2% | 16.67% | 42.20% |
| 4 | 94.8% | 16.67% | 28.13% |
| 5 | 97.4% | 16.67% | 14.07% |
| 6 | 100% | 16.67% | 0% |
The amended statement of claim says in pars 7 and 8 that pursuant to the terms of the Maylands contract, the total cost of the services to be provided was $91,122 (on a GST exclusive basis) and pursuant to the terms of the Albany contract, the total cost of the services to be provided was $59,988 (on a GST exclusive basis).
In pars 10 and 11 it is pleaded:
The Services for Years 1 and 2 were provided by the Plaintiff and paid for by the Defendant under the Contracts.
The services for Year 3 were inadvertently and unintentionally not provided by the Plaintiff.
In pars 12, 13, and 14 the plaintiff says there was a telephone call in or about March 2012, a letter dated 30 April 2012 and a meeting on or about 18 May 2012 between the WA state manager of the plaintiff, Mr Lyndon Webb, and the chief executive officer (CEO) of the defendant, Mr John Gillett, regarding the non‑provision of the services.
In par 15 the plaintiff pleaded that at the meeting on or about 18 May 2012:
(a)Mr Gillett maintained the Defendant had no further liability to the Claimant [sic] under the Contracts;
(b)Mr Webb reiterated the Claimant's [sic] position as stated in paragraph 14) c) (that if the Contracts were terminated, then the Defendant would still be liable for the value of the work done to date less the amount paid); and
(c)no resolution was reached between the parties.
It is pleaded in pars 16, 17, 18 and 19:
As a consequence of the meeting, the Claimant [sic] considered the Contracts terminated by the Defendant.
Pursuant to the terms of the Contracts, in the event of termination, the Claimant [sic] is entitled to claim that amount of the value of the Services provided to date as remains unpaid.
For both the Maylands Contract and the Albany Contract, 56.28% of the total contract value remains unpaid at the end of Year 2.
Pursuant to the terms of the Contracts, the Plaintiff is entitled to adjust the unpaid amount by an adjustment factor as specified in the Contracts.
The plaintiff pleaded at par 20:
Based on the amount outstanding at the end of Year 2 and multiplied by the relevant uplift factor, the Plaintiff issued two (2) invoices both dated 27 June 2012 for the outstanding value of the Services provided as adjusted by the adjustment factor totalling $96,909.24 + GST as follows:
Particulars
i)Maylands Contract
| Invoice No | Total contract value | Uplift factor | Adj contract value | % due and payable | Amount due (excl GST) |
| 186036516 | $91,122 | 13.95% | $103,833 | 56.28% | $58,437.75 |
ii)Albany Contract
| Invoice No | Total contract value | Uplift factor | Adj contract value | % due and payable | Amount due (excl GST) |
| 186036515 | $59,988 | 13.95% | $68,356 | 56.28% | $38,471.49 |
At par 21:
Due to an arithmetical error, the invoices referred to in paragraph 20) above were incorrect and should have read $51,530 and $37,770 respectively.
Particulars
i)Maylands Contract
| Invoice No | Total contract value | Base cost adjustment | Adj contract value | Less paid | Amount due (excl GST) |
| 186036516 | $91,122 | $259 | $91,381 | $30,374 | $51,530 |
ii)Albany Contract
| Invoice No | Total contract value | Payment adjustment | Adj contract value | Less paid | Amount due (excl GST) |
| 186036515 | $59,988 | $4,017 | $64,005 | $19,996 | $37,770 |
The plaintiff claimed in pars 22 and 23:
In breach of the Contracts, the Defendant has failed, refused and/or neglected to pay the Plaintiff the sum of $89,300 +GST for the value of the Services provided that remain unpaid.
Alternatively, the Defendant has voluntarily received and accepted a benefit (being services provided by the Plaintiff) at the Plaintiff's expense and not paid the Plaintiff fair value for that benefit in circumstances where retention of the benefit, without payment of fair value, would be unconscionable.
A defence was filed on 12 July 2013. In the defence, the defendant admitted that it entered into the contracts. The defendant admitted pars 4, 5, 6, 7, 8, 9, 10, 12, 13, 14 and 15 of the amended statement of claim.
The defendant denied par 16 of the amended statement of claim and stated that the contracts were terminated at the time of the plaintiff's breach at the inception of year 3 when it failed to provide any services to the defendant.
The defendant denied par 17 and stated that if the defendant was liable to pay any outstanding fees to the plaintiff, which was not admitted, the amount was offset by the losses incurred by the defendant due to the plaintiff's breach of an essential term and failure to perform.
The defendant denied par 18 and stated that the plaintiff did not provide any further services to the defendant beyond year 2.
The defendant denied pars 19, 20 and 21 and relied on cl 16.6 of the contracts.
The defendant denied pars 22 and 23 of the amended statement of claim.
On 17 July 2013 the defendant filed a counterclaim against the plaintiff. It alleged that the plaintiff was in breach of contract for failing to provide the services from March 2010 to March 2012. It alleged it was forced to engage new contractors to provide paint maintenance, thereby suffering significant financial loss. It claimed payments in the sum of $126,263 for Albany and $1060.40 for Maylands.
On 5 August 2013 the plaintiff filed a reply and defence to counterclaim.
On 29 August 2013 the defendant filed an amended counterclaim. It amended the counterclaim by deleting the particulars of loss in the sum of $127,323.40. It is pleaded the defendant engaged a maintenance officer at the Maylands property for $32,110 and claimed that amount.
On 3 September 2013 the plaintiff filed a defence to the amended counterclaim.
By 17 April 2014 the plaintiff had not entered the matter for trial and a notice of default was issued. On 2 May 2014 the plaintiff entered the matter for trial.
A listing conference was held on 16 June 2014. An order was made for the plaintiff to bring an application for leave to amend the statement of claim on or before 4 July 2014. The plaintiff did not bring the application.
On 16 June 2015 the case was placed on the inactive cases list (as no document had been filed in the last year).
On 25 November 2015, the plaintiff made a chamber summons application, supported by an affidavit of Mr Brian Green, for an order that the case be removed from the inactive cases list.
On 15 December 2015 a consent order was made removing the case from the inactive cases list, that the defendant file and serve further and better particulars of its loss by 29 January and that the parties each make a list of the documents in that party's possession with an affidavit verifying the list.
On 14 January 2016 a consent order was signed by both parties. An order was made that the defendant's amended counterclaim be dismissed, the order for further particulars be vacated and costs be in the cause.
On 19 February 2016 the plaintiff applied for leave and for summary judgment for the sum of $89,300 plus GST. The plaintiff contends that, absent the counterclaim, there is no defence to the action.
On 29 March 2016 the defendant applied for leave to withdraw admissions contained in the defence and for leave to file and serve an amended defence, set-off and counterclaim, to the amended statement of claim.
An affidavit of Mr John Vincent Gillett, sworn 29 March 2016, was filed in support of this application. A minute of the proposed amended defence, set-off and counterclaim was annexed to Mr Gillett's affidavit.
On 13 June 2016 the learned registrar allowed the application for leave to amend the defence and to add the set-off and counterclaim. The learned registrar dismissed the plaintiff's summary judgment application.
The affidavit evidence
A number of affidavits were filed and I now turn to the substance of the affidavit evidence. I will deal with the affidavit evidence in chronological order.
Mr Green's affidavit of 25 November 2015
Mr Green is the solicitor employed by Havilah Legal, the solicitors for the plaintiff. In his affidavit in support of the application to remove the case from the inactive cases list he deposed, at pars 7 and 8:
At the listing conference on 16 June 2014, orders were made to the effect that the Plaintiff file an application for leave to further amend its statement of claim.
However, this did not occur, as the parties realised that they were at cross‑purposes as to which version of the subject Contract had been pleaded in the amended statement of claim, and therefore, were prepared to allow the matter to progress with that issue remaining live for subsequent resolution.
Mr Green said at par 12 of his affidavit that:
In this case there is no signed Contract but there exists a number of versions of the Plaintiff's standard form Contract which had been subject to various proposed and accepted amendments.
At par 13:
The informal discovery has assisted in narrowing which version may apply ...
At par 14:
However, it currently still remains in issue exactly what version of the Contract was agreed as between the parties.
Mr Green's affidavit of 19 February 2016
In his further affidavit in support of the plaintiff's application for summary judgment, Mr Green deposed at par 4:
On 8 January 2014, I received a letter from the defendant's lawyers, Mitry Lawyers, enclosing by way of informal discovery, copies of the unsigned contracts the defendant had in its possession in relation to the Albany and Maylands centres. Attached hereto and marked:
SG1 – is a true copy of the letter;
SG2 – is a true copy of the Albany contract; and
SG3- is a true copy of the Maylands contract
I refer to these contracts as Contract Version 1.
Mr Webb's affidavit of 25 February 2016
The plaintiff's application for summary judgment was supported by the affidavit of Mr Lyndon Webb, the project manager of the plaintiff.
Mr Webb was the State manager for Western Australia in or about 2007 until October 2009, and from around November 2011. Working with him was Mr Hayden Lister (Hayden), who was the sales and business development manager.
Mr Webb was involved in the negotiations to provide painting services to five of the defendant's aged care centres. The initial negotiations were with Mr Gordon Watt (Gordon), the defendant's former maintenance manager.
He said the quote was finalised and would have been presented in person by Hayden to Gordon on or around 27 October 2008. At par 19 he deposed:
In my experience this type of quote is common in the painting industry in that it provided a maintenance programme whereby the total quoted price for a painting service contract was payable by (in this case 6) equal annual instalments; the idea being that:
(a)the majority of the work is done in the first year (year 1, say, 80% ‑ 90%); and
(b)the preventative maintenance work is done in the remaining years (Years 2 – 6).
Mr Webb said at par 26:
I have read the documents annexed to Steve Green's affidavit and marked SG2 and SG3. These documents are our Contract for Albany and Maylands. I will refer to these documents being a set of our unamended terms as Contract Version 1.
At par 27:
On 25 November 2008 Hayden forwarded to me an email from the Defendant's CEO, Mr John Gillett (John), dated 24 November 2008 attaching the Defendant's proposed amendments to the Contract (Albany). I will refer to this document as Contract Version 1(a) annexed hereto and marked:
(a)LW2 a true copy of that email; and
(b)LW3 a true copy of Contract Version 1(a).
At par 28:
I attended a meeting with John on 27 November 2008 to discuss the proposed changes to the Contract, some of which were agreed and other [sic] were not …
At par 30:
I cannot remember exactly what further versions of the Contract there may have been, though I know I would have discussed the same with Hayden and been instrumental in agreeing to or not agreeing to proposed changes.
At par 31:
That being the case, the Plaintiff does hold another version of the Contract which seems to incorporate some of the changes proposed by the Defendant as follows:
(a)Albany (PN0027) dated 26 January 2009 (on the cover page) with a commencement date of 26 January 2009 in Schedule 1; and
(b)Maylands (PN0025) dated 12 January 2009 (on the cover page) with a commencement date of 12 January 2009 in Schedule 1.
I will refer to these documents as Contract Version 2 annexed hereto and marked:
(c)LW4 as a true copy of Contract Version 2 for Albany; and
(d)LW5 as a true copy of Contract Version 2 for Maylands.
Mr Webb said that the years 1 and 2 painting services were provided to Albany and Maylands and invoices were issued.
At par 42 he deposed:
For reasons that are not clear to me, other that there seems to have been some inadvertent error and communication breakdown on the part of the Plaintiff, the Year 3 services, which were due in around early 2011, had not been provided for the 2 remaining centres.
He said he spoke to Mr Gillett in or about March 2012, wrote to him on 30 April 2012 and met with him. At par 46 he deposed:
On or about 18 May 2012, I met with John to discuss the situation. I mentioned that it was the Plaintiff's preference to remedy the situation and make amends for the missed service. However, John maintained the view that the Defendant had no liability to the Plaintiff and that the Plaintiff had breached the painting services agreement by not providing the Year 3 services. I disagreed with John and advised that the Defendant would still be liable for the difference between the value of the work done to date less the 2 instalment payments the Defendant had made to date. Unfortunately, no resolution was reached.
On 27 June 2012 the plaintiff prepared final invoices for the two centres. LW15 is invoice number 186036515 for Albany for the amount of $38,471.49 (excluding GST). LW16 is invoice number 186036516 for Maylands in an amount of $58,437.75 (excluding GST). These invoices have not been paid.
Mr Gillett's affidavit of 21 April 2016
The defendant's application for leave to amend the defence to withdraw admissions and to add a set‑off and counterclaim was supported by the affidavit of Mr Gillett, the CEO of the defendant.
Mr Gillett said in his affidavit sworn 21 April 2016 at par 8:
The informal discovery has revealed a number of draft contracts, none of which were executed (SG2, SG3, LW3, LW4, LW5).
At par 10 he deposed:
For its part the Defendant mistakenly believed, when it pleaded to paragraph 5) of the Amended Statement of Claim, (and all of the other paragraphs that use the defined terms 'the Maylands Contract', 'the Albany contract' and 'the Contracts'), that the Plaintiff had pleaded the initial versions of the Contracts sent by the Plaintiff to the defendant dated 29 October 2008 (SG2 and SG3).
At pars 11 and 12 he said:
However, following informal discovery, the mediations, and communications between the parties, the Defendant considers that the draft Contracts dated 29 October 2008 (SG2 and SG3) were not entered into, and that no version of the draft Contracts exchanged between the parties were entered into.
The Defendant has not sought to amend its defence until recently because until early to mid-2015 the parties had been attempting to resolve the proceeding through mediation, informal discovery and without prejudice negotiations, and the proceeding was inactive during the second half of 2015.
He said the defendant now wished to properly plead its defence, and to add a set‑off and counterclaim as set out in the minute. The minute sets out an amended defence that denies pars 4 - 10 inclusive, 14 and 17 - 23 inclusive of the amended statement of claim. At par 2A it pleads the contracts. The set-off and counterclaim seeks restitution in the amount of the purported termination payments in respect of the defendant's Como, Melville and the St James premises.
At pars 29, 30 and 31 he deposed:
The plaintiff commenced the provision of the Services at:
(a)Como, Maylands and Melville on or about 9 December 2008;
(b)Albany on or about 12 January 2009;
(c)St James on or about 2 February 2009.
No written contract was ever signed by the Plaintiff or the Defendant in relation to any of the Services provided by the Plaintiff.
The Defendant paid the Plaintiff's invoices for Albany and Maylands (LW10 to LW13) relating to the first 2 years of Services performed at those sites.
He annexed the minute of proposed amended defence, set-off and counterclaim to the amended statement of claim to his affidavit (JG1).
Mr Green's affidavit of 28 April 2016
In a further affidavit in support of the plaintiff's application, Mr Green refers to Mr Gillett's affidavit and emails between the respective solicitors.
He annexed email correspondence between the solicitors from 2 July 2014 that confirms that the plaintiff relies on what is referred to as version 2 of the contracts. The correspondence confirms the defendant referred to version 1 of the contracts in its defence.
Defendant's application for leave to amend defence to withdraw admissions and to add a set-off and counterclaim
First, I turn to consider whether or not the defendant should be granted leave to amend its defence so as to withdraw the admissions and add a set-off and counterclaim.
In Essex Securities Pty Ltd v Lunt [2006] WASC 58, Master Newnes said [16]:
It is clear that at an interlocutory stage an amendment of a pleading which has the effect of withdrawing an admission may be allowed. There is no principle that an admission may or may not be withdrawn and the Court has a broad discretion to permit or refuse such an amendment, with the ultimate objective being the attainment of justice: Hutton v Meston [2004] WASCA 178; Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327 at 334.
I am guided by the general principles to be applied upon an application to withdraw an admission in a pleading. These were set out by the Court of Appeal in Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 [19], as follows:
1.The court has a broad discretion to permit or refuse an amendment which has the effect of withdrawing an admission; the ultimate question must always be what is in the interests of justice in the circumstances of the case.
2.But it is a serious matter to make an admission in a pleading and ordinarily a party should not be permitted to withdraw an admission in a pleading without good cause.
3.In determining whether or not to permit an amendment to withdraw an admission, relevant considerations will generally include:
(a)the circumstances in which the admission was made;
(b)the reason it is sought to be withdrawn;
(c)the significance of the admission;
(d)the time for which it has stood on the record; and
(e)any prejudice that is likely to be suffered by the other side that cannot appropriately be compensated by an order for costs.
The defendant's principal submission is that the evidence now establishes the parties did not agree to the terms of any written contract as pleaded. The defendant contends to determine the matter on the present pleadings would be to determine the case on a basis which is now known to the parties and to the court to be a false basis.
The defendant's position is that version 1 of the respective contracts (SG2 and SG3) was subject of a counteroffer (LW3) referred to as version 1(a). Version 1(a) was not entered into by the parties and there is no evidence that version 1, 1(a) or 2 were entered into by the parties. The defendant said no written terms were agreed to for the work done by the plaintiff for the defendant.
Accordingly, the defendant contended that it should be able to withdraw its admissions that there were written contracts. Following on from that, it should be able to add a set-off and counterclaim.
The defendant said the admissions were made at a time before discovery was given.
The defendant submitted, as was apparent from the affidavits, that the parties seemed to have been unsure or uncertain as to what the position was with respect to a written contract.
The defendant contended there was no particular prejudice to the plaintiff because its principal witness is Mr Webb and he has given his account in his affidavit of 25 February 2016.
This is not a case of fading memories because Mr Webb has given his account recently.
In respect of the minute of proposed amended defence, the defendant submitted that it puts, plainly enough, what the defendant's position is in respect of the claim. The defence articulates the defendant's position with respect to the contracts.
The plaintiff contended that the defendant should not be allowed to withdraw admissions that have been on the record for 33 months.
It says it would not be just to allow the defendant to re‑frame its case so significantly and the defendant should be held to the admissions. It contends the defendant has not provided a sufficient explanation as to why the admissions were made.
The plaintiff said it would now suffer prejudice because it assumed years ago that all these matters were no longer in issue between the parties. The plaintiff will now have to gather evidence and interview witnesses whose memories will be very stale.
The plaintiff further contends that the proposed minute to amend the defence and to add a new set-off and counterclaim is defective. The written submissions filed on 8 March 2017 state that the proposed amendment to the defence fails to identify the agreement between the parties, the communication of the key terms alleged and the factual basis giving rise to various terms sought to be relied on by the defendant. Further, it contends the allegation that the contract can only be inferred by post‑contractual conduct is incompatible with the defendant's evidence in the application. In addition, it contends that pars 12, 13 and 14 plead legal conclusions with insufficient facts alleged to understand the basis of the defendant's claim, or plead to it.
Analysis
It is clear that the plaintiff did not provide services in year 3 and 4 at the defendant's premises in Albany and Maylands.
The affidavits reveal there are a number of versions of the contracts, none of which have been executed by the parties.
The evidence shows that the plaintiff was not in possession of version 1 of the contracts (SG2 and SG3) when it proceeded with its claim. The plaintiff relied on version 2 of the contracts (LW4 and LW5) when it brought its claim.
The defendant relied on version 1 of the contracts (SG2 and SG3) in its defence. There is no evidence that version 2 of the contracts ever came to the defendant.
The plaintiff now contends that it relies on version 1 of the contracts (SG2 and SG3). The plaintiff relies on version 1 because version 1 of the contracts was admitted by the defendant. Counsel for the plaintiff contends that there was no material difference between the versions of the contracts as to liability and, accordingly, it could now rely on version 1 of the contracts (SG2 and SG3).
The plaintiff has not chosen to amend the pleadings to refer to the version of the contracts that it now relies on, being version 1 (SG2 and SG3).
In my view, on balance, there are circumstances which permit the defendant to withdraw the admissions made in its defence.
First, Mr Webb and Mr Green refer to the different draft versions of the contracts. Mr Webb refers to a meeting on 27 November 2008 with Mr Gillett to discuss proposed changes to the contract. Mr Gillett refers to the different draft versions of the contracts. He has provided an explanation as to the reasons why the admissions were made and now wishing to withdraw them. He says the defendant thought the plaintiff was pleading version 1 of the contracts (SG2 and SG3). At the time the defence was filed in July 2013, the parties had not given discovery. The informal discovery revealed a number of draft contracts none of which were executed (SG2, SG3, LW3, LW4, and LW5). No written contract was ever signed by the plaintiff or the defendant in relation to the services provided by the plaintiff. Having regard to those circumstances, in my view, there is uncertainty as to the written contracts dated 29 October 2008 agreed between the parties as pleaded in the amended statement of claim for the Maylands and Albany premises.
Secondly, I accept that after further consultation between the parties and informal discovery, it became apparent that the parties were relying on different versions of the contracts, none of which have been signed by the parties. The parties have not undertaken formal discovery in this matter.
Thirdly, in my view, it is not to the point that the contracts are similar in nature. There are differences between the various amended versions of the contracts annexed to the affidavits.
Having regard to the evidence before me, I am of the view that not to allow the withdrawal of admissions would be to ask the court to determine the matter on a false basis.
Courts are averse to doing so, and I refer to Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 [160]. In that case, Heydon JA said:
In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed.
I turn now to the issues of delay and prejudice.
In my assessment, Mr Gillett has explained the reasons for the delay in seeking to amend the defence, including that the proceedings were inactive during the second half of 2015.
Moreover, it seems there was considerable delay in the progressing of this matter by both parties, as is evident by the extended history referred to earlier.
In those circumstances I do not consider the plaintiff's submission that the evidence to be gathered will now be stale to be compelling. Mr Webb is the principal witness for the plaintiff and he has turned his mind to the matters recently.
I turn now to the plaintiff's submission that the defendant should not be given leave to amend its defence and to add a set-off and counterclaim. The plaintiff relied on Nyoni v Paterson [2012] WASCA 171. In that case the Court of Appeal set out the principles governing the application to strike out the statement of claim and dismiss the action as follows [33] ‑ [38]:
First, the remedy of summary disposal of a claim by the striking out of the statement of claim is to be used with caution and only in the clearest of cases: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 129 - 130, 138.
Secondly, the decision under review is a discretion in a matter of practice or procedure. As drastic and final as the consequence may be for the party affected, it is important for an appeal court to limit its intervention to cases where it is shown that the primary decision maker has fallen into some error of principle in the exercise of his discretion: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536.
Thirdly, because the appellant is a litigant in person, care must be taken to ensure that this significant disadvantage does not deprive him of the opportunity to have his claim, if any, determined according to law. Courts should approach the peremptory determination of litigation by an in person litigant with special care, to ensure that within the possibly ill‑expressed and unstructured statement of claim, there is no viable cause of action: Wentworth v Rogers (No 5) (536).
Fourthly, after allowing for the disadvantage an in person litigant suffers, it is still necessary, out of fairness to defendants, that the statement of claim is drawn so that when the opponent pleads to it, the pleadings will define with clarity and precision the issues or questions which are in dispute between the parties and fall to be determined by the court. A statement of claim must state all material facts to support the claim to relief so that fair and proper notice is given to the defendants to enable them to frame and prepare their own case for trial. Such clarity and precision is also necessary to inform the court about the precise matters in issue between the parties which are to be determined by the court and which set the limits of the action.
Fifthly, clear and precise pleadings are necessary because they form a permanent record of the issues and questions raised in the action and decided so as to prevent future litigation upon matters already adjudicated upon between the litigants: Opperman v The State of Western Australia [2011] WASC 25 [38] (EM Heenan J). Certain Rules of the Supreme Court are concerned with the content of pleadings. Order 20 requires a statement only of the material facts upon which the party relies and not the evidence by which the facts are to be proved (O 20 r 8(1)) and which will avoid the opponent being taken by surprise (O 20 r 9(1)(b)).
Sixthly, the court ought not to grant leave to amend a pleading into a form which ought to be struck out due to defective amendment: Hooker Corporation Ltd v Commonwealth of Australia (1986) 65 ACTR 32, 38.
In my view, the plaintiff's submission that leave to amend should not be given cannot be accepted. This case concerns a proposed amended defence whilst the above case concerned a statement of claim.
In my assessment this is not a case where the pleadings have been shown to be unsustainable at law. In the proposed amended defence the defendant denies it entered into written contracts as alleged in the amended statement of claim. The defendant sets out the material facts upon which it relies in the proposed minute. I have considered the legal principles concerning the admissibility of subsequent conduct in relation to the identification of an informal contract and its terms together with inferred agreements as set out in Fazio v Fazio [2012] WASCA 72 [188] ‑ [195].
In all the circumstances, I consider it is in the interests of justice for the defendant to be given leave to withdraw the admissions and to add a set-off and counterclaim, and that all matters in dispute between the parties can be heard together.
Summary judgment application
I turn now to the summary judgment application.
This is the plaintiff's application for summary judgment pursuant to O 14 of the Rules of the Supreme Court 1971 (RSC). Such an application must be supported by an affidavit verifying the facts on which the claim is based: O 14 r 2(1) RSC.
It is not an application for judgment on the admissions made by the defendant pursuant to O 30 r 3 of the RSC. Accordingly, despite the plaintiff's oral submissions relying on the admissions made by the defendant, it did not bring the application pursuant to O 30 r 3 of the RSC.
In oral argument, counsel for the plaintiff concedes that the summary judgment application would fall away should I allow the defendant's application for leave to amend the defence to withdraw admissions and to add a set-off and counterclaim.
Nevertheless, I am required to determine the plaintiff's application for summary judgment.
A useful summary of the principles to be applied was recently provided by the Court of Appeal in Sutton Investments Pty Ltd v Realistic Investments Pty Ltd[2017] WASCA 14:
The principles to be applied on an application for summary judgment are well-established. Summary judgment will be granted only when there is no real question to be tried. The power to order summary judgment is one that should be exercised with great care: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24], [53] - [55].
The defendant submits the application is not supported by an affidavit verifying the facts on which the claim is based.
The defendant contends that the affidavit of Mr Webb did not verify the claim in three respects.
First, the defendant submits there is no evidence that a written contract dated 29 October 2008 was agreed at about that date for the Maylands premises and Albany premises, as is pleaded in par 5 of the amended statement of claim. Counsel for the defendant referred me to pars 27, 28 and 30 of Mr Webb's affidavit.
Second, the defendant contends there is no evidence as to why there are different adjusted contract values or different amounts due on the two contracts. The invoices set out at LW15 (Albany) and LW16 (Maylands) do not explain how the amounts are arrived at. There is no verification to support the claims in par 21, that is, there is no evidence as to why there are different adjusted contract values (base cost adjustment for Maylands; payment adjustment for Albany) or different amounts due on the contracts.
I note that both invoices refer to 13.95% for Albany and Maylands.
Third, the defendant contends that the percentage figure relied on in the Maylands invoice LW16, being 56.28%, does not accord with the percentage in the table expressed as a percentage of the total contract value for the Maylands contract in version 1 of the contract (SG3) that is expressed as 54.73%.
In all the circumstances, I accept the defendant's submissions in respect of all three matters. Mr Webb has not verified the facts with respect to the claim in these three respects.
In my view, this is not a matter that could be overcome by a short hearing as to quantum, as counsel for the plaintiff contends.
As the application does not verify the facts in three respects as required by O 14 r 2(1) of the RSC, the application for summary judgment must be declined.
In any event, I consider that the summary judgment application must be declined. I rely on the general principles with respect to summary judgment applications and my reasons granting leave to the defendant to amend its defence so as to withdraw the admissions and add a set-off and counterclaim.
Conclusion
For the reasons I have set out the appeal is dismissed.
Costs
I turn now to the issue of costs. The defendant seeks the costs of the appeal should it be successful.
An award of costs to a party is discretionary to be exercised on the basis of principle. Ordinarily, costs follow the event.
However, in this case, the genesis of the plaintiff's summary judgment application was the order made by consent in January 2016 that the defendant's amended counterclaim be dismissed.
The plaintiff then sought leave to bring the summary judgment application.
The defendant then sought leave to amend the defence to withdraw the admissions and to add a set-off and counterclaim.
In the hearing of the appeal, the plaintiff concedes that the summary judgment application falls away should I give leave to amend the defence to withdraw the admissions and to add a set-off and counterclaim.
Having regard to the manner in which this action has been progressed, it is my assessment that the costs of this appeal should be in the cause of the action.
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