Howlett v Blissenden
[2010] TASSC 27
•21 June 2010
[2010] TASSC 27
COURT: SUPREME COURT OF TASMANIA
CITATION: Howlett v Blissenden [2010] TASSC 27
PARTIES: HOWLETT, Colin Horace
HOWLETT, Roslyn Gladys
v
BLISSENDEN, Robert John
KEAL, Phillip Ian
PALERMO, John
TAS LAW PTY (ACN 096 116 200)
FILE NO/S: 1146/2008
DELIVERED ON: 21 June 2010
DELIVERED AT: Hobart
HEARING DATE: 16 April 2010
JUDGMENT OF: Tennent J
CATCHWORDS:
Procedure – Supreme Court procedure – Tasmania – Procedure under rules of court – Associate Judges – Nature of appeals from Associate Judges.
Supreme Court Civil Procedure Act 1932 (Tas), ss45 and 191B.
Allesch v Maunz (2000) 203 CLR 172, applied.
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; Contender 1 Ltd v LEP International Pty Ltd (1988) 82 ALR 394, referred to.
Aust Dig Procedure [281]
Procedure – Supreme Court procedure – Tasmania – Procedure under rules of court – Amendments – Statement of claim.
Supreme Court Rules 2000 (Tas), rr227, 258, 259 and 427.
Day v William Hill (Park Lane) Ltd [1949] 1 All E R 219, referred to.
Aust Dig Procedure [276]
REPRESENTATION:
Counsel:
Appellant (Defendants): S B McElwaine
Respondent (Plaintiffs): P W Tree SC
Solicitors:
Appellant: S B McElwaine
Respondent: Butler McIntyre & Butler
Judgment Number: [2010] TASSC 27
Number of paragraphs: 30
Serial No 27/2010
File No 1146/2008
COLIN HORACE HOWLETT and ROSLYN GLADYS HOWLETT v
ROBERT JOHN BLISSENDEN, PHILLIP IAN KEAL, JOHN PALERMO
and TAS LAW PTY (ACN 096 116 200)
REASONS FOR JUDGMENT TENNENT J
21 June 2010
The plaintiffs have sued the defendants for damages for breach of contract and/or for negligence arising out of a professional relationship which existed between about May 1998 and about May 2008. The writ was issued on 23 December 2008 and a statement of claim filed on 18 June 2009. The solicitors for the defendants applied to strike out the statement of claim. On 23 September 2009, before the strike-out application was heard, the solicitors for the plaintiffs sought leave to amend the statement of claim. Both applications were heard by the Associate Judge on 17 December 2009, and, on that day, an order was made giving the plaintiffs leave to amend the statement of claim in the manner sought, and dismissing the strike-out application. This is an appeal by the defendants from that decision, insofar as it relates to the order permitting amendment. Attached to these reasons is a copy of those pages of the statement of claim, as amended, with the amendments underlined, to which this appeal relates, that is pars2 – 6.
Background to proceedings
The substantive proceedings out of which this appeal arises are in fact the most recent of three interdependent sets of proceedings. The plaintiffs are the plaintiffs in all three. As at 1987, they carried on business as earthmoving contractors.
In or around March 1987, the plaintiffs agreed with a Donald Hurburgh that they would carry out some works at a subdivision at Blackmans Bay. The parties agreed some terms of their arrangement and the work commenced. Some invoices were presented by the plaintiffs and some part of the amounts claimed were paid. However, a dispute arose. In September 1987, the plaintiffs sued to recover what was alleged to be monies due. Their solicitors, for the purpose of those proceedings, were the firm of Ogilvie McKenna. The writ issued had a statement of claim attached. The body of the statement of claim contained no mention of any entitlement to interest on the amount claimed. However, in the prayer for relief at the end of the statement of claim, there was a claim for interest on the amount claimed, pursuant to the Supreme Court Civil Procedure Act 1965 [sic]. In 1990, the plaintiffs changed solicitors. They instructed the firm of Dobson, Mitchell & Allport ("DMA").
In July 1991, the solicitors for the plaintiffs applied for leave to amend the statement of claim to add a defendant. Leave was granted and the statement of claim amended. The statement of claim, as amended, did not plead any entitlement to interest and the only reference to interest was in the prayer for relief which was couched in similar terms to those in the original statement of claim.
The plaintiffs became dissatisfied with the work being done on their behalf by DMA. In 1998, the plaintiffs instructed a third set of solicitors, being a firm then known as Avery Partners. That firm acted on behalf of the plaintiffs through to in, or about, May 2008, at which time the plaintiffs instructed their present solicitors. On 13 July 1999, the defendants in the 1987 proceedings applied to have those proceedings dismissed for want of prosecution. They were successful and the proceedings were dismissed on 3 December 1999. The plaintiffs successfully appealed that decision, and a judgment, entered for the original defendants as a consequence, was set aside by order made on 14 December 2000.
On 15 February 2002, the plaintiffs again sought leave to amend their statement of claim, this time to include a new paragraph, by which a claim for interest, said to arise pursuant to the terms of the parties' contract, was added. They also sought to amend the prayer for relief to reflect the new claim. That application to amend the statement of claim was dismissed on 5 July 2002.
In 2004, the plaintiffs applied again for leave to amend the statement of claim, to include the interest claim. They contended that, as a consequence of an amendment to the Supreme Court Rules 2000 ("the Rules"), the basis upon which their 2002 application had been dismissed no longer existed. Following a hearing, the court declined to exercise its discretion such as to allow the plaintiffs to amend, and the application was dismissed. At some point not long thereafter, the dispute between the parties to the 1987 proceedings was settled. I infer it was settled absent a claim for interest.
On 15 September 2004, the plaintiffs sued DMA, claiming damages for professional negligence and breach of contract. That action arose out of an asserted failure by that firm to advise the plaintiffs to seek interest in their proceedings against Hurburgh in a timely fashion and, indeed, include it in the pleadings. There was also an assertion that the solicitors had failed to advise the plaintiffs that there was no claim available on their part against two defendants, by then also named in the 1987 proceedings. A statement of claim was delivered in 2007, and a defence filed. The defence raised a limitation defence based on the assertion that DMA had ceased to act in or about May 1998, and that therefore the proceedings were out of time.
As set out above, in or about May 2008, the plaintiffs instructed new solicitors, namely the firm of Butler, McIntyre & Butler. Those new solicitors sought an amendment to the 2007 statement of claim in an effort to circumvent the limitation defence. The Associate Judge permitted the plaintiffs to amend their statement of claim in the proceedings against DMA. The pleadings progressed to a reply. The solicitors for DMA applied, in the first half of 2009, to have that reply struck out. On 29 June 2009, the Associate Judge ordered that the reply be struck out.
By a writ lodged on 23 December 2008, the plaintiffs had also sued the defendants in the present proceedings, they being, in effect, what had been the firm of Avery Partners. The plaintiffs claimed damages for breaches of contract and/or negligence arising from asserted failures to advise about relevant limitation periods and to issue proceedings in a timely way. A statement of claim in those proceedings was filed on or about 18 June 2009. On 8 July 2009, the solicitors for the defendants filed an interlocutory application, pursuant to which they sought to have the statement of claim struck out, either in whole or in part. On 23 September, the plaintiffs sought leave to amend the statement of claim, which application resulted in the order of the Associate Judge now appealed from.
Defendants' grounds of appeal
The defendants assert that the Associate Judge erred in the exercise of his discretion to grant leave to amend because the proposed amended statement of claim:
"(a)is liable to be struck out, in whole or in part, as likely to prejudice or delay the fair trial of this action contrary to Rule 258;
(b)is liable to be struck out as failing to disclose a reasonable cause of action contrary to Rule 259;
(c)fails to contain a statement of each of the material facts relied upon in order to establish a cause of action contrary to Rule 227; and
(d)fails to give reasonably express notice to the defendants of all grounds of action intended to be relied upon by the plaintiffs, contrary to Rule 227."
Nature of an appeal from a decision of the Associate Judge
The Supreme Court Civil Procedure Act 1932 ("the Act"), s191B, confers a right of appeal to a single judge of the Court from a decision of the Associate Judge. By the Act, s191B(4), a single judge has the same jurisdiction and powers as the Full Court does in dealing with an appeal from a single judge. Those powers are relevantly contained in the Act, s45(1). That provides as follows:
"45 — (1) A Full Court, on the hearing of any appeal from any judgment, order, or other determination (whether final or otherwise) of a judge, shall not reverse or vary any adjudication of the judge which is, or purports to be, only the exercise of a discretion which the judge was entitled by law to exercise, unless it appears to the Full Court that –
(a)the judge has, in fact, declined or failed to exercise the discretion;
(b)the judge has proceeded on a wrong principle or otherwise contrary to law, or on irrelevant or insufficient materials, or has misapprehended the facts or has failed to consider any material fact;
(c)the adjudication is founded wholly or in part on an erroneous finding of fact or an erroneous determination in point of law; or
(d)by reason of further evidence received by the Full Court in exercise of the powers conferred by section 48, or some special circumstance, the adjudication should be reversed or varied."
The Act, s46, also provides that the appeal is to be by way of rehearing.
Both counsel referred to the decision of the High Court in Allesch v Maunz (2000) 203 CLR 172, where at [23] Gaudron, McHugh, Gummow and Hayne JJ said:
"23For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand." (footnotes omitted)
Counsel both accepted this passage identified the correct approach to an appeal by way of rehearing.
Counsel for the defendants relied on subpar(b) of s45(1). The error he identified was that the Associate Judge proceeded on wrong principles or otherwise contrary to law. He submitted he need establish no more than that to succeed.
Counsel for the plaintiffs, however, submitted that a further consideration applied having regard generally to the approach of courts to interference with discretionary judgments in respect of matters of practice and procedure. He submitted that the Court should be cautious to intervene in respect of a matter of practice and procedure, particularly in circumstances in which no substantive rights were determined, and no substantial injustice had occurred as a consequence of the judgment appealed from. He relied for this submission on remarks of Gibbs CJ, Aickin, Wilson and Brennan JJ in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, where, at 177, their Honours said:
"Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v Electronic Industries Ltd (1978) VR 431, at p 440; on the other hand, De Mestre v A D Hunter Pty Ltd (1952) 77 WN (NSW) 143, at p 146. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318, at p 323:
'… I am of opinion that, … there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.'
See also, Brambles Holdings Ltd v Trade Practices Commission [1979] FCA 80; (1979) 40 FLR 364, at p 365; 28 ALR 191, at p 193; Dougherty v Chandler (1946) 46 SR (NSW) 370, at p 374. It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration."
Those remarks were referred to with approval in Contender 1 Ltd v LEP International Pty Ltd (1988) 63 ALJR 26, a decision of a differently constituted bench of the High Court.
Counsel for the defendants submitted that there was no justification for adding that "gloss" on the powers of the Court, as the Act, s45(1), was perfectly clear. The Act, s45(1), provides for the circumstances in which an appellate body may interfere with a discretionary judgment of a court below. It draws no distinction between an appeal from a discretionary judgment dealing with a substantive issue, and one dealing with a matter of practice and procedure. It does not for example impose different tests. In relation to both, an error must be demonstrated for an appeal to succeed. It seems to me that counsel for the plaintiffs is seeking to elevate the remarks of the judges of the High Court to an invariable rule to be applied. All that their Honours said was that there was no serious dispute between the parties that appellate courts should exercise particular caution in reviewing decisions pertaining to practice and procedure, and that it was safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration. They did not accept the submission made by one party to the effect that there were two specific cumulative bars operating to guide appellate courts, that is, firstly that error be established, and secondly, that it be established that the decision appealed from created a substantial injustice to a party.
The approach advocated by the High Court is not in my view inconsistent with the terms of the Act, s45(1).
Discussion
The application with which the Associate Judge was primarily dealing was an application for leave to amend a statement of claim pursuant to the Supreme Court Rules 2000 ("the Rules"), r427. He had a discretion as to whether to allow the amendments sought. The Rules provided that such discretion might be exercised in favour of an amendment for the purpose of determining the real question in controversy between the parties. That question, insofar as the parties were dealing with the early paragraphs of the statement of claim, was whether the plaintiffs could establish the defendants in the 1987 proceedings owed them a certain sum of money, and whether, if they did, the plaintiffs were entitled to interest on that money.
The reasons for decision of the Associate Judge were delivered orally and later transcribed. On page 2 of the transcription, his Honour set out, in the second and third paragraphs, an analysis of the plaintiffs' claim in the following terms:
"Unless the plaintiffs can show that they had a prospect of recovering interest from Mr Hurburgh, their claim in the present proceedings in respect of lost interest must necessarily fail. It follows that the plaintiffs must plead the facts which give rise to the alleged initial liability of Mr Hurburgh to pay interest. Of course, without an indebtedness for the principal there could be no liability to pay interest.
The plaintiffs' plea as to the indebtedness to which the interest is said to attach is that Mr Hurburgh agreed to pay the plaintiffs' accounts 32 days after they had been rendered. Those accounts were rendered. There was a shortfall in the amount of payments made. The shortfall as I have said being in the order of $18,000. The plaintiffs' plea incorporates by reference the initial claim against Mr Hurburgh in the proceedings commenced against him in 1987. The claim in that action alleges that the liability arose by a contract comprised in part by the standard contract terms known AS 2124. Those terms do not impose any liability to make payments based solely upon the issue of accounts by the contractor. The liability under AS 2124 to pay arises on the issue of payment certificates by the contract superintendent. There are no allegations that certificates issued or that certified amounts were left unpaid."
No issue was taken by counsel with this analysis. His Honour then summarised the plaintiffs' case at the top of page 3 in the following terms:
"The plaintiffs' case is that the written contract which is comprised by the invitation to tender, the tender itself, the written terms of acceptance, and AS 2124, when properly construed contains expressly the pleaded terms. In particular, an obligation to pay arose following the submission of accounts. There is no plea that the payment term relied upon exists by implication."
Counsel for the plaintiffs accepted that was a fair representation.
The Associate Judge then identified what he said was the defendant's argument in relation to the pleading. He identified it as an asserted failure to plead where, in the documents referred to, the alleged express terms were said to be. His Honour concluded that such identification was not a matter for pleadings. He said:
"Here, however, the submission is that the plea is defective for failure to identify the parts of the written documentation relied upon as containing the express written terms alleged. As I have said identification is not part of the cause of action and so it does not need to be included in the plea. No other reason for withholding leave was advanced."
He then allowed the amendments. On the appeal, counsel for the defendants said this characterisation of his objection to the pleadings was not correct. That was not a ground of appeal, nor was there any material before me to establish what submissions were put before the Associate Judge. The matter was not pursued.
Counsel for the defendants confined his contentions to those amendments which dealt with the claim against the defendants in the 1987 action, that is, to those in pars2 to 6 of the amended statement of claim. The substance of his approach was that the statement of claim, as amended, failed in material ways to comply with the Rules, because it failed to plead all necessary material facts to establish the relevant matters against those original defendants. He submitted that it was trite law that leave to amend a pleading should not be given where that pleading did not comply with the Rules.
The Rules, rr227(1) and (3), 258 and 259, relevantly provide:
"227 Statements in pleadings
(1) A pleading is to —
(a)be as brief as the nature of the case allows; and
(b)contain only a statement of all the material facts in summary form on which the party relies but not the evidence by which those facts are to be proved.
(2) …
(3) Every pleading is to be expressed so as to give reasonably explicit notice to any other party of all grounds of action or all defences on which the party pleading intends to rely at the trial.
258 Striking out certain matters
(1) The Court or a judge may order to be struck out or amended in any endorsement or pleading any matter that –
(a)may be unnecessary or scandalous; or
(b)may tend to prejudice or delay the fair trial of the proceeding.
(2) If the document which contains the matter to be struck out or amended is filed, the Court or a judge may order that the document be removed from the file.
(3) If an order is made under subrule (1), the Court or judge may order the costs of the application to be paid as between solicitor and client.
259 Striking out pleading
If a pleading does not disclose a reasonable cause of action or answer or shows that the cause of action or defence is frivolous or vexatious, the Court or a judge may order —
(a)that the action be stayed or dismissed or the pleading be struck out; and
(b)that judgment be entered accordingly."
In their statement of claim, the plaintiffs pleaded at par2 that the contract relied upon in the 1987 claim was one which was in writing and dated 12 March 1987. There was no plea that any asserted contract was, for example, partly in writing and partly oral. Prior to the hearing of the application for leave to amend, counsel for the defendants sought production of any documents upon which the plaintiffs proposed to rely as constituting that contract. The documents were produced. Counsel submitted that, as these documents were said to constitute the document referred to in the pleading, it was open to him to rely on them and for, indeed, both the Associate Judge and this Court to have regard to them, (see Day v William Hill (Park Lane) Ltd [1949] 1 All ER 219). Counsel for the plaintiffs did not cavil with this proposition. These were the documents identified by the Associate Judge as set out in par[19] above. They were the invitation to tender (106 of the appeal book), the tender itself (159 - 161), the written terms of acceptance of the tender (163 – 164), and the document described as AS 2124 (107 - 158).
Counsel for the defendants went through the amended pleading by reference to those documents. He identified inconsistencies between the pleadings and the documents. He also identified matters pleaded which were not supported by any express term of any document produced. As counsel for the plaintiffs suggested, what counsel for the defendants appeared to be doing was arguing his case at trial. Indeed, it did seem to be so. However, the exercise was designed to demonstrate that the pleadings as they were amended, while on the face of them they appeared to establish a cause of action in contract, did not, as they stood, establish one by reference to the documents produced and said to constitute the contract.
It might be argued that the production of the documents should have made clear to the defendants just what the plaintiffs' case was, and that therefore the pleadings, incorporating those documents, complied with r227, in particular r227(3). However, counsel for the defendants argued that, if the documents produced constitute the contract between the parties, because of the blanks in AS 2124 and inconsistencies between the documents themselves, it is doubtful the plaintiffs could sustain a cause of action in contract such as to justify the relief claimed, and certainly not a claim for interest at 18 per cent. He further submitted that, because of those difficulties, it could not be said that the plaintiffs have complied with r227.
Counsel for the plaintiffs submitted that I should be cautious about interfering with the decision of the Associate Judge. He submitted there was no injustice to the defendants. All that might follow is an application for particulars and, if counsel for the defendants is correct in his interpretation of the documents and pleadings, the plaintiffs will fail at trial in relation to one aspect of their claim. He pointed out that there were six claims against the defendants, of which this was only one. The other five were not dependent upon the first part of the statement of claim. While that may very well be correct, what it ignores is that that part of the claim, to which the present argument is directed, comprises by far the bulk of what is potentially a very large claim.
Conclusion
There can perhaps be no dispute that work was done by the plaintiffs for Hurburgh, that accounts were rendered for the work done, and that an amount was paid by Hurburgh in reduction of those accounts. However, the plaintiffs' present Hurburgh-related claim is dependent upon the establishment of the existence of a contract with particular terms, which terms entitle the plaintiffs to claim a particular principal sum and interest on that sum. The plaintiffs have identified by their pleadings, new and old, that the contract they rely on is one in writing dated 12 March 1987. They have identified that that contract is made up of the documents they have produced.
However, the pleadings contain assertions which, as counsel for the defendants pointed out, are inconsistent with the documents produced. The pleadings do not contain assertions which make the link between the documents produced and the entitlement claimed. Indeed, it is apparent that, not only is that link not entirely evident, the possibility of it being made so is questionable given the absence of terms pleaded as express terms in those documents. The Associate Judge recognised deficiencies in the pleadings but then characterised the objection to the pleadings in a way which did not seem to have regard to those deficiencies. I refer to the passage from his Honour's reasons quoted in par[20]. While the statement may very well be a correct statement of principle, the objection made by counsel for the defendants goes well beyond that characterised by the Associate Judge.
This appeal should not succeed unless an error on the part of the Associate Judge in the exercise of his discretion is established. The error which appears to be the substance of the defendants' submissions is that referred to in ground (c) of the notice of appeal. With respect, that ground in my view must succeed. The Associate Judge recognized deficiencies in the pleadings. He then identified that it was not an ingredient of a pleading to identify the clause in the documents relied on, and commented upon an ability to seek particulars to identify that material. However, what he appears to have failed to have regard to is the fundamental failure by the plaintiffs to plead material facts in relation to the terms of a contract which would entitle the plaintiffs to claim the principal sum now claimed, and interest on that sum at the rate claimed. This is not a case of the plaintiffs being asked to simply identify by the provision of particulars where in the documents produced the basis for their claim appears so that the defendants know where to look, but a case of the plaintiffs needing to identify the very existence of the basis for their claim. They have not done so. The defendants are entitled to know the basis for the plaintiffs' claim against them.
In the circumstances, the order of the Associate Judge made 17 December 2009 by which he gave the plaintiffs leave to amend their statement of claim is set aside and the application to amend is refused.
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