J G and J a Williamson Holdings Pty Ltd v David Hindle
[2017] VSC 534
•11 September 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROFESSIONAL LIABILITY LIST
S CI 2015 05534
| J G & J A WILLLIAMSON HOLDINGS PTY LTD (ACN 007 453 652) | Plaintiff |
| v | |
| DAVID HINDLE | First Defendant |
| IAN CLOAK T/AS BILLINGS CLOAK (ABN 60 621 611 083) | Second Defendant |
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JUDGE: | DERHAM AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 24 August 2017 |
DATE OF RULING: | 11 September 2017 |
CASE MAY BE CITED AS: | J G & J A Williamson Holdings Pty Ltd v David Hindle & Anor |
MEDIUM NEUTRAL CITATION: | [2017] VSC 534 |
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PRACTICE AND PROCEDURE – Application to amend amended statement of claim – Whether proposed amendments disclose causes of action or are embarrassing – Whether proposed amendments plead causes of action that accrued more than 6 years before the commencement of the proceeding – First defendant previously pleaded statute of limitations as a defence to the claims – Proposed amendments opposed on the basis that they plead statute barred causes of action.
PRACTICE AND PROCEDURE – Application for summary judgment on the basis that causes of action pleaded and proposed to be pleaded are statute barred – Whether no real prospect that causes of action are not statute barred – Whether the proceeding should proceed to trial in the exercise of the Court’s discretion under the Civil Procedure Act 2010, s 64 – Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P G Cawthorn QC | Michael Benjamin & Associates |
| For the First Defendant | Mr D A Klempfner | Lander & Rogers |
HIS HONOUR:
Introduction
These reasons concern two applications:
(a) an application by the plaintiff for leave to file and serve a proposed further amended statement of claim (‘PFASOC’);[1] and
(b) an application by the first defendant (‘Hindle’) for summary judgment pursuant to ss 62 and 63 of the Civil Procedure Act 2010 (‘CPA’) or alternatively, pursuant to O 22 or r 23.01(1) of the Supreme Court (General Civil Procedure) Rules 2015 (‘Rules’).[2]
[1]Summons filed 12 May 2017, supported by the affidavits of Marta Karolina Kowalczyk sworn 12 May 2017 (‘First Kowalczyk Affidavit’) and 6 June 2017 (‘Second Kowalczyk Affidavit’).
[2]Summons filed 7 June 2017, supported by the affidavit of David Gilbert Hindle sworn 6 June 2017 (‘Hindle Affidavit’) and opposed by the affidavits of John Gordon Williamson sworn 18 August 2017 (‘the First Williamson Affidavit’) and 22 August 2017 (‘the Second Williamson Affidavit’).
The issue is whether the plaintiff’s claim is statute barred by s 5(1) of the Limitation of Actions Act1958 (‘LAA’).
I have concluded, for the reasons that follow, that this is a case where there is an argument that the plaintiff’s claim is not statute barred and, having regard to the cautionary observations of the High Court in Wardley Australia Ltd v Western Australia,[3] I should not exercise the power to terminate the plaintiff’s proceedings summarily. Further, if I am wrong in concluding that there is such an argument, in the exercise of the discretion given to the Court by s 64 of the CPA, it is in my opinion more just, efficient, timely and cost effective for the proceeding to progress to trial, as presently fixed, in February 2018.
[3](1992) 175 CLR 514 (‘Wardley’).
The PFASOC is not presently in a form in which it is appropriate to allow it to be filed and served. The plaintiff should have an opportunity to present a further PFASOC within a reasonable time.
Background
The proceeding was commenced by writ filed on 23 October 2015 claiming damages for negligent advice given by Hindle, in his capacity as the plaintiff’s accountant and tax advisor. The second defendant was added later on an application by Hindle for the purposes of a proportionate liability defence. The second defendant took no part in the applications. No appearance has been entered for him to the amended writ naming him as a defendant.
The proceeding is in the Professional Liability List of the Court and has been set down for trial commencing on 5 February 2018 on an estimated duration of 7 days, and pre-trial directions have been given.[4] A mediation has been held. Expert evidence has been filed by the plaintiff and Hindle.
[4]Order of Macaulay J made on 21 April 2017.
Hindle’s application for summary judgment is based upon the defence that it has filed to the amended statement of claim (‘ASOC’) claiming that the causes of action upon which the plaintiff sues are statute barred and for that reason, the plaintiff has no real prospect of success in its claims (within the meaning of s 63(1) of the CPA), as the claims are scandalous, frivolous or vexatious or are otherwise an abuse of process within the meaning of rr 23.01(b) and 23.02(b) of the Rules.
The plaintiff’s application to amend the statement of claim is, in a sense, responsive to the limitation of actions defence raised by Hindle. Since the plaintiff filed its application to file and serve the PFASOC, there has been correspondence between the plaintiff and Hindle’s lawyers regarding its deficiencies, and a further PFASOC has been exhibited to an affidavit filed by the plaintiff.[5] I will deal with the application to amend the statement of claim and the application by Hindle to dismiss the proceeding by reference to the highest and best case that is, or maybe, made in the PFASOC.
[5]The Second Kowalczyk Affidavit.
The claim - in the PFASOC
The plaintiff is the trustee of the Williamson Family Trust established by Deed dated 5 June 1995. John Williamson (‘Williamson’) is a director of the plaintiff. Hindle is a practising accountant and tax advisor holding himself out as having a particular expertise in accounting, tax and finance. Since 1995, Hindle has been retained and has advised the plaintiff in relation to income tax, State land tax, and accounting matters and acted as the plaintiff’s accountant. The plaintiff alleges that due to their relationship, Hindle is fully conversant with the plaintiff’s financial position (assets, liabilities and annual profit) and that Hindle knew or ought to have known that the plaintiff had substantial assets which should not be exposed to financial risk.
The plaintiff alleges that Hindle owes it a duty to exercise all due care and skill:
(a) in the preparation and provision of advice proffered in connection with any proposed investment the plaintiff might undertake;
(b) to ensure the plaintiff’s assets and financial position were protected at all times;
(c) in warning of the risks associated with any proposed investment to be undertaken by the plaintiff; and
(d) in minimising the exposure of the plaintiff’s assets to financial risk.
It is common ground that this is a tortious duty rather than a duty arising out of a contract or agreement.
In February or March 2007, Williamson informed Hindle that he had found 472-478 Bourke Street, Melbourne (‘the Property’) for sale by tender and that he intended to bid for it. The Property consisted of a building fully leased with two anchor tenants and provided a development opportunity to strata title the whole building and construct additional apartments (‘the Project’). Williamson informed Hindle of this and that substantial borrowings were needed to complete the purchase and the Project.
After Williamson lodged a tender, he provided the tender documents to Hindle. This ‘informed’ Hindle that the terms of the contract of sale permitted the successful bidder to nominate a substitute purchaser and that substantial borrowings were required to purchase the Property and complete the Project. Further, Hindle is alleged to know that:
(a) the plaintiff had not previously undertaken an investment of this magnitude;
(b) the Project involved substantial financial risk;
(c) no consideration was given to the purchasing entity’s identity;
(d) it was always intended that the Williamson Family Trust should be protected from any foreseeable substantial losses or financial risks;
(e) it was always the practice of Williamson to seek advice from Hindle in relation to which entity should acquire any asset; and
(f) in the past, Hindle had advised Williamson to establish the Williamson Family Trust for the purposes of both wealth creation and asset protection.
It is alleged that these matters resulted in the necessity for Hindle to ensure that if the tender was successful, the plaintiff was protected against unforeseen contingencies, losses or risks associated with the purchase of the Property and the implementation of the Project.
Williamson was the successful bidder. On 9 March 2007, he signed a contract of sale to purchase the Property for $14,750,000.00. After execution of the contract of sale, Williamson sought Hindle’s advice in relation to who was to be the purchasing entity. Hindle advised that the plaintiff should be the purchaser. Relying on that advice, the plaintiff agreed to be nominated as the purchaser of the Property.
It is then alleged (proposed paragraph 13A of the PFASOC) that by reason of the ‘aforesaid matters’ Hindle knew or ought to have known that he should have warned the plaintiff that due to the Project’s scope, it would be advisable to use a standalone company or some other entity to purchase the Property and implement the Project.
In 2009, sometime after settlement of the purchase, the plaintiff appointed estate agents to advertise and sell apartments to be developed on the Property ‘off the plan’. The plaintiff was required to pay the estate agent commission on receipt of a tax invoice, 50% of the payment to be made no later than 180 days from the average date of sale and as to the remaining balance, no later than 1 April 2011.[6]
[6]PFASOC [14].
The estate agent commenced marketing the apartments in January 2010 and by September 2010 had sold 208 apartments.[7] The estate agent rendered a tax invoice, discounting the amount payable, on 17 September 2010.[8]
[7]Ibid.
[8]Ibid. Reducing the commission to $2,042,720.63.
On 12 January 2010, the plaintiff secured facilities totalling $55,000,000.00 from the Commonwealth Bank of Australia (‘CBA’) to assist in the completion of the purchase of the Property and the implementation of the Project.[9] However, during the course of implementing the Project, the plaintiff discovered a further $5,000,000.00 of funding was required.[10] The CBA declined to advance further funding and by letter dated 27 August 2010 informed the plaintiff that it had withdrawn its letter of offer to provide financing for the purchase and the development of the Project in the sum of $55,000,000.00 (‘the CBA adverse advice’).[11]
[9]Ibid.
[10]PFASOC [16].
[11]PFASOC [17].
Attempts by the plaintiff to enter into a joint venture with other parties failed and in the absence of additional funding, the Project could neither be implemented nor completed.[12] On or about 28 August 2010, or soon thereafter, the plaintiff decided to mitigate its losses, abandon the implementation of the Project and sell the Property.[13]
[12]Ibid.
[13]PFASOC [19].
It is alleged that the plaintiff then became liable to pay the estate agent’s total commission (after discount) of $2,042,720.63.[14] By a Deed of Settlement dated September 2010 (‘September 2010 Deed’), the plaintiff and the estate agent agreed that the discounted commission should be paid by two instalments; $1,021,360.31 plus interest at 12% from 1 July 2010 to 22 October 2010[15] and $1,021,360.31 by 31 March 2011.[16]
[14]PFASOC [19A].
[15]That is as it is proposed to be pleaded in paragraph 19B of the PFASOC. The Deed was put into evidence by the First Williamson Affidavit and shows the date for payment of the first instalment to be 22 October 2010.
[16]PFASOC [19B].
It is then alleged that as at August 2010, the estate agent was an unsecured creditor of the plaintiff in that it had a monetary claim against the plaintiff which would not be recoverable if the plaintiff had been a corporation which went into liquidation and had a surplus of liabilities over assets.[17]
[17]PFASOC [20].
The allegation then is that but for Hindle’s advice to purchase the Property in the name of the plaintiff and his failure to advise it to invest in the Project as either a shareholder in a company or as a unit holder in the unit trust structure, the plaintiff would not be liable or required to pay its unsecured creditors, and that liability was not ascertained or ascertainable until the plaintiff received the CBA letter on 27 August 2010.[18] The counterfactual hypothesis is that had the CBA not withdrawn its funding, it would have advanced funds sufficient to enable the Project to be successfully completed and profits derived. It was only when the Project could not proceed that the loss claimed by the plaintiff was suffered, that loss being his liability to the estate agent.[19]
[18]PFASOC [21].
[19]PFASOC [21].
The breach of duty alleged is a failure to exercise due skill and care in advising the plaintiff by failing to:
(a) advise on a method of protecting the plaintiff from any losses [sic];
(b) advise on a method by which any profit could be distributed to the plaintiff without being the purchaser of the Property; and
(c) warn the plaintiff that if it were nominated as purchaser then in the event the Project was not successful the plaintiff would be liable for any losses incurred.[20]
[20]PFASOC [22.1]
The statement of claim indorsed on the writ followed a similar path to the PFASOC, save that it was alleged that discovery of the additional construction costs meant that the Project would not make a profit. At August 2010, when the CBA adverse advice was received, the unsecured creditors were the estate agent and various consultants. The damage was the liability to pay the unsecured creditors. The ASOC made some minor amendments to the scope of the duty and included as paragraph 13A a failure to warn the plaintiff that it should use a standalone company to purchase the Property and implement the Project. The PFASOC removes any mention of the various consultants and limits the damage allegedly suffered to the liability of the plaintiff to the estate agent’s commission. Evidence advanced by Hindle shows that the plaintiff’s liability to the various consultants was first incurred in mid-2007.[21]
[21]The Hindle Affidavit.
The defence to the ASOC, after pleading various matters not presently relevant, alleges the engagement of various consultants on the implementation of the Project. Prior to February 2010, the estate agents and those consultants were ‘at all material times’ unsecured creditors of the plaintiff, and that the plaintiff first incurred indebtedness to the consultants from mid-2007 onwards in respect of the Project.[22] A table naming the consultants, the dates of their invoices and the amounts due was included. It was then pleaded that if the plaintiff has incurred any liability to pay unsecured creditors as a result of Hindle’s breach of duty, that liability first occurred in or during 2007, by reason of which the plaintiff’s cause of action accrued more than six years before the filing of the writ and is statute barred.[23]
[22]Defence to amended statement of claim filed 18 May 2016 [14].
[23]Ibid [24]-[25].
Submissions
Plaintiff
In support of its PFASOC, the plaintiff contends the amendments in it are for the purpose of ensuring that the real questions in controversy are determined.[24] Further, the proposed amendments do not advance any different or additional causes of action and there is no basis to contend that the amendments should not be allowed, other than that the claim is statute barred. The amendments will occasion no prejudice to Hindle (and none is suggested). I will deal with the plaintiff’s response to Hindle’s application for summary judgment after setting out the basis for that application.
[24]Relying on r 36.01(a) of the Rules.
Defendant
Hindle contends that the plaintiff’s claim is so obviously statute barred that it ‘has no real prospect of success’,[25] ‘is scandalous, frivolous or vexatious’[26] and/or ‘is otherwise an abuse of process.’[27] Hindle contends that an analysis of the plaintiff’s current pleading and its PFASOC and the facts disclosed in the affidavit of David Gilbert Hindle,[28] unequivocally reveal that the cause of action first accrued well prior to six years before the writ was filed on 23 October 2015. Moreover, the PFASOC is nothing more than an attempt to overcome the limitation defence and the amendments are a lawyers’ construct.
[25]Section 63(1) of the CPA.
[26]Rules 23.01(1)(b) and 23.02(b) of the Rules.
[27]Rules 23.01(1)(c) and 23.02(d) of the Rules.
[28]The Hindle Affidavit.
In addition to the limitation defence, that is said to be impregnable, Hindle contends that the plaintiff’s claim remains without any real prospect of success because the matters sworn to in Williamson’s affidavit of 18 August 2017[29] reveal that there is no causal nexus between the alleged breach of duty and the loss suffered by the plaintiff.[30] By Williamson’s own admission, ‘the Plaintiff decided to abandon the Project when additional funding was not secured’.[31]
[29]The First Williamson Affidavit.
[30]The First Williamson Affidavit [6] – [9].
[31]The First Williamson Affidavit [9].
Hindle identifies the essence of the plaintiff’s claim as follows:
(a) after executing the contract of sale to purchase the Property on 9 March 2007, Williamson sought Hindle’s advice in relation to who was to be the purchasing entity;[32]
[32]Proposed FASOC (’PFASOC ’) [13.1].
(b) Hindle advised that the plaintiff should be the purchasing entity;[33]
[33]PFASOC [13.2].
(c) relying on Hindle’s advice received on 30 March 2007, the plaintiff agreed to be nominated as the purchaser of the Property;[34]
(d) further, by reason of this nomination, Hindle knew or ought to have known that he should have warned the plaintiff that because of the scope of the Project, it would have been advisable to use a standalone company or some other entity to purchase the Property and implement the Project;[35] and
(e) were it not for Hindle’s advice to purchase the Property in the plaintiff’s name and his failure to advise the plaintiff to invest in the venture as either shareholder in a company or as a unit holder in a Unit Trust structure, the plaintiff would not have been liable nor required to pay its unsecured creditors which liability was not ascertained or ascertainable until the plaintiff received the CBA adverse advice.[36]
[34]PFASOC [13.3].
[35]PFASOC [13A].
[36]PFASOC [21.1].
Putting aside the question of whether Hindle owed a duty of care to Williamson (who is not a party) or the plaintiff, two important points emerge from the brief summary of the plaintiff’s claim set out above:
(a) first, it is evident that the plaintiff alleges a negligent omission on the part of Hindle - a negligent failure to advise as to the appropriate entity or structure for the purchase of the Property; and
(b) second, by the PFASOC introducing the proposition that the ‘liability was not ascertained or ascertainable until the plaintiff received the CBA adverse advice’, the plaintiff is seeking to circumvent the operation of the LAA by trying to come within the scope of the High Court’s observations in Wardley distinguishing actual loss or damage incurred from potential or likely damage.[37]
[37]Wardley, 526–27 (per Mason CJ, Dawson, Gaudron and McHugh JJ).
By this device, the plaintiff seeks to elevate the decision in Wardley beyond its ratio to a rule of universal application. As Young AJA noted in Khoury v Coffey Projects (Australia) Pty Ltd:[38]
There has grown up the idea in some quarters after Wardley that whenever once can find the hint of some contingent liability that the cause of action only accrues when all chances that might affect the amount of the loss have played out. This is a misreading of the authorities…
As noted earlier Deane J in Wardley made it quite clear that there was no general rule that applied and that one must look at each of the situations to see when the cause of action accrued.
[38][2015] NSWSC 591 [26]–[27].
Counsel for Hindle acknowledged that the decision of Young AJA was overturned on appeal.[39]
[39]Khoury v Coffey Projects (Australia) Pty Ltd [2015] NSWCA 371 (‘Khoury v Coffey’).
In determining the true situation, the law looks at the substance of the matter and not the formal framework that may have been artificially erected by the plaintiff in an endeavour to gain a juridical advantage.[40] The reliance on Wardley is inapt in the current circumstances, because the plaintiff specifically pleads a ‘no transaction’ case. Where a plaintiff alleges a negligent omission, the causal link between the breach of duty and the claimed damage can only be established by means of a counterfactual hypothesis. The plaintiff must propound an alternative state of facts, premised upon Hindle having exercised reasonable care and, specifically, upon there having been no such omission. The plaintiff’s counterfactual hypothesis must identify what the plaintiff would have done, had reasonable care been exercised, and how the taking of that action would have averted the loss or damage which the plaintiff in fact suffered.[41]
[40]Winnote Pty Ltd v Page (2006) 68 NSWLR 531, 543 [64].
[41]Wodonga Regional Health Service v Hopgood [2012] VSCA 326 [31] (Maxwell P, with whom Buchanan and Harper JJA agreed); See also Findlay v State of Victoria [2009] VSCA 294 [2] – [3]; Equal 54 Pty Ltd v Galimberti [2016 VSC 588 [146].
The essence of the plaintiff’s counterfactual case can be reduced to the following three elements; first, had Hindle provided proper advice as to the appropriate entity or structure to purchase the Property, then second, the plaintiff would not have been nominated as purchaser of the Property and third, the plaintiff would not have incurred a liability to pay the estate agent’s commission prior to the Project being shelved.
The plaintiff seeks to introduce a contingent element into its loss by reference to the CBA’s advice that it would no longer fund the Project.[42] However, the role of the CBA vis-à-vis the plaintiff’s loss is a red-herring. The plaintiff’s loss does not arise from the CBA’s refusal to provide funding, but from the plaintiff’s antecedent entry into the transaction as nominee purchaser of the Property.
[42]PFASOC [17.1], [19A] and [21.1]
On the plaintiff’s own counterfactual hypothesis, it should never have been nominated as the purchaser of the Property. The plaintiff alleges that Hindle should have advised the ‘use [of] a standalone company or some other entity to purchase the Property and implement the Project’.[43]
[43]PFASOC [13A].
Thus, on the first occasion that the plaintiff incurred any liability with respect to the development of the Property, it suffered loss and damage. It defies logic for the plaintiff to seek to categorise its liability to the estate agent under the Deed[44] as being different to other liabilities it incurred in pursuit of the Project. The plaintiff fails to explain why, for example, it puts its liability under the Deed in a different category to loss of the advertising money it paid the estate agent in October 2009.[45]
[44]Exhibit JGW-2 to the First Williamson Affidavit.
[45]Exhibit DH-7 to the Hindle Affidavit.
The plaintiff’s PFASOC is inconsistent and therefore embarrassing. Its case is either that:
(a) Hindle’s negligent advice caused it to incur liabilities in respect of the Project in circumstances where some other entity ought to have been nominated to complete the purchase of the Property; or
(b) it accepts the benefit and burden of the transaction it entered with respect to the Property, but it made its own independent decision in 2010 ‘to mitigate its losses and abandon the implementation of the Project and to sell the Property’,[46] in which case Hindle cannot be said to have caused the plaintiff’s loss.
[46]The First Williamson Affidavit [7].
Even if the CBA’s decision to refuse further development funds to the plaintiff caused the plaintiff to crystallise its losses in respect of the estate agent’s deed, it remains unexplained by the plaintiff why it no longer regards other prior expenses incurred in respect of the Property to also be losses attributable to Hindle’s negligence.[47] The abandonment of this latter aspect of the claim highlights the contrivance sought to be brought about by the PFASOC in an attempt to overcome the limitation problem confronting the plaintiff.
[47]The statement of claim indorsed on the writ and the ASOC claimed losses constituted by payments to consultants which commenced to be incurred in mid-2007. Hindle complains that in the plaintiff’s further and better particulars filed 13 September 2016 the payment of invoices rendered by these consultants was misrepresented.
Hindle contends that the plaintiff’s cause of action for tortious breach of duty commenced when damage was first suffered by the plaintiff.[48] Merely because a substantial loss occurs at a later point of time does not establish that there was no damage stemming from the same breach occurring at an earlier date being damage that occurred outside of the limitation period, thereby barring the whole claim. In this area of economic loss, the same principle applies as for personal injury, namely that time commences to run from the first measurable occurrence of damage.[49]
[48]Hawkins v Clayton (1988) 164 CLR 539, 587 – 588 (‘Hawkins’); Bodycorp Repairers Pty Ltd v Holding Redlich [2017] VSC 215 [34].
[49]Winnote Pty Ltd v Page (2006) 68 NSWLR 531, 543 [66].
In determining when loss is first suffered in a case of pure economic loss, it may be necessary to identify precisely the interest of the plaintiff that has been infringed by a defendant’s allegedly negligent act or omission.[50]
[50]Bodycorp Repairers Pty Ltd v Holding Redlich [2017] VSC 215 [48] per Macaulay J, citing Hawkins 601, Gaudron J; Wardley, 527, Mason CJ, Dawson, Gaudron and McHugh JJ; Commonwealth of Australia v Cornwell (2007) 229 CLR 519, 525 [16] (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ).
It is clear that the plaintiff’s cause of action first accrued well prior to 23 October 2009, being the period six years prior to the commencement of the proceedings.[51] In his affidavit, Hindle refers to the expenses incurred by the plaintiff prior to 23 October 2009.[52] Hindle swears to his knowledge that the invoices exhibited to his affidavit were incurred by the plaintiff in relation to the Project[53] and were paid by the plaintiff.[54] Williamson now admits that the various invoices exhibited to Hindle’s Affidavit were paid by the plaintiff ‘at the time they were incurred as they related to the ongoing development’ of the Property.[55] Williamson’s admission contradicts the plaintiff’s further and better particulars of claim which alleged that the plaintiff’s consultants did not render an invoice before 30 April 2010 and no invoices were paid before 24 September 2010.[56]
[51]Upon the filing of the Writ on 23 October 2015. See the Hindle Affidavit [24].
[52]See Exhibit DH-1 (Invoice 5 June 2007 paid by the plaintiff on June 2007), Exhibit DH-2 (Invoice 30 June 2007 paid by the plaintiff on 28 August 2007), Exhibit DH-3 (Invoice 13 September 2007), Exhibit DH-4 (Invoice 30 September 2007 paid by the plaintiff on 22 February 2008), Exhibit DH-5 (Invoice 30 September 2007 paid by the plaintiff on 22 February 2008), Exhibit DH-7 (Invoice dated 30 September 2009 paid by the plaintiff on 15 October 2009) to the Hindle Affidavit.
[53]The Hindle Affidavit [10].
[54]The Hindle Affidavit [23].
[55]The First Williamson Affidavit [5].
[56]See the plaintiff’s ‘Response to the First Defendant’s Request for Further and Better Particulars of the Further Amended Statement of Claim’ dated 30 August 2016 [20].
The demonstrable falsity of the plaintiff’s further and better particulars of claim highlight the extent to which the plaintiff has moulded its pleadings in an attempt to gain a juridical advantage in overcoming Hindle’s defence based on section 5(1)(a) of the LAA.
Plaintiff in response
The plaintiff submits that had it not decided in about October 2010 not to proceed with the Project, and had the CBA advanced further monies to complete the development, the plaintiff would have continued on with the development and made substantial profits. It would not have suffered a loss. It would have had nothing to sue for.
The economic interest allegedly infringed by Hindle’s negligence (as the authorities show may be relevant to determining when loss is first suffered in a case of pure economic loss[57]) was identified by the plaintiff’s Counsel as the expectation of a profitable development of the Property. If the Project had been profitable, and the CBA had continued to fund it, the plaintiff would not be suing because no loss would have been suffered.[58]
[57]Bodycorp Repairers Pty Ltd v Holding Redlich [2017] VSC 215 [48] (per Macaulay J), citing Hawkins 601, Gaudron J; Wardley, 527, (Mason CJ, Dawson, Gaudron and McHugh JJ); Commonwealth of Australia v Cornwell (2007) 229 CLR 519, 525 [16] (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ).
[58]Transcript, 24 August 2017, p 4.
The fact is that a loss was ascertained or ascertainable only when the CBA declined to lend to complete the Project in August 2010. The writ was issued on 23 October 2015, within 6 years after the loss was sustained. Before then, losses were not suffered. It was not until then that it was ascertained or ascertainable that costs (represented by invoices and agent’s fees) were wasted. Had the development proceeded, they would not have been wasted.
The disadvantageous character of the transaction whereby the investment was in the plaintiff’s name, was only ascertained or ascertainable after August 2010 - well inside the 6 year period. Before August or October 2010, the plaintiff could not have sued for the losses it claims. The plaintiff relied on the famous and oft quoted passage from Wardley which I quote below (at paragraph 73).[59]
[59]Wardley.
Until the CBA advised it would not fund the Project, the expenses incurred were not wasted. The liability for the agent’s commission was only lost when the development could not proceed, due to the intervention of the CBA.[60]
[60]Sephton v Law Society [2006] 2 AC 543, 550.
The arrangement whereby the Property was acquired and developed (and consultant’s and agent’s costs incurred) by the plaintiff, was ongoing and a return was not expected until the Project was completed. Damage was only suffered when it was ascertainable that the development could not be completed, and returns on the Project achieved.[61]
[61]Shellie v Great Southern Finance Pty Ltd (in liq) [2013] VSC 351 [127].
In assessing whether a claim is statute barred, the Court has regard to the balance of benefits and burdens from a transaction. Only when the burdens exceed the benefits will loss be found to have been suffered.[62] It was not ascertained or ascertainable that loss of the kind claimed was suffered until the CBA decided not to approve the further advance of moneys. In those circumstances, time did not commence to run until well after the limitation period began.
[62]Wardley, 536–537; Cassis v Kalfas [2001] NSWCA 460 [76].
It is therefore clear that the claim is not statute barred; or at least, this is not one of the clearest of cases where it can be said that it is beyond doubt that loss was suffered outside the 6 year period. In circumstances where the ‘boundaries of the cause of action are still developing’[63] it is ordinarily necessary to have regard to the evidence —not just the pleaded allegations—in order to determine the matter on its merits.[64]The caution expressed by Kirby J in Wickstead is, Counsel for the plaintiff submitted, apt in this case:
Common experience teaches that it is usually more efficient and just to consider the viability of a cause of action when the facts said to support it are adduced and the suggested action can be judged with a full understanding of all relevant evidence. Testimony gives colour and content to the application and development of legal principle. That is why leave is usually required for an appeal from interlocutory orders. Appellate courts, including this Court, will usually require evidence to be adduced and a trial concluded before considering the application of the law to that evidence. Out of the detail of the evidence ultimately proved, affecting the relationship of the respondent and the appellant, may arise a finding of a duty of care which the common law of negligence would uphold.[65]
[63]E A Negri Pty Ltd v Technip Oceania Pty Ltd (2010) 27 VR 31.
[64]Wickstead v Browne (1992) 30 NSWLR 1, 16 (per Handley and Cripps JJA) (‘Wickstead’). Applied in Abel v State Trustees Ltd [2013] VSC 20 [36] (per Almond J) and Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222 [13] (per John Dixon J).
[65]Wickstead at 5.
Further, the application of s 64 of the CPA is appropriate in the circumstances of this case and the plaintiff’s claims should be allowed to go to trial on all issues:
(a) the statement of claim has gone through two iterations, and defences have been filed;
(b) discovery of documents has been given and inspection has occurred;
(c) each side has filed expert reports;
(d) the matter has been to Mediation; and
(e) the proceeding is fixed for trial in February 2018.
There is no explanation for Hindle’s delay in bringing the application. Even if it entertains doubts about the plaintiff’s claim, the Court ought allow it to go to trial under s 64 of the CPA.
Summary Judgment test
Part 4.4 of the CPA sets out the test for summary judgment: a court may give summary judgment if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, has no real prospect of success.[66]
[66]Section 63 of the CPA.
This liberalises the rules governing summary judgment in Victoria, so that it is easier to dispose of unmeritorious claims or defences summarily. The Court of Appeal has stated that the test should be construed as one of whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success. The ‘real chance of success’ test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test. As the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding.[67]
[67]Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 [29] (per Warren CJ and Nettle JA (Neave JA agreeing)) (‘Lysaght’).
The test must be applied according to its own terms and not according to considerations of whether the proceeding is ‘hopeless’ or ‘bound to fail’. To adopt ‘an unduly constrained, historical approach to the construction of s 63’ would ‘subvert the purpose of the provision’.[68]
[68]Lysaght [25] (per Warren CJ and Nettle JA (Neave JA agreeing)).
Courts must, however, continue to exercise the power to terminate proceedings summarily with caution. Courts should therefore only exercise the power if it is clear that there is no real question to be tried. This is so, irrespective of whether an application for summary judgment is made on the basis that: the pleadings do not disclose a reasonable cause of action, and no amendment could cure this error; or the action is frivolous, vexatious or an abuse of process; or the application for summary judgment is supported by evidence.[69]
[69]Lysaght [35] (per Warren CJ and Nettle JA (Neave JA agreeing)).
The power to give summary judgment must be exercised in accordance with the overarching purpose of the CPA and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence.[70]
[70]Lysaght [42] (per Neave JA).
These principles were confirmed by the Court of Appeal in Mandie v Memart Nominees Pty Ltd[71] where Kyrou, Ferguson and McLeish JJA observed:
According to Lysaght: a prospect which is not ‘real’ is ‘fanciful’; although the ‘no real prospect of success’ test in s 63(1) of the CP Act is more liberal than the common law test of ‘hopeless’ or ‘bound to fail’, there may not be much difference between them in practice; and, properly understood, a real question to be tried is one which realistically might result in the respondent to an application for summary judgment succeeding in the proceeding. [Footnote omitted]
[71][2016] VSCA 4 [45].
If there is no real prospect of success, a court may nevertheless allow a matter to proceed to trial if:
(a) it is not in the interests of justice to summarily dispose of the proceeding (s 64(a)); or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate (s 64(b)).
Whether a proceeding should be allowed to go to a full hearing on the merits must be determined according to the circumstances of each case.[72]
[72]Barber v State of Victoria [2012] VSC 554 [15].
Consideration
There is no dispute that the applicable limitation period is that prescribed in s 5 of the LAA. Causes of action in contract and tort, must be commenced before six years from the date on which the cause of action accrued. It is also not in dispute that a cause of action in tort accrues when damage is first suffered.[73] If a plaintiff later suffers further damage from the same negligent act, the recoverable damages are increased but no fresh cause of action accrues.[74] The critical question is the identification of the date or event upon which damage occasioned by Hindle’s alleged negligence was first suffered.
[73]Hawkins.
[74]Darley Main Colliery Co v Mitchell (1886) 11 App Cas 127; Winnote Pty Ltd v Page (2006) 68 NSWLR 531 [66].
For the purposes of the argument that the plaintiff’s cause of action is statute barred, counsel for Hindle set aside two matters. First, the fact that on the current pleading, the allegedly negligent advice was sought by and given to Williamson, not the plaintiff. Second, the causation argument (referred to above at paragraph 39). I accordingly will proceed on the basis that they are not material to the limitation of actions defence.
It is important to understand the counterfactual hypothesis advanced by the plaintiff. If advice had been given to use a standalone entity to purchase the Property and undertake the Project, by the time the CBA withdrew its funding,[75] that entity would be liable to the estate agent for the unpaid commission as unsecured debts which would not be recoverable.[76] The plaintiff would not be liable for those debts and that ‘liability was not ascertained or ascertainable until the plaintiff received the CBA adverse advice’.[77]
[75]And it was decided that the Project ‘could not be implemented or completed’. PFASOC [17.3].
[76]PFASOC [20].
[77]PFASOC [21].
Counsel for the defendant pointed out that the counterfactual hypothesis proposed by the plaintiff was distasteful.[78] I agree. But it is more than that. It is incomplete and, in its present form, may be misconceived. The misconception is, as I mentioned in argument to Mr Cawthorn QC, who appeared for the plaintiff, that it may be a claim for a lost commercial opportunity to obtain a benefit, namely the avoiding a liability that has in fact been incurred.[79] That involves an assessment by the Court of the prospects of success of that opportunity, had it been pursued.[80] The value of that opportunity and the actual damages suffered are ascertained by reference to the degree of probabilities or possibilities inherent in the plaintiff succeeding, had the plaintiff been given the chance he should have been given.[81]
[78]Transcript 24 August 2017, p 45.15.
[79]Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (‘Sellars’).
[80]Sellars, 355.
[81]Sellars, 349, 355.
The counterfactual hypothesis seems incomplete. It proceeds on the basis that Hindle should have advised the use of a structure to minimise the exposure of the plaintiff to financial risk, in particular by the use of a ‘standalone company or some other entity’.[82] This standalone entity would have purchased the Property. How that was to be done, and the consequences of the method are then completely ignored. The use of the standalone entity to purchase the Property and undertake the Project requires funding, by interests associated with the plaintiff perhaps and – no doubt – by external secured lenders, like the CBA. It results in the entity having assets – the Property and the Project at least. The value of the Property at the time identified as the event that enables the ascertainment of the damage, or the price at which the Property was sold, becomes, surely, critical to the issue of what, if any, damage was suffered at that time. The pleading alleges a decision to sell the Property, but nothing further. Curiously, there is no allegation that the Property was in fact sold nor is there any evidence that it was sold.[83] Further, as presently advanced, the counterfactual ignores what would be the prospect of the estate agent accepting the engagement without some security, as was required when the September 2010 Deed was entered into.[84]
[82]PFASOC [7], [13A], [20] and [21.1].
[83]Hindle’s expert report, however, refers to a sale at $12 million in February 2012.
[84]The estate agent’s exclusive sale authority is in evidence and includes a standard form guarantee that has been crossed through: see the Hindle Affidavit, Exhibit DH-6.
The plaintiff maintains that the economic interest infringed by the defendant’s negligent advice is the plaintiff’s expectation of a profitable development of the Property. According to the plaintiff’s theory, that economic interest was only ‘damaged’ when the CBA declined to lend to complete the Project in August 2010, whilst the writ was issued on 23 October 2015, within 6 years after the loss was sustained. It was only when the Project could not proceed that it was ascertained or ascertainable that the commission incurred but unpaid was ‘wasted’.
The identification of the date or event upon which damage may have been suffered by a plaintiff is always a mixed question of law and fact. The High Court observed in Commonwealth of Australia v Cornwell:[85]
…to show the existence of a completely constituted cause of action in negligence, a plaintiff must be able to show duty, breach, and damage caused by the breach; accordingly, in the ordinary case, it is at the time when that damage is sustained that the cause of action “first accrues” for the purposes of a provision such as s 11 of the Limitation Act. [emphasis added]
In Hawkins v Clayton, which turned upon a provision of the New South Wales legislation relevantly indistinguishable from the Territory legislation, this Court refused to place a particular gloss upon the statutory text. The Court rejected the proposition that, at least in the case of claims in negligence for economic loss, time does not run until the plaintiff discovers, or could on reasonable inquiry have discovered, that damage has been sustained.[86] [footnotes omitted]
[85][2007] HCA 16; 229 CLR 519 [5]-[6] (Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ) (‘Cornwell’).
[86](1988) 164 CLR 539 at 543, 587, 599‑600.
Thus, in the ordinary case, time will run even when the plaintiff is ignorant of its ability to commence a proceeding. On the analysis advanced by Hindle, once the CBA adverse advice was given and the plaintiff was unable to fund the Project, expenses had nevertheless been incurred in paying consultants, including advertising through the estate agent, from mid-2007, some three years before the CBA adverse advice. That left the plaintiff with three years in which to commence this proceeding, because it knew – or at least ought to have known – at that time that it had a cause of action.
As counsel for Hindle submitted, in determining when the damage occasioned by Hindle’s alleged negligence was first suffered, the law looks at the substance of the matter and not the formal framework that may have been artificially erected by the plaintiff in an endeavour to gain a juridical advantage.[87] Taking that approach, the plaintiff’s liability for the payment of various consultants fees was incurred earlier than six years before the commencement of the proceeding. As a matter of principle, it is hard to see a distinction between the incurring of liability for agent’s commission and the incurring of liability for other costs and fees such as architects, engineers, costs consultants and advertising that Williamson admits were paid by the plaintiff when they were incurred between mid-2007 and mid-2009.[88]
[87]Winnote Pty Ltd v Page (2006) 68 NSWLR 531 at 543 [64].
[88]The First Williamson Affidavit [5], referring to the Hindle Affidavit.
On the other hand, it appears that the only liabilities that were outstanding when the CBA adverse advise was given were the commissions payable to the estate agent on the ‘off the plan’ sale of the units in the proposed strata title development involved in the Project. Hindle’s evidence, confirmed by Williamson, is that all the other costs had been paid. The counterfactual hypothesis implicitly advanced is that; had a standalone entity been used instead of the plaintiff to purchase the Property, or to undertake the Project (or both) the only liability left when it was decided not to go ahead with the Project, and to sell the Property (because of the withdrawal of funding by the CBA), was the agent’s commission.[89] As was pointed out in the course of argument, the proceeds of the sale of the Property must surely be brought to account in determining whether the plaintiff has in fact suffered any ‘damage’ by the allegedly negligent advice to use the plaintiff as purchaser (and developer of the Project, I would add, as the purchase and development could be undertaken by separate entities).
[89]I say implicitly because the pleading does not expressly put the plaintiff’s case this way, but taking the highest and best case apparent to me on the facts advanced, I consider this counterfactual more persuasive.
This argument seeks to proceed by analogy with the principle exposed by the High Court in Wardley, where the Court distinguished actual loss or damage incurred from potential or likely damage.[90] In Wardley, the High Court said:
Economic loss may take a variety of forms and, as Gaudron J noted in Hawkins v Clayton, the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough.
When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of “loss or damage”. And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold become known or apparent and, by then, the relevant limitation period may have expired. To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an ever-present risk of under compensation or overcompensation, the risk of the former being the greater.[91] (emphasis added) [footnotes omitted]
[90]Wardley, 526-27 (Mason CJ, Dawson, Gaudron and McHugh JJ).
[91]Wardley, 527.
The context in which this statement was made is important to an understanding of the way it can be applied to other circumstances. The case pleaded by the respondent, the State of Western Australia (‘WA’), was relevantly:[92]
…that the appellants, Wardley Australia Ltd and Wardley Australia Securities Ltd, which carried on business as merchant banks, engaged in misleading and deceptive conduct in connection with the execution by the respondent of an indemnity in favour of the National Australia Bank Ltd (the bank) against a facility granted by the bank to Rothwells Ltd (Rothwells), by reason of which the respondent suffered loss or damage.
[92]Wadley, 520 (Mason CJ, Dawson, Gaudron and McHugh JJ).
Later, the indemnified party, the National Australia Bank, suffered loss and called on the indemnity given by WA. The High Court held that until the bank suffered a loss that crystallised WA’s liability to pay under the indemnity, WA had suffered no actual loss. Its loss before that time was subject to a contingency – that contingency being that the indemnified party should suffer a loss to which the indemnity responded.[93]
[93]Bodycorp Repairers Pty Ltd v Holding Redlich [2017] VSC 215 [57].
Can the plaintiff’s case be equated with the facts and circumstances in Wardley? Taking the plaintiff’s case at its highest, is there an arguable basis to say that the plaintiff’s expectation of a profitable development of the Property, which was dependant on the Project being implemented, was subject to that contingency (the Project being implemented) and that the contingency failed when the plaintiff decided to mitigate its losses and abandon the implementation of the Project in consequence of the CBA adverse advice?[94]
[94]FPASOC [19], the First Williamson Affidavit [7].
That looks a lot like a contrivance. There is no contingency at law, of the kind involved in Wardley, where the indemnity in question created an executory and contingent legal obligation. As a matter of construction, the indemnity in Wardley did not generate an immediate non-contingent liability to pay on execution of the instrument. Again, in the words of the plurality:
It was neither a promise to meet a liability of the promisee to make a payment nor a promise to pay a debt owing by a third party to the promisee. In our view, the indemnity, on its true construction, was one which created a liability on the part of the respondent to the bank to make payment if and when the bank's relevant “net loss” was ascertained and quantified, subject to the making of a demand for payment by the bank. The liability was, therefore, in conformity with the opinion of the Full Court, contingent and executory. The likelihood, perhaps the virtual certainty, that there would be a loss, in the light of Rothwell’s actual financial position as it stood when the indemnity was executed, did not transform the liability into an actual or present liability at that time.[95]
[95]Wardley, 524.
I can see no true analogy between the facts of this case and the decision in Wardley. Nor is the claim one that has any analogy with Cornwell where the High Court also rejected an analogy with Wardley, but found that the loss suffered (retirement benefits to which Mr Cornwell would have been legally entitled but for the negligent advice he was given) only matured into actual loss at the end of the respondent’s service as public servant when his legal entitlement arose.
Nevertheless, I cannot confidently say that the claim, as I have construed it, has no real prospect of success. The plaintiff’s claim at its highest involves an assumption that its only unpaid liability is the agent’s commission. Because of the so-called contingency of the CBA adverse advice and the decision to abandon the Project, this liability falls into a different category of loss compared with the consultants and advertising fees earlier incurred and which were paid; namely a loss that would - had the correct advice been given - not have fallen on the plaintiff. The plaintiff or another entity controlled by Williamson may have funded the standalone entity up to that point, and then sought to cut it loose, so to speak.
It seems tolerably clear that liability for the commission was fixed and incurred within 6 years before the commencement of the proceeding. As pleaded, the plaintiff was required to pay the estate agent’s commission on receipt of a tax invoice. Half due no later than 180 days from the average date of sale and the remaining half no later than 1 April 2011.[96] The marketing of the apartments commenced in January 2010 and by September 2010, the estate agent had sold 208 apartments.[97] On 17 September 2010, the estate agent rendered a tax invoice, discounting the amount payable.[98] The September 2010 Deed re-fixed the liability and provided for security in the form of guarantees by Williamson and his wife, and a mortgage of the Property or a Bank guarantee.[99] In this way, the PFASOC pleads the actual liability to pay the agent’s commission was first incurred less than six years before the commencement of the proceeding.
[96]PFASOC [14].
[97]Ibid.
[98]Ibid.
[99]The Deed as introduced into evidence by Williamson is difficult to follow (the cross references to clauses within the Deed are wrong and without further submissions and perhaps evidence it does not make sense: see the First Williamson Affidavit, Exhibit JGW-2.
At this point, it is appropriate to mention the observations of the plurality of the High Court in Wardley regarding the striking out of claims at an interlocutory stage:
We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question.[100]
[100]Wardley, 533.
This observation of the High Court reinforces the need to continue to exercise the power to terminate proceedings summarily with caution. Having regard to the observations of Kirby J in Wickstead, in my view, it will be more efficient and just to consider the viability of the plaintiff’s cause of action, and whether on its true characterisation it is statute barred when the pleading is finalised and when the facts in support are in evidence. The whole matter can then be judged with a full understanding of all relevant evidence. In particular, the counterfactual hypothesis needs to be the subject of both a clear pleading and evidence that identifies what the plaintiff would have done, had reasonable care been exercised, and how the taking of that action would have averted the loss or damage which the plaintiff in fact suffered.[101]
[101]Wodonga Regional Health Service v Hopgood [2012] VSCA 326 [31] (Maxwell P, with whom Buchanan and Harper JJA agreed); See also Findlay v State of Victoria [2009] VSCA 294 [2] – [3]; Equal 54 Pty Ltd v Galimberti [2016 VSC 588 [146].
This is a case which confirms the wisdom of the observation of the Court of Appeal in Mandie v Memart Nominees Pty Ltd that there may not be much difference between a prospect which is not ‘real’ and the common law test of ‘hopeless’ or ‘bound to fail’, at least in some cases.[102] The plaintiff’s argument in this case is one which is best tested at trial rather than being dismissed summarily.
[102][2016] VSCA 4 [45].
If, however, I am wrong to conclude that the plaintiff’s claim is arguable, in the sense that it cannot be concluded that it has no real prospect of success, there is another reason why this proceeding should not be dismissed at this stage and should, as matters presently stand, go to trial.
Application of s 64 of the CPA
This case has been proceeding through its interlocutory stages for nearly two years. Discovery has been given, an additional defendant added on the application of Hindle, expert evidence filed and exchanged, an unsuccessful mediation held, trial directions made and a trial date set. Hindle’s first defence raised the limitation of actions defence.[103] There is no explanation in the evidence given by or on behalf of Hindle why the application for summary judgment is made so late. It was made in June 2017, 18 months after the commencement of the proceeding and over 12 months after the limitation defence was first pleaded. Counsel for Hindle explained that the mediation being completed shortly before the directions hearing on 21 April 2017 ‘to some extent … explains the timing of the application’.[104]
[103]Filed on 18 May 2016.
[104]Transcript, 24 August 2017, p 38.17.
The discretion given to the Court by s 64 of the CPA is relevant in these circumstances. The section affirms the Court’s broad discretion, which of course must be exercised judicially, not to dismiss a claim even though it has no real prospect of success. The circumstances in which the Court might consider the dispute to be of such a nature that only a full hearing on the merits is appropriate is equally wide in its compass and plainly to be considered in the circumstances of each case.[105] The discretion is to be exercised to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute between the parties. The Court’s powers in furthering the overarching purpose are facilitated by having regard to the objects and matters set out in s 9 of the CPA.[106]
[105]Ottedin Investments v Portbury Developments [2011] VSC 222 [12].
[106]Ottedin Investments v Portbury Developments [2011] VSC 222 [18(3)].
Although it is now necessary for the plaintiff to prepare a further PFASOC, it is in my opinion more just, efficient, timely and cost effective for the proceeding to progress to trial as fixed in February 2018. It is more ‘just’ because to dismiss the plaintiff’s claim will deprive it of the chance to establish its claim. It is more efficient because when the facts said to support the claim are adduced, the whole matter can be judged with a full understanding of all relevant evidence. It is more timely and cost effective because the proceeding has progressed a long way through the interlocutory stages and the parties have incurred considerable expense in connection with the proceeding so far and, despite the need to tidy up the statement of claim, the whole matter can be heard and determined on all the evidence early next year.
Conclusion
For these reasons, the following orders will be made:
(a) the defendant’s application to summarily dismiss the plaintiff’s claim is dismissed;
(b) the plaintiff’s application to file and serve a further amended statement of claim is adjourned to a date to be fixed;
(c) by a date to be fixed, the plaintiff shall file an affidavit exhibiting a proposed further amended statement of claim;
(d) the further hearing of the plaintiff’s summons filed on 12 May 2017 is adjourned to a date to be fixed;
(e) the plaintiff and the first defendant’s cost of the first defendant’s summons filed 7 June 2017 shall be their respective costs in the proceeding; and
(f) the costs of the plaintiff’s said summons are reserved.
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