James v Inghams Enterprises Pty Ltd

[2000] TASSC 23

[2000] TASSC 23

CITATION:              James v Inghams Enterprises Pty Ltd [2000] TASSC 23

PARTIES:  JAMES, Grantley
  v
  INGHAMS ENTERPRISES PTY LTD

(ACN 008 447 345)

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  Original
FILE NO/S:  1276/1995
DELIVERED ON:  29 March 2000
DELIVERED AT:  Hobart
HEARING DATES:  22, 24 March 2000
JUDGMENT OF:  The Master

CATCHWORDS:

Procedure - Supreme Court procedure - Tasmania - Practice under the Rules of Court - Amendments - Defence - Whether proposed amendment futile - Whether amendment precluded by Limitation Act 1974.

Rules of the Supreme Court (Tas), O31, r1.
The Commonwealth v Verwayen (1990) 170 CLR 394, followed.
Weldon v Neal (1887) 19 QBD 394, distinguished.
Aust Dig Procedure [67]
Contracts - Implied term.
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363; Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, followed.
Aust Dig Contracts [18]

REPRESENTATION:

Counsel:
           Applicant:  A R McKee
           Respondent:  S Taglieiri
Solicitors:
           Applicant:  Gunson Pickard & Hann
           Respondent:  Phillips Taglieri

Judgment Number:  [2000] TASSC 23
Number of Paragraphs:  19

Serial No 23/2000
File No 1276/1995

GRANTLEY JAMES v
INGHAMS ENTERPRISES PTY LTD (ACN 008 447 345)

REASONS FOR JUDGMENT  THE MASTER

29 March 2000

1. The defendant has applied pursuant to the Rules of the Supreme Court, O31, r1 for leave to deliver an amended defence, incorporating, for the first time in the action, a counterclaim.

1. The action was commenced by writ filed 21 August 1995.  The plaintiff has alleged that on or about 4 August 1994, whilst he was employed at the defendant's chicken processing factory, he injured his shoulder when a pallet lifter he was pulling snagged in a hole in the factory floor.  There is a claim that the plaintiff returned to work on light duties, in the course of which he aggravated his injury when lifting some crates of chickens.  The claim is framed in negligence; breach of the employer's contractual duty to provide and maintain a safe place and system of work; and breach of certain statutory duties imposed upon the employer, pursuant to the Industrial Safety Health and Welfare Act 1977 and regulations made thereunder.

1. The defendant delivered a defence dated 2 November 1995 which consists solely of non-admissions and denials.  In particular, the defence contained no allegations that the plaintiff's injury had been caused or contributed to by his own negligence.

1. The plaintiff's claim has been ready for trial for some time.  On 2 September 1999, the court ordered, by consent, that the defendant's solicitor attend a compulsory conference and sign and return the certificate of readiness.  The certificate remains unsigned.

1. On 24 February 2000, the defendant filed its application for leave to deliver an amended defence and counterclaim in terms of a document annexed to the application dated 24 February 2000.  Since then, the defendant has delivered two further proposed amended defences, the most recent dated 21 March 2000.  During the course of the hearing, the defendant's solicitor withdrew part of the proposed amended defence, being par12, in which a plea of contributory negligence was made under the Tortfeasors and Contributory Negligence Act 1954. 

1. The amended defence now proposed includes a plea that it was an implied term of the contract of employment that if the plaintiff suffered injury, in part, as a result of his own negligence or fault:

"(a)… then the Plaintiff would not be entitled to claim or receive any damages for the injury as against the Defendant; or alternatively

(b)… then the damages recoverable by the Plaintiff would be reduced by such an extent as was just and equitable having regard to the Plaintiff's share in the responsibility for the damage."

Thereafter appears the following particulars:

"The term is to be implied as a fact in that:

(a)the term was reasonable and equitable;

(b)the term was necessary to give business efficacy to the contract;

(c)the term is obvious;

(d)the term is capable of clear expression;

(e)the term does not contradict any expressed term of the contract (if there were any)."

Following the plea of the implied term, there is an allegation, which is particularised, that the plaintiff "negligently failed to take reasonable care for his own safety in the performance of his duties".

1. The defendant, in the proposed counterclaim, wishes to allege that it was an implied term:

"… that the Plaintiff would not act negligently in respect of his own safety and or that:

(a)if the Plaintiff's negligence caused an injury to the Plaintiff then the Plaintiff would be liable to the Defendant for the total damages that may be awarded to the Plaintiff in any claim for personal injuries by the Plaintiff against the Defendant; or alternatively

(b)if the Plaintiff suffered damage as a result partly of his own fault and partly by reason of the fault of the Defendant then the Plaintiff would be liable to the Defendant for such part of any amount awarded … as was proportionate to or just and equitable having regard to the Plaintiff's contribution to the damage."

Thereafter follows a plea that the plaintiff was negligent and a prayer for relief in which the return of the whole or part of any damages awarded is claimed. 

1. The plaintiff's solicitor submitted that the proposed amendment should not be permitted for a number of reasons, including that the defence and counterclaim proposed to be raised cannot possibly succeed.

1. In The Commonwealth v Verwayen (1990) 170 CLR 394 at 456, Dawson J said:

"Of course, an amendment which is futile because it is obviously bad in law will not be allowed.  But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed.  That will be an issue upon trial."

1. The conditions necessary for a term to be implied were set out by Lord Simon, delivering the advice of the majority of the Privy Council, in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 at 376 as follows:

"Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."

1. Facts capable of supporting the conclusions required to satisfy conditions (2) and (3) above must exist.  Facts to be asserted should be pleaded.  The defendant does not propose to plead in the amended pleading, any fact, matter or circumstance which, if found to exist, would give rise to, at least, a possibility that the term sought to be implied was necessary to give efficacy to the transaction.  In par1 of the statement of claim, the plaintiff alleges that he was employed at the defendant's chicken processing factory "as second in charge of the boning section".  The suggestion, without special facts being asserted, is untenable that such an employment contract would be ineffective if it did not contain a term that in the event that the employee was injured, wholly or partly as a result of his own negligence:

(a)      he would not be entitled to claim or receive any damages;

(b)      the damages would be reduced in respect of the employee's contributory negligence;

(c)      he would be liable to the defendant to repay the total amount of damages awarded to him; or

(d)he would be liable to repay to the defendant such part of the damages awarded to him as was just and equitable, having regard to his responsibility for the injury.

1. Whether a finding of fact is possible (as opposed to unreasonable) is a question of law, Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355 - 356. Although there need not be evidence of the existence of special facts at this stage, the facts to be relied upon should be pleaded. There being no special fact, matter or circumstance pleaded which, if proved, would give rise to even the possibility of a conclusion of fact that the term proposed is necessary and obvious, the term is not capable of being implied. The claim that the implied term proposed is necessary to give business efficacy to the contract is hopeless, as is the claim that the term proposed is, in the words of Mackinnon LJ "so obvious that it goes without saying". Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227.

1. The defendant's solicitor has not been able to refer me to any case concerning any class of contract decided in any jurisdiction at any time in which the court has implied a term confirming or altering the legal consequences which would normally follow the negligence or breach of contract of a contracting party.

1. Allowing the amendment would be futile because it is obviously bad in law.  Accordingly, the application to amend will be dismissed.

1. In addition to the contention that the pleading proposed is futile, the plaintiff's solicitor submitted that the proposed pleading should not be allowed:

(i)because time has expired for the institution of the proposed counterclaim pursuant to the Limitation Act 1974, s5;

(ii)pursuing the counterclaim would be of no benefit to the defendant because even if the defendant was successful, the plaintiff would be entitled to recover the damages repaid to the defendant pursuant to the Workers Rehabilitation and Compensation Act 1988, s97(1)(c); and

(iii)because allowing the amendment would prejudice the plaintiff by delaying the trial of the action.

1. I would not have declined to give leave to amend on any of these alternate bases.  As to the limitation argument, a cause of action accrues on the breach of contract and not on the suffering of damage (Gibbs v Guild  (1881) 8 QBD 296 at 302). On the defendant's case, that breach occurred at the time of the plaintiff's injury, namely on or about 4 August 1994. It is arguable that the defendant's counterclaim, if allowed, would be "in respect of personal injuries" and so would need to have been commenced by 4 August 1997. However, if the pleading were allowed, there would be nothing to stop the plaintiff, in his defence to the counterclaim, pleading the limitation statute. The rule in Weldon v Neal (1887) 19 QBD 394 would not apply as it is not a case where the claimant seeks to take advantage of a writ issued within time to amend a pleading by adding a new cause of action to defeat the statute.

1. The Workers Rehabilitation and Compensation Act, s97(1)(c), requires employers who are not self-insurers to take out insurance which indemnifies employees for liabilities incurred as a result of injury to employees. At face value, the argument under the Workers Rehabilitation and Compensation Act is attractive, and although it is agreed that the defendant employer holds a policy of insurance as required by s97, it would be inappropriate to determine, on the basis of the limited materials available on this application, that the defendant's insurer (which is not a party to these proceedings) would be obliged to indemnify the plaintiff were he to be found liable on the proposed counterclaim.

1. Finally, if I had allowed the amendment, I am satisfied that some delay would have occurred, principally because for the first time the plaintiff's advisers would have needed to have investigated and considered whether the plaintiff was partially responsible for his injuries.  I would not, however, have been satisfied that such delay would have been sufficiently lengthy and would have imposed such financial or personal strain on the plaintiff to justify preventing the defendant from litigating in these proceedings all of the issues sought to be raised to determine the whole of the controversy between the parties.  The plaintiff did not make an affidavit asserting prejudice.

1. For the reasons set out earlier, the application is dismissed.