John Holland Pty Ltd v Miami Gold (WA) Pty Ltd
[2006] WASC 141
JOHN HOLLAND PTY LTD -v- MIAMI GOLD (WA) PTY LTD & ORS [2006] WASC 141
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 141 | |
| Case No: | CIV:2049/2004 | 12 MAY 2006 | |
| Coram: | MASTER NEWNES | 21/07/06 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Application to amend refused | ||
| B | |||
| PDF Version |
| Parties: | JOHN HOLLAND PTY LTD (ACN 050 242 147) MIAMI GOLD (WA) PTY LTD (ACN 009 390 925) BELLEVUE APARTMENTS PTY LTD (ACN 008 685 210) RODNEY ALAN SMITH MALCOLM RAYMOND DAY |
Catchwords: | Practice and procedure Application to amend statement of claim Principles to be applied Building contract Whether proposed pleading disclosed reasonable cause of action Whether embarrassing Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 1 r 4B |
Case References: | Atkinson v Fitzwater [1987] 1 WLR 201 Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Built Interiors Pty Ltd v Three Dinosaurs Pty Ltd [2003] NSWCA 290 Dare v Pulham (1982) 148 CLR 658 Frank Jasper Pty Ltd v Deloitte Touche Tohmatsu (A Firm) [2006] WASC 24 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32 Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Bysouth v Shire of Blackburn & Mitcham (No 2) [1928] VLR 562 Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133 Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 Waltons Stores (Interstate) Ltd v Maher (1988) 76 ALR 513 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MIAMI GOLD (WA) PTY LTD (ACN 009 390 925)
First Defendant
BELLEVUE APARTMENTS PTY LTD (ACN 008 685 210)
Second Defendant
RODNEY ALAN SMITH
Third Defendant
MALCOLM RAYMOND DAY
Fourth Defendant
Catchwords:
Practice and procedure - Application to amend statement of claim - Principles to be applied - Building contract - Whether proposed pleading disclosed reasonable cause of action - Whether embarrassing - Turns on own facts
(Page 2)
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4B
Result:
Application to amend refused
Category: B
Representation:
Counsel:
Plaintiff : Mr P G Clifford
First Defendant : Ms P E Cahill
Second Defendant : Ms P E Cahill
Third Defendant : Ms P E Cahill
Fourth Defendant : Ms P E Cahill
Solicitors:
Plaintiff : Minter Ellison
First Defendant : Jackson McDonald
Second Defendant : Jackson McDonald
Third Defendant : Jackson McDonald
Fourth Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Atkinson v Fitzwater [1987] 1 WLR 201
Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Built Interiors Pty Ltd v Three Dinosaurs Pty Ltd [2003] NSWCA 290
Dare v Pulham (1982) 148 CLR 658
Frank Jasper Pty Ltd v Deloitte Touche Tohmatsu (A Firm) [2006] WASC 24
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32
Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365
(Page 3)
Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Case(s) also cited:
Bysouth v Shire of Blackburn & Mitcham (No 2) [1928] VLR 562
Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133
Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251
Waltons Stores (Interstate) Ltd v Maher (1988) 76 ALR 513
(Page 4)
1 MASTER NEWNES: This is an application by the plaintiff for leave to amend its statement of claim in terms of a minute of proposed further substituted statement of claim filed on 10 January 2006 ("the Minute"). The application is opposed by the defendants.
The proposed pleading
2 In the Minute, the plaintiff pleads that it carries on the business of a design, engineering and construction contractor. The first defendant was the sole shareholder of the second defendant and the third and fourth defendants were the directors and shareholders of the first defendant and directors of the second defendant.
3 It is alleged that, from 31 October 2002 to 22 October 2004, the second, third and fourth defendants were the registered proprietors of a property known as 2 Bellevue Terrace, West Perth. It is alleged in par 6 of the Minute that, from about 22 October 2004, the third defendant has been the registered proprietor of a property known as Unit 4 at that location and in par 7 that the fourth defendant has been the registered proprietor of Unit 5 at that location.
4 It is alleged in par 8 of the Minute that on 16 August 2002 the first defendant, on behalf of the defendants, entered into a written contract with the plaintiff by which the plaintiff agreed to carry out work on the design, engineering and construction of an apartment building at 2 Bellevue Terrace.
5 The plaintiff alleges in par 9A of the Minute that the contract was varied by a written agreement made between the parties on 20 August 2003 for the construction and installation of piling.
6 In par 9B of the Minute it is alleged that on or about the same date the parties entered into a collateral contract that practical completion of the contract work was to be achieved when the works were available for sale as strata titled units and that the obligation in cl 35.3 of the contract, that the works be reasonably fit for use and occupation, need not be met in order to achieve practical completion.
7 It is pleaded in par 11.2 of the Minute that cl 40.1 of the General Conditions of the contract provided that the superintendent or the defendants may vary the works provided, among other things, a variation may only be directed by the defendants and it must not be commenced or carried out by the plaintiff, and the plaintiff is not entitled to any payment for a variation, unless the superintendent has in writing requested the
(Page 5)
- plaintiff to value the variation and the superintendent and the plaintiff have agreed in writing on the adjustment to be made to the contract sum and any change to the date for practical completion, or have agreed that the variation will be valued under cl 40.5 of the General Conditions.
8 Clause 40.1 also provides, in effect, that if the plaintiff considers that any direction made by the superintendent or the defendants constitutes a variation but is not so expressed, then, before starting the work, the plaintiff may give written notice to the superintendent detailing the extent of the work the plaintiff considers to be a variation and that notice is a condition precedent to the plaintiff's entitlement to maintain any claim for a variation. The plaintiff is not to commence work on the disputed variation until the dispute has been resolved and the superintendent gives notice to the plaintiff to that effect.
9 It is pleaded in par 12 of the Minute that, despite those provisions, the defendants and the superintendent failed to comply with, and did not insist that the plaintiff comply with, those procedures for making a variation claim under cl 40.1. It is alleged that the superintendent orally requested that the plaintiff value variations and there was not the exchange of communications between the superintendent and the plaintiff contemplated by cl 40.1.
10 It is then pleaded in par 13 as follows:
"13(i) Further, the [defendants] and the Superintendent adopted a practice of approving variations directed by the [defendants] or the Superintendent as agent of the [defendants] and claimed by the plaintiff by noting 'approved' on the variation documents and/or giving oral directions that the varied Works be carried out.
Particulars
- The plaintiff relies on the particulars in paragraph 12 above to the extent that the variations referred to in those particulars were identified as 'approved variations' in Schedule A.
13(ii) By the conduct pleaded in paragraphs 12, 13(i) and the particulars set out in Schedules A and B to this pleading the defendants represented to the plaintiff that varied works would be paid for at reasonable rates or prices.
(Page 6)
- 13(iii) In reliance upon the matters pleaded in paragraphs 13, 13(i) or 13(ii) and the particulars set out in Schedules A and B to this pleading the plaintiff, to its detriment, carried out the whole of the works particularised in Schedules A and B to this pleading the cost or price of which is reasonable."
11 It is pleaded in par 14 as follows:
"14. The plaintiff is entitled to payment for work done in relation to variations directed by the [defendants] or the Superintendent as agent of the [defendants] as pleaded in paragraph 12 herein and set out in the Schedule A particulars on the following basis:
a) the variations were directed by the Superintendent either orally or in writing;
b) the plaintiff carried out and completed the work the subject of these variations, and the [defendants have] waived or [are] estopped from relying on non-compliance with clause 40.1 as a ground for withholding payment to the plaintiff."
12 It was submitted on behalf of the defendants that an estoppel of the sort contended for is not made out simply by showing that the parties had not adhered to the contractual provisions. It is necessary to show something in the nature of a representation by the defendants that they would not enforce the conditions precedent to payment in cl 40.1, together with reliance upon that representation by the plaintiff with the consequence that the plaintiff would suffer detriment if the defendants resiled from that position.
13 It was submitted that par 13 did not plead such a representation. It simply pleaded a representation that varied works would be paid for at reasonable rates or prices. It did not plead any representation that conditions precedent to the entitlement to payment as set out in cl 40.1 of the General Conditions would not be insisted upon in relation to certain variations or in variations generally. There was also no basis for the plea that the plaintiff would be entitled to be paid, at reasonable rates or prices or otherwise, for any varied work at all.
(Page 7)
14 Counsel for the defendants also argued that in order to plead a case of estoppel, the plaintiff would have to identify specifically the relevant representation by the defendants which it is alleged arose from the course of conduct or practice pleaded and when that representation was made. Counsel argued that as the representation was alleged to arise from a course of conduct, it could not arise from the very outset of the contract but only after the course of conduct had continued long enough to give rise to the representation. At present the point at which it was said the representation was made was not identified. It would also be necessary to identify in the pleading the work which the plaintiff says it did based upon the assumption that it would be paid for it despite the fact that the cl 40.1 requirements had not been met.
15 The defendants' counsel accepted that, as a matter of form, the pleading could be remedied. The difficulty, it was submitted, was that the facts relied upon did not support it. It was evident from the Minute that there was no practice of the sort apparently relied upon. Such a practice must have an identified starting point and a consistency that would reasonably give rise to an assumption on the part of the plaintiff that it was the way in which the parties were to treat variations notwithstanding the contractual provisions, and that the plaintiff did not need to comply with any of the cl 40.1 provisions to ensure that it was paid.
16 There is annexed to the statement of claim, as Schedule A, a document setting out a large number of variations carried out by the plaintiff. In respect of each, there is set out the date upon which the variation order was submitted by the plaintiff, the date of the principal's response, a description of the work, a short summary of the facts relating to the request for a variation, the estimated cost, the price submitted by the plaintiff and the price approved by the principal. The document apparently covers a period from September 2002 to December 2004.
17 Counsel for the defendants pointed out that it appeared from Schedule A that from an early stage and apparently throughout the contract works there were variations approved at the full price submitted by the plaintiff, some approved at a lesser sum and some not approved at all. Counsel submitted that what it evidenced was not a consistent course of conduct but, on the contrary, the absence of any consistent course of conduct of the sort relied upon for the estoppel.
18 Counsel submitted that the absence of any plea as to the relevant representation, assumption and reliance, and the failure to identify the
(Page 8)
- work said to have been carried out in reliance on the representation, was the result of the absence of the facts necessary to ground such a plea.
19 It was also submitted that the claim in pars 20 to 25 of the Minute was untenable. Those pleas are as follows:
"20. At various times during the performance of the Contract Works the Superintendent directed or approved variations to the Works.
Particulars
- Particulars of the variations are provided in Schedule A.
21. The plaintiff performed the work required to complete each of the variations referred to in Schedule A, and submitted claims for payment for the said variations to the Superintendent in accordance with Clause 42.1 of AS2124-1992.
Particulars
- Particulars of the plaintiff's claims for payment are provided in column 2 under the heading 'Price Submitted' in Schedule A.
22. The Superintendent has failed to determine the value of the variations referred to as 'Not Approved' in Schedule A.
23. On the various dates referred to in Schedule A in the 'Price Approved Date' column, in accordance with clause 42.1 of the General Conditions pleaded in paragraph 17(c) herein, the Superintendent issued payment certificates to the plaintiff and the defendant certifying the plaintiff is entitled to be paid the sum of $2,407,220.31 for Schedule A Variations.
24. The defendant has paid the plaintiff the sum of $11,710,352.47 exclusive of GST and the sum of $322,731.54 is presently due and payable to the plaintiff for performing the Variation Works in Schedule A.
| $9,442,275.00 |
| $2,729,951.85 |
| $12,172,226.85 $11,710,352.47 |
$461,874.38 | |
| $139,142.53 |
| $322,731.54 [sic] |
25. By reason of the matters pleaded at paragraphs 20 to 24 inclusive herein the plaintiff is entitled to and the defendant has failed or refused to pay the plaintiff the sum of $322,731.54 plus GST which is a debt due and owing to the plaintiff for unpaid Variations pursuant to the terms of the Contract."
20 Counsel submitted that what is pleaded, therefore, is simply that the superintendent directed or approved variations to the works but has not determined the value of some of the variations and has not paid the plaintiff the full amount claimed for the variations.
21 The claim is plainly untenable as the plaintiff does not plead that the requirements of certification in cl 40.1 have been met, nor is there any plea of circumstances which would entitle the plaintiff to payment although those requirements had not been met.
22 The plea in par 26 is as follows:
"26. In the alternative to paragraph 25 hereof in breach of the term of the Contract pleaded in paragraph 11 herein as varied by the practice adopted by the defendant pleaded in paragraphs 12 and 13 herein the defendant failed or refused to pay the plaintiff the sum of $322,731.54 plus GST for unpaid Variations which is due and owing under the Contract."
23 Counsel for the defendants submitted that, in its terms, the plea appeared to rely, not on estoppel or waiver, but on a variation by conduct
(Page 10)
- of the building contract. The elements of a plea of contractual variation – such as when it was effected, what was the consideration for the variation and what were the terms of it – have not been pleaded. If, on the other hand, the plea was intended to be simply a reiteration of the estoppel plea, then it was defective for the reasons that had already been advanced.
24 The defendants also attacked the claims in pars 27 to 32 of the Minute. Those pleas, so far as relevant, are as follows:
"27. The Schedule A Variations includes the variations referred to in column 2 of Schedule A (the column 2 Variations) where the Superintendent's determination of the value of the varied Work is disputed by the plaintiff.
28. The plaintiff is entitled to a reasonable value for the work performed to complete the column 2 Variations to be determined by the Superintendent in accordance with Clause 40.5 of AS2124-1992.
29. The reasonable value of the work performed by the plaintiff to complete the column 2 Variations determined in accordance with Clause 40.5 of AS2124-1992 is $322,731.54 plus GST.
Particulars
- …
30. The Superintendent and or the Certifier determined the amount payable to the plaintiff for the column 2 Variations at nil amount.
Particulars
- …
31. The Superintendent has failed or refused to certify the sum of $322,731.54 as payable by the defendants to the plaintiff for the said Variations.
32. In breach of the term of the Contract pleaded in paragraph 17(f) herein or alternatively, the implied term pleaded in paragraph 18 herein the defendant has failed or refused to ensure that the Superintendent valued the column 2 Variations in accordance with Clause 40.5 of
- AS2124-1992 to arrive at the reasonable value for the said variations of $322,731.54."
25 It was submitted that there was no basis for the plea that, because the plaintiff disputed the superintendent's valuation of the work, the plaintiff was entitled to be paid a reasonable value for the work. That could not arise from cl 40.5 of the contract and no other basis was pleaded for it. There was also no indication of the basis upon which the "reasonable value" of the work had been calculated.
26 Counsel argued that it was not apparent what claims were sought to be advanced in pars 33 to 36 of the Minute and that par 35 repeated, in effect, par 32. The latter point was conceded by the plaintiff's counsel who said that par 35 should be omitted.
27 The defendants also attacked the unjust enrichment claim pleaded in pars 65 to 70 of the Minute. That pleading is as follows:
"65. In the alternative to the claims based upon the General Conditions, the implied terms and the practise of the parties in dealing with varied work pleaded in paragraphs 11 to 64 herein, during the course of the performance of the Work under the Contract the Superintendent requested the plaintiff to perform additional work and change the character or quality of material and work.
Particulars
- The plaintiff repeats paragraphs 20 to 35, 47(a) to (d), 48 to 55 and 64.
66. Pursuant to the requests pleaded in paragraph 65 herein the plaintiff performed additional work and changed the character and the quality of the work under the contract.
Particulars
- The plaintiff repeats paragraphs 20 to 35, 47(a) to (d), 48 to 55 and 64.
67. The Principal has accepted the benefit of the work performed by the plaintiff pursuant to the requests.
(Page 12)
- 68. The plaintiff is thereby entitled to recover by way of quantum meruit on the basis of equitable restitution.
69. The reasonable value of the work performed on a quantum meruit basis is the sum of the costs claimed by the plaintiff in paragraphs 36, 47(d), 56 and 64.
70. Pursuant to paragraphs 65 to 69 the plaintiff is entitled to payment of $1,939,633.80 (including GST) on a quantum meruit."
28 It was submitted on behalf of the defendants, first, that no such claim lies where there is a contract which provides for the method of payment of variation work. Counsel referred to the decision of the New South Wales Supreme Court in Built Interiors Pty Ltd v Three Dinosaurs Pty Ltd [2003] NSWCA 290 at [57] - [58]. Secondly, it was submitted, it appears to include not only the costs of variations of which the defendants have had the benefit, but also the costs of alleged delays and disruption caused to the plaintiff. Such costs are not recoverable on a claim of this nature.
29 A number of other complaints were made by the defendants about the Minute. In pars 44 to 46 of the Minute it is alleged that the superintendent and the certifier failed to certify practical completion until 19 November 2004, whereas the plaintiff alleges practical completion was achieved on 12 August 2004. It was submitted that no relief appears to be claimed in relation to those allegations and nor do they seem relevant to any other claim.
30 The plaintiff also claims for extensions of time and delay costs. It is alleged in par 19 that, on 24 September 2002, the plaintiff provided the superintendent with a construction programme prepared by the plaintiff. It is alleged in par 38 that "The Construction Program" specified certain 'latest dates' by which the defendants were to indicate its requirements for certain finishes. In par 39 the plaintiff alleges that notification to it of that information was essential to enable it to achieve practical completion by the due date. In par 40 it is alleged that, in breach of cl 35.5(b) of the contract, the implied term pleaded in par 18, the duty pleaded in cl 17(f), alternatively cl 17(g), of the Minute, the defendants failed to provide, or failed to ensure that the superintendent provided, the details within time or within a reasonable time. It is then pleaded in par 42 that a superintendent acting honestly and fairly should have granted an extension of time to 12 August 2004 and the plaintiff was entitled to that extension.
(Page 13)
31 Clause 35.5 in fact provides that if the contract is or will be delayed in reaching practical completion by a cause described in par 35.5(a) or par 35.5(b), and within 28 days after delay occurs the contractor gives the superintendent a written claim for an extension of time for practical completion setting out the facts on which the claim was based, the contractor shall be entitled to an extension of time. The claim for an extension of time must include written notice of the number of days claimed. There are then certain provisions dealing with the grant by the superintendent of an extension of time and the matters which the superintendent is entitled to take into account in doing so.
32 It was submitted that there could not therefore relevantly be a breach of cl 35.5(b). Nor was it apparent how, as alleged in par 40 of the Minute, the failure to provide, or ensure the superintendent provided, the details referred to could be a breach of the duty of the defendants to ensure the superintendent acted honestly and fairly, pleaded in par 17(f), or a breach of the duty of the superintendent, pleaded in par 17(g), to direct the plaintiff as to discrepancies found by the plaintiff.
33 It was further submitted that there was no plea of the matters which under cl 35.5 were a precondition to any extension of time and therefore no case was pleaded that would entitle the plaintiff to an extension of time.
34 The plaintiff objected to pars 5, 6 and 7 on the ground that they were surplusage and therefore embarrassing. The plaintiff objected to par 9B on the basis that it was untenable. The plea was originally of a collateral contract to the building contract. It was now pleaded as collateral to the piling contract. The collateral contract was still inconsistent with the main contract and is therefore untenable.
35 The plaintiff objected to the implied terms pleaded in par 18 and, in particular, to par 18(c) which pleads an implied term that the defendants, their agents and superintendent would comply with the times and requirements stated in the "Construction Program" that applied to the superintendent or the defendants.
36 Counsel argued that there was nothing capable of giving rise to a requirement that the defendants comply with a construction programme. Clause 33.2 of the contract enabled the builder to provide a construction programme, and entitled the superintendent to require the builder to do so, but the obligations of such a programme were imposed on the plaintiff,
(Page 14)
- not on the defendants. Nor was the "Construction Program" pleaded in par 18(c) identified.
37 It was also submitted that the claim made in par 75 was untenable as the calculation of the alleged loss in the particulars was misconceived.
The plaintiff's submissions
38 The plaintiff's counsel submitted that the representation founding the estoppel was pleaded to be a result of conduct, the details of which were set out in the Schedule. The plaintiff had carried out work it had been asked orally to do and when detailed costs were submitted, some had been paid, but some were paid only in part and some were not paid at all. Claims for variations had thereby been wrongly rejected.
39 On the plaintiff's entitlement to be paid a reasonable price for the variation work, counsel referred to cl 40.5(c) of the contract, the effect of which, he contended, was that the plaintiff is entitled to be paid at reasonable rates or prices for any work for which no other specific procedure for valuation is specified.
40 As I understood counsel's submission, in effect the plea of estoppel was therefore based on a representation that the method of instruction as to variations would be informal and the requirements of cl 40.1 would not be enforced. As there was no agreed valuation of the variations and no specific procedure for valuing them, cl 40.5 of the contract then had the effect that in respect of such variations a reasonable price would be paid.
41 It was submitted that the claims pleaded in pars 20 to 25 built upon the estoppel claim to found a claim in contract based on the estoppel. That is, the contract claim arose because the defendants were estopped from asserting that cl 40.1 entitled them to refuse to pay for the variations which the plaintiff had carried out at the defendants' request.
42 Counsel accepted that an unjust enrichment claim was open only to the extent the variations fell wholly outside the contract and submitted that the plea was to that effect.
43 As to the claim for delay and disruption costs in the unjust enrichment claim, counsel referred to Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 and submitted that it recognised two possible ways of valuing unjust enrichment – the value of the work that the party has taken the benefit of and, depending upon the equities, the cost of doing the
(Page 15)
- work that the party has taken the benefit of. The plea was therefore unobjectionable.
44 I understood counsel for the plaintiff to acknowledge that there might be a logical flaw in the calculation of loss in the particulars of par 75 of the Minute but he submitted that, if there was, that was a matter that could adequately be addressed by the defendants in their defence.
The relevant principles
45 The general principles to be applied on an application of this sort are well known. A court will not grant leave to amend a pleading into a form which is liable to be struck out: Hooker Corporation Ltd v Commonwealth (1986) 65 ACTR 32 at 38; Atkinson v Fitzwater [1987] 1 WLR 201 at 214 - 215. A plea will be struck out as disclosing no reasonable cause of action or defence (as the case may be) only if it is so obviously untenable that it cannot succeed, and great care must be exercised to ensure that a party is not improperly deprived of their opportunity to put their case at trial: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130. In that regard, Courts at first instance should be careful not to risk stifling the development of the law: Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373.
46 In determining whether a pleading is likely to prejudice, embarrass or delay the fair trial of the action, it is fundamental that a party is entitled to a statement of the opponent's case sufficiently clear to allow the party a fair opportunity to meet it: Dare v Pulham (1982) 148 CLR 658 at 664. A pleading may therefore be struck out where it is vague, ambiguous or pleaded at too great a level of generality so as to leave the other party in doubt as to how to respond to the pleading: Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 413; Banque Commerciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J.
47 I would, however, reiterate what I said in Frank Jasper Pty Ltd v Deloitte Touche Tohmatsu (A Firm) [2006] WASC 24, namely, that the question of whether a pleading is likely to prejudice, embarrass or delay the fair trial of the action in any particular case invariably involves matters of judgment and degree. The approach to be taken to such an objection to a pleading, or proposed pleading, must be directed to the attainment of the objectives set out in O 1 r 4B. Such an approach requires a degree of flexibility that may not always be consistent with the practices of earlier times.
(Page 16)
48 The question of whether a pleading is so defective that it should be struck out is not then to be answered by any mechanical application of the rules of pleading. It is generally to be answered by whether or not the pleading serves the fundamental objective of pleadings and whether any significant deficiencies in it can adequately be overcome by the provision of particulars or by some other means. While it is necessary that a pleading set out with reasonable clarity and detail the case that the other party must meet, the focus must be on whether the pleading is sufficient for the fair and proper disposition of the case, not whether it complies meticulously with the rules of pleading.
Is the Minute defective?
49 In my view, the estoppel plea is defective. As emerged in the course of argument, the case sought to be advanced by the plaintiff is that by the defendants' alleged practice of not complying with cl 40.1 but giving oral instructions for variations, and the defendants' knowledge that the plaintiff acted upon those oral instructions and carried out the work without the provisions of cl 40.1 having been complied with, the defendants are estopped from relying upon the requirements of cl 40.1 as a condition of the plaintiff's entitlement to payment.
50 In relation to the amount which the plaintiff is entitled to be paid for the work, the plaintiff then seeks to rely upon provisions of the contract which it says establish an entitlement to be paid a reasonable price.
51 That, however, is not how the case is currently pleaded, or at least it is not at all clear that that is what is intended by the Minute. Rather, it is pleaded in par 13(ii) of the Minute that by the practice of non-compliance with cl 40.1 and giving informal directions for variations, the defendants represented that the varied works would be paid for at reasonable rates or prices. I should say that how that conduct would give rise to such a representation is not at all clear.
52 I also accept the defendants' complaint that the pleading does not say at what point the representation is said to have been made. The representation is alleged to be constituted by a course of conduct. As it stands, the Minute, as expanded by the annexure, appears to allege that it arose from the very outset of the contract. As counsel for the defendants observed, where a course of conduct is relied upon it is difficult to see how that could be the case. In any event, the time at which the representation is alleged to have been made, and when the plaintiff acted upon it, needs to be identified. It is a point of some significance given
(Page 17)
- that, on its face, the material appearing in the annexure to the Minute does not appear to reflect any consistent course of conduct of the sort alleged.
53 In my view, as it is currently pleaded the estoppel plea is defective and I would refuse to allow the amendments concerned.
54 I also accept that the pleas in pars 20 to 25 in the Minute are objectionable. It is not pleaded, or at least not clearly pleaded, that the requirements of certification in cl 40.1 have been met as to an agreed valuation of the work, or agreement has been reached that it is to be valued under cl 40.5 (and that the amount claimed is such value), and it is not clear how the pleas are said to "build upon" the estoppel plea. There is no other plea of circumstances that would entitle the plaintiff to payment despite the cl 40.1 requirements not having been met.
55 I also accept that the plea in par 26 as it stands is defective. It is not clear whether or not it is intended to plead a contractual variation, but if it is, it does not adequately plead out that variation. If it simply reiterates the estoppel plea, it is embarrassing.
56 In my view, the pleas in pars 27 to 32 are objectionable. It is not apparent on what basis it is asserted that, because the superintendent's determination of the value of the varied work is disputed by the plaintiff, the plaintiff is entitled to a reasonable value for that work. Nor is it clear why it is said that value would arise for determination by the superintendent in accordance with cl 40.5 of the contract. Clause 40.5 provides:
"Where the Contract provides that a valuation shall be made under clause 40.5, the Principal shall pay or allow the Contractor or the Contractor shall pay or allow the Principal as the case may require, an amount ascertained by the Superintendent as follows:
[and there then follows the methods of valuation]."
57 It may be that the plaintiff seeks to rely on cl 40.3, which provides that unless the superintendent and the contractor agree upon the price for a variation, the variation directed and approved by the superintendent under cl 40.1 shall be valued under cl 40.5, and upon cl 40.5(c) which provides that in the absence of applicable specific rates or alternatively a relevant Bill of Rates, reasonable rates or prices shall be used by the superintendent. But if that is the case that is sought to be advanced it does
(Page 18)
- not emerge with any clarity, if it emerges at all, from the Minute as it stands.
58 I accept for present purposes the position of the plaintiff's counsel that the unjust enrichment claim in pars 65 to 70 is based upon an alternative proposition that the work carried out by the plaintiff falls entirely outside the contract. I should, however, say that that by no means appears clearly from the terms of the pleading and that is something that should be attended to in any subsequent proposed pleading.
59 InBuilt Interiors Pty Ltd v Three Dinosaurs Pty Ltd (supra), the New South Wales Court of Appeal cited with approval the following passage from the judgment of the trial Judge:
"Moreover, as it seems to me, the law does not permit recovery on a quantum meruit, or unjust enrichment, basis where there is, between the parties, as there was in this case, an existing and enforceable contract, which covers the situation. In my opinion, the amount claimed in respect of unapproved variations relates to works performed within the scope of the contract in order to complete that which was contracted for. In so far as the claims, in truth, constituted 'variations' as defined, then the contract provided for the authorisation of such variations, for the valuation of the work done, and for the resolution of disputes. That being so, there is no room for the application of principles of quantum meruit or unjust enrichment (Pavey and Mathews Pty Ltd v Paul 162 CLR 221 and Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251, especially Priestley JA at 275)."
60 That passage was relied upon by the defendants on this application. It does not seem to me, however, to be necessarily decisive of the plaintiff's claim. The question is whether the variations which are the subject of this alternative claim were variations within the contract or work falling wholly outside the contract. I do not consider that that is a matter appropriately to be determined on an application of this nature. As I understand the plaintiff's case to be put (or intended to be put), in this particular head of claim, on the basis that the variations in question fell wholly outside the contract, I would not uphold the defendants' objection to these pleas.
61 Whether or not the plaintiff is entitled to recover delay and disruption costs is not a matter which, in my view, is appropriately
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- determined on this application. The principles of restitutionary relief have not yet been exhaustively or definitely set out by the High Court and the specific relief that may be obtained cannot be prescriptively stated. In Pavey & Matthews Pty Ltd v Paul (supra), Deane J (at 263) described the concept of monetary restitution as involving "the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or 'enrichment' actually or constructively accepted." His Honour went on to say that while ordinarily that will correspond simply to the fair value of the benefit provided, in some categories of case such an approach would be to affront rather than satisfy the requirements of good conscience and justice which inspire the concept or principle of restitution or unjust enrichment.
62 In relation to the plea in par 75 of the Minute, there does seem on the face of it to be a logical inconsistency in the calculations in the particulars of that plea and while I accept that that is a matter which could adequately be dealt with by way of defence, it is a matter which should be given further consideration by the plaintiff in any fresh minute of amended statement of claim.
63 There were a number of other objections to the statement of claim with which I will deal briefly.
64 I would not refuse leave to plead in terms of par 9B. It seems to me that the plea raises matters properly left for trial. Similarly, I would not refuse leave to plead in terms of pars 5, 6 and 7 on the ground that they are superfluous. I do not consider that they are a cause of any substantial embarrassment.
65 The implied term in par 18(c) is, in my view, embarrassing. It is not apparent to what "the Construction Program" pleaded in par 18(c) refers. Paragraph 19 refers to "a construction programme" prepared by the plaintiff. Paragraph 38 refers to "The Construction Program". The specific "Construction Program" referred to in par 18(c) must be properly and clearly identified in the pleading. It is also not apparent on what basis it is alleged that the defendants were bound to comply with the Construction Program referred to in par 18(c). In particular, it is not apparent whether it is alleged it was bound to do so by a provision of the contract, by industry custom or otherwise. I understood counsel for the plaintiff to indicate that the plaintiff put its case on the basis of industry custom or practice. Whatever is the case, it needs to be made clear.
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66 In my view, par 16 of the statement of claim is objectionable in that there is no plea of the "direction" of the Fire and Emergency Services Authority which would found the claim there pleaded. I understood that counsel for the plaintiff accepted that it was deficient in that respect.
67 I accept the defendants' complaints about the plea in par 40 of the Minute. In light of the terms of cl 35.5, it is not clear on what basis, or at least in what respect, it is alleged that the defendants were in breach of it. Nor is it clear how the alleged failure to advise the plaintiff timeously of the finishes required by the defendants constituted a breach of the defendants' duty, pleaded in par 17(f), to ensure the superintendent acted fairly and honestly, or the duty of the superintendent, pleaded in par 17(g), to direct the plaintiff as to discrepancies found by the plaintiff.
68 I accept that, as the matter stands, it is unclear how the allegations in pars 33 to 36, and also in pars 44 to 46, of the Minute relate to the plaintiff's claim for relief and they are therefore embarrassing.
69 It was common ground that if I were to find that, in particular, the estoppel and variation pleas were objectionable, a number of other later pleas must fall as a consequence. It is unnecessary for present purposes to list those other pleas.
70 In the circumstances, I consider the appropriate course is simply to refuse to allow the statement of claim to be amended in terms of the Minute.
71 The question then is whether the plaintiff should be given another opportunity to plead its case. It was submitted on behalf of the defendants that in view of the substantial delay that has already occurred in endeavouring to put the statement of claim in a proper form, the time has come to bring the action to an end.
72 I accept that there has been substantial delay but I do not consider it is a case where it is appropriate to deny the plaintiff a further opportunity to plead the statement of claim.
Conclusion
73 I would therefore refuse leave to amend in terms of the Minute with liberty to the plaintiff to bring in a further minute of amended statement of claim. I will hear the parties on the time within which that should be done and on the question of costs.
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