Johnston v Pacific Dunlop Limited
[2004] WADC 131
•25 JUNE 2004
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: JOHNSTON -v- PACIFIC DUNLOP LIMITED [2004] WADC 131
CORAM: DEPUTY REGISTRAR HARMAN
HEARD: 5 & 20 MAY 2004
DELIVERED : 25 JUNE 2004
FILE NO/S: CIV 1464 of 1998
BETWEEN: MICHAEL JOHNSTON
Plaintiff
AND
PACIFIC DUNLOP LIMITED (ACN 004 085 330)
DefendantWOOLWORTHS (WA) PTY LTD (ACN 008 668 148)
Third Party
Catchwords:
Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application for leave to amend pleading - Delay - Prejudice - Consideration of the terms of the endorsement
Legislation:
Trade Practices Act 1974
Result:
Application successful
Representation:
Counsel:
Plaintiff: Mr T H Offer
Defendant: Ms F C E Davis
Third Party : No appearance
Solicitors:
Plaintiff: Vertannes Georgiou
Defendant: Phillips Fox
Third Party : Minter Ellison
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
ABB Service Pty Ltd (formerly known as ABB Engineering Construction Pty Ltd) v Hetherington [2001] WASCA 235
Bill Discount Services Pty Ltd (in liq) v Dill-Macky, unreported; FCt SCt of WA; Library No 6700; 7 May 1987
Dallas Development Corp Pty Ltd v Western Australian Land Authority, unreported; FCt SCt of WA; Library No 980245; 7 May 1996
Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431
Morgan v Banning (1999) 20 WAR 474
Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Turner v Bulletin Newspaper Co Pty Ltd (1974) 131 CLR 69
Waddington v Silver Chain Nursing (1998) 20 WAR 269
DEPUTY REGISTRAR HARMAN: I refer to the reasons of Commissioner Greaves given on 17 December 2003, which are in the following terms:
"The plaintiff commenced these proceedings on 1 May 1998. It is alleged in the statement of claim and is not in dispute that the first defendant supplied a bicycle to the second defendant who sold it to the plaintiff in September 1991. The plaintiff alleges that on 5 May 1995 he sustained personal injuries when he fell from the bicycle after the front stem of the bicycle snapped.
The endorsement of claim on the writ reads:
'The plaintiff's claim is against the First Defendant and the Second Defendant (both Defendants being corporations as defined in the Trade Practices Act (Cth) ('the Act') for personal injuries suffered by the Plaintiff on or about 5 May 1995 as a result of:
1. a bicycle ('the product'), which was manufactured and supplied in trade or commerce by the First Defendant, having a defect as contemplated in Part VA of the Act;
2. the product, which was supplied by the Second Defendant to the Plaintiff (pursuant to a contact) in the course of the Second Defendant's business, not being of merchantable quality in breach of the implied undertakings defined in Section 71 of the Act.'
Part VA of the Trade Practices Act 1974 commenced on 9 July 1992. Counsel for the plaintiff submitted it is open for the court to find that Part VA applies retrospectively to the sale. It is not necessary for me to determine that issue in this appeal. The learned Deputy Registrar granted the defendant's application for summary judgment pursuant to O 16 r 1. In support of this appeal, counsel for the plaintiff opposed the application for summary judgment afresh by providing a draft minute of proposed further amended statement of claim which should be read in conjunction with this judgment. He submitted the endorsement of claim is of wide purport sufficient to allow the proposed amendment to the statement of claim without amendment to the writ; or alternatively, the writ is capable of amendment pursuant to O 21 r 5(5) so that such amendment would arise "… out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed …"
Counsel for the first defendant submitted the claim against the first defendant was limited to Part VA of the Trade Practices Act 1974. She said, although a claim for breach of merchantable quality (s 71 of the Trade Practices Act) was made, this was against the second defendant only.
Counsel for the plaintiff submitted this interpretation of the endorsement is unsound. He submitted that while par 1 of the endorsement makes reference to the manufacture of the bicycle by the first defendant and par 2 refers to the supply by the second defendant to the plaintiff, the endorsement does not limit the action to one of manufacture against one party and supply against the other. The endorsement discloses a chain of events linking the two defendants with the plaintiff. Counsel submitted the endorsement should be read generously. I accept that submission. In my opinion, the minute of proposed amended statement of claim falls within the ambit of the writ.
Counsel for the defendant submitted the proposed amendment should not be taken into account on an application for summary judgment. The issues are before the Court and it seems to me expedient and cost effective to hear the application for leave to amend. Counsel for the defendant then submitted the plaintiff must be taken to have abandoned all but the Part VA claim against the first defendant. I do not accept that submission, but if it is correct, I would allow the plaintiff's application pursuant to O 21 r 5 because it is clear the new cause of action arises out of the same facts or substantially the same facts as the cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.
I am therefore prepared to grant the plaintiff leave to amend in accordance with the minute of proposed further amended statement of claim. Counsel were agreed that there be a trial of the preliminary question of law whether Part VA of the Trade Practices Act 1974 applies to the plaintiff's claim. I am prepared to direct accordingly. I will also grant leave to the defendant to amend its statement of defence within 21 days. The appeal should therefore be allowed, the decision of the learned Deputy Registrar quashed and I will hear counsel on the orders to be made."
Significantly the order made by the Commissioner makes no reference to any application to amend the statement of claim. The parties agree that no such application was then before the Court. Such an application is now before me for determination.
The determination of the Commissioner is the subject of appeal yet to be heard. At the commencement of the hearing the defendant sought an adjournment so as to first allow for the Full Court to make a determination on the disposition of the summary judgment application. There would be some sense in following that proposal. However, the commencement of an appeal does not operate as a stay, only the ground for the exercise of discretion.
A party is free to seek to amend a pleading at any time. Conceivably the result of the appeal will be that any time now devoted to the action will have been wasted. The real concern of the Court is not the prospect of the generation of unnecessary costs but that a public resource is not wasted. At the time that the application was made that resource could not have been reallocated. The only party at risk of costs in the substantive application was the plaintiff. He opposed the adjournment. It was appropriate to consider that the plaintiff was motivated to proceed with the action. I was not persuaded that it was appropriate to grant the adjournment sought.
The defendant raised no issue with the sufficiency of the proposed pleading.
The application is before me some six years after the action was commenced, however the trial is not imminent, indeed trial dates have not been allocated. That the proposal to amend is made at a later stage of the action than may be considered to be desirable of itself could not justify refusing the application.
The defendant submitted that it was for the plaintiff to satisfy the Court that it would not be prejudiced. I accept that the onus rests with the applicant to satisfy the Court that it is appropriate to exercise discretion in his favour. There is no presumption that would operate against a party seeking to amend, to the contrary, parties are encouraged to bring all relevant matters in dispute at one time for final determination. If in order to achieve that result it would be necessary to engage in the process of amendment, it may be recognised that to the extent that it is reasonable to allow for amendment it should be encouraged.
Although in every case of amendment there will be a prospect of prejudicial impact on the respondent, in any particular case that prospect may be no more than illusory. Unless the respondent brings evidence of the prejudicial impact of an applicant's proposal, in any particular case, any analysis along those lines may be no more than moot.
It is not as though a low level of prejudice is likely to be of significant moment in consideration being given to the exercise of discretion to amend. Any adverse consequence is only likely to considered to be sufficiently prejudicial if it has an impact on the ability of the respondent "to get up the case for trial" on the amended pleading.
The fact that it is unlikely that a respondent will consider that it is in its interests to disclose any such difficulty in sufficiently unambiguous detail to enable proper consideration of it does not have any impact on that analysis. In most cases the applicant could not be expected to have any real appreciation of the actual impact of the proposed amendment on the respondent.
In my opinion the respondent carries an evidentiary onus. If it fails to bring evidence it is a matter of considering the impact of submissions of the parties as to the prospect of prejudice without any proper appreciation of whether either that prospect may be realised or its real impact.
In this case the defendant brings no evidence. The plaintiff submits that the defendant has expressed no difficulty with the terms of the proposed pleading. Implicitly the defendant is thereby appropriately informed as to the proposed case. He contends that the new allegations of material fact and particulars are not significantly different to those presently expressed in the existing pleading. That submission overlooks the fact that but for a claim of manufacture and supply with a defect, the pleading relates to another party. Further that presently there is no pleaded case on representations, false and misleading conduct or breach of duty of care.
It is not for the Court to speculate that the defendant would be disadvantaged. In considering the prospect of prejudice there is no reason for the Court to favour the interests of either party. The only conclusion that I can draw from that fact that the defendant has brought no evidence is that if it would be prejudiced it has chosen not to inform the Court of any feature of that unfair disadvantage. It is not unreasonable to consider that if the application was allowed the defendant would suffer no greater prejudice than it may already suffer in the action. I am not persuaded that the prospect that the defendant may be prejudiced ought be sufficient to preclude the plaintiff from amending the pleading.
I make those observations in the knowledge that the supply of the machine to the plaintiff occurred sometime prior to May 1995 and was informed by the defendant that it had been purchased in 1991. It would have been in the hands of the defendant at least in the capacity of supplier prior to that time and as to manufacture, even earlier.
The next issue for consideration is whether the scope of the indorsement of claim is sufficiently wide to embrace the proposed pleading. At that point there was a significant contest between the parties.
The submission of the plaintiff was that however an indorsement is framed, it ought to be read generously. As I see the position there is some support for that proposition at least where in the particular context, the sufficiency of the indorsement is not otherwise in issue.
The defendant relied on an interpretation being put on the indorsement such that there was no claim against it other than under Part VA of the Act. In advancing that interpretation it was able to point to the fact that to date no other case had been pleaded against it. To the extent that a generous reading would be accorded to the indorsement the defendant drew on the proposition that by the maintenance of that single case to this point the plaintiff ought be deemed to have abandoned or otherwise be precluded from bringing any other case under the indorsement.
The indorsement constitutes the plaintiff as the consumer of a product of which the defendant was the manufacturer and a supplier, that it was defective or not of merchantable quality and that on a particular date, as a result the plaintiff was injured and thereby suffered loss. It imports implied undertakings as to merchantable quality and fitness for purpose under the Trade Practices Act 1974.
The first case that the plaintiff seeks leave to present is at par 4 of the Minute. It is in terms that the failure of the front stem of the bicycle manufactured and supplied by the defendant was due to want of merchantable quality of the bicycle. The new particulars assigned to that allegation at par 4.4 to par 4.6 inclusive are no more than they purport to be. At par 4A the plaintiff constitutes himself as a consumer, and contends for relief under s 74D of the Trades Practices Act 1974.
In my opinion that the case is within the scope of the indorsement. The relationship between the parties contended for is at least identified as supplier and consumer, the subject of the transaction by which he is constituted as such is the same. I might add that simply in terms of amendment of the pleading, there is no different causal connection put between the plaintiff’s injury and any responsibility of the defendant.
The second case is expressed at par 4B where the plaintiff raises an alternative statutory claim founded upon particular representations made in the course of supply. The representations contended for were that the bicycle was described as a "mountain bike". It is not apparent how representations were conveyed in the context of supply and description of the machine as a "mountain bike".
The indorsement does not refer to any representation or indeed to anything other than the transaction "supply". The reference in the proposed pleading to description suggests either labelling or that the provision of labels or literature was part of the process of supply. I accept that is only speculation. The parties did not canvass the issue.
The onus in the application is on the plaintiff. Although I am loathe to draw inferences where a party fails to discharge an evidentiary onus it is appropriate to consider that the Court would not manufacture an issue in the absence of it being articulated by the parties. Further, judicial knowledge would allow for the prospect that representations may be made by the mechanisms to which I have referred.
It follows that although I have some degree of discomfort, I recognise that the reference in the indorsement to the process of supply would include not only of the product but also the prospect of a description of the product by the defendant. If the pleaded case is made on that basis then I consider that it would fall within the scope of the indorsement. If not, it could only be put if the indorsement was amended. Although the Commissioner referred to the prospect of an application to amend the indorsement no such application was before me.
The representations articulated at par 4B, are pleaded at par 4D to found a claim of misleading and deceptive conduct. There is no additional pleading at par 4D to advance the analysis that I have undertaken in relation to par 4B. Indeed at that point the reference is simply to the representations. In my opinion there is no scope for me to come to any different conclusion.
The last claim sought to be brought is under breach of common law duty of care. At par 4G the plaintiff pleads breach of duty of care in the design and manufacture of the product. The indorsement of claim does not provide the context for a claim that relates to the design process. To that extent the application must fail. Otherwise, I have no difficulty with the prospect that a duty of care would be found in the context of manufacture and supply of a product. Such a case as is open on the indorsement.
As to whether the plaintiff should be permitted to be put the cases within the scope of the indorsement, it is a matter of whether by reason of his conduct or otherwise the plaintiff should be disentitled from doing so.
As to the first prospect, I am not aware of any particular conduct that could have any such significance. Otherwise I see little justification for ignoring the existence of the broader scope of an indorsement simply because there is presently a more limited pleading. If a plaintiff choses to file an indorsement, it defines the scope of the action. A pleading under an indorsement simply expresses the case or cases available on that indorsement that at any particular time a plaintiff chooses to bring. In a perfect world particulars would never be amended and allegations of material fact and cases pleaded would remain constant. There is no proper basis to impose any constraint on a party along those lines simply because it chose to lodge a writ with an indorsement rather than a pleading and that the pleading once filed is less than that open on the indorsement. Both indorsements and pleadings are amenable to amendment at any stage of the action.
As to the second prospect it is conceivable that if minded to do so one could find reason to exercise discretion against the plaintiff. I appreciate the plaintiff has exposed himself to some considerable risk simply on the basis that the application is late, the case is old and the defendant may be prejudiced. If I were persuaded that any of those considerations or their combined effect was significant I would refuse the application. I am not so persuaded. As I see the application there is no reason why the cases that the plaintiff seeks to bring would not be capable of being put to a fair trial.
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