Kien Dan Luu P/L v Austn Mutual Prov SOC Ltd No. Scgrg-98-407 Judgment No. S442

KIEN DAN LUU PTY LTD & ORS v
AUSTRALIAN MUTUAL PROVIDENT SOCIETY LTD
[1999] SASC 442

Full Court: Doyle CJ, Duggan and Debelle JJ

DOYLE CJ. The plaintiff and the defendant in an action in the District Court have appealed against the judge’s decision.
Australian Mutual Provident Society (“AMP”) sued Kien Dan Luu Pty Ltd (“KDL”) to recover money lent by AMP to KDL. KDL was an agent for AMP, inviting persons to enter into contracts of insurance with AMP and one of its subsidiaries. By way of defence, KDL alleged that its appointment as an agent was terminated in breach of its contract with AMP. It denied that it owed money to AMP, and counterclaimed damages. Mr Luu and Mrs Luu are directors of KDL. Mr Luu was the person who conducted KDL’s business as an insurance agent. They counterclaimed damages for financial loss suffered by them, and for personal injury in the form of illness that they claimed to have suffered as a result of the breach of contract by AMP.
The judge found that KDL was liable to repay to AMP the money lent to it. He found that Mr and Mrs Luu were liable to AMP as guarantors. Those findings are not challenged on appeal.
The judge found that AMP had terminated KDL’s appointment as agent in breach of the contract between AMP and KDL. The judge awarded damages to KDL on its counterclaim. The judge awarded damages to Mr and Mrs Luu for financial loss. He dismissed the claim for damages for personal injury.
KDL has appealed against the award of damages to it, claiming that they are inadequate. So have Mr and Mrs Luu. They also appeal against the dismissal of their claim for damages for personal injury. AMP has cross‑appealed against the finding that it was in breach of contract, and against the assessment of damages. There is also an appeal and cross-appeal against the judge’s decision on costs.
I now turn to the issues on appeal. It will be necessary to set out at some length what happened at the trial. Most of what follows is drawn from findings made by the trial judge that were not challenged on appeal.

The agency agreement and the loan

AMP is a well-known insurance company. In October 1987 AMP appointed KDL as an agent on behalf of AMP and on behalf of a related company. KDL was appointed an agent on the basis that it was an independent contractor. KDL was authorised to procure on behalf of AMP proposals for life insurance, disability insurance and superannuation. KDL was authorised to procure on behalf of a related company proposals for general insurance.
As I have already noted, Mr Luu was the person who did the necessary work for KDL.
There was much dispute at trial about the terms of the contract between AMP and KDL at the time of its termination. KDL denied that certain changes were made to the terms of the appointment after KDL was appointed. There was a lot of evidence about this. The judge rejected Mr Luu’s evidence on the point and found that changes had been made to the agreement, and that those changes had been communicated to KDL. He found that the relationship between AMP was governed by what he called the 1991 agreement. That finding is not challenged on appeal.
On 6 June 1989 AMP agreed to lend $19,144.52 to KDL, pursuant to a scheme under which AMP made loans to agents to assist them to develop their businesses. Mr and Mrs Luu guaranteed repayment. The judge’s finding that the loan became repayable upon termination of the agency is not now challenged.
The loan became repayable because AMP terminated KDL’s appointment in September 1994. It was common ground before the judge that the appointment was terminated then. But KDL claimed that the appointment was terminated in breach of its contract with AMP. The judge found in KDL’s favour on that point. However, he found that AMP was in breach of a contractual term that KDL had denied was part of its contract.

The termination of the agency agreement

The 1991 agreement is a lengthy document. The clause governing the termination of the agreement is poorly expressed. It provides as follows:
“1. Termination
1.1... This appointment as a Corporate Agent may be terminated by the Company or by the Society at any time, without prior notice and without assigning any cause and will automatically be terminated on the first of:
(a). death of the Specified Employee;
(b). permanent and total disablement of the Specified Employee;
(c). retirement of the Specified Employee;
(d). if in the opinion of the Manager the company or any of its employees, statutory officers or sub-agents have committed misconduct;
(e). infringement of any of the provisions of this agreement by the Company or any of its employees, statutory officers or sub-agents;
(f).. if in the Managers discretion the Company or the Specified Employee:
i)... have not achieved or maintained the performance standards required from time to time by the Society, or
ii).. become bankrupt or insolvent, or
iii). are convicted of a criminal offence.”
By letter dated 28 September 1994 AMP wrote to KDL informing it that its appointment was terminated “effective immediately” under clause 1.1(f)i).
The judge found, contrary to KDL’s case at trial, that AMP had established performance standards and that KDL had not achieved or maintained the required performance standards. That finding is not challenged on appeal. There was, therefore, a basis upon which AMP could terminate the appointment of KDL pursuant to the 1991 agreement.
KDL advanced a fallback submission that succeeded before the judge. It was that in terminating KDL’s appointment, AMP did not adhere to a contractually agreed procedure, and so the termination of the appointment was a breach of contract.
As I understand the judge’s findings, the performance standard that KDL failed to meet, or at least an important part of it, is to be found in a document headed “Message To Agents” (“the MTA”) dated 4 March 1994. The MTA was designated by AMP as MTA 94/36. This document stated that the standard that it established took effect from 1 January 1994. The finding that the MTA had contractual effect is not now challenged by KDL. This point was strongly contested by KDL at trial. The judge found that KDL and Mr Luu had not received the MTA on 17 March 1994 (when an important meeting between KDL and AMP took place) but that they did receive the MTA “at some time before September 1994”.

Did AMP breach its contract with KDL?

The MTA contains detailed provisions indicating how the performance standard worked. It was based upon commission payments earned by agents. According to a formula, commissions earned were converted to points, and an agent had to achieve a certain number of points. One section of the MTA states as follows:
“Procedure
Should an Agent fail to achieve or maintain the above standard, the Agent will be counselled. Counselling will be provided by the Agency Manager (or the Sales Manager for Associate Agents of a General Agent) and/or the AMP General Adviser. If the Agent is working in a Structure (General Agency, Managing Agency or Contract for Services), the Principal will be notified and the involvement of the Principal in the counselling will be discussed. At the end of the initial counselling session the Agent will be provided with a written report. It will state the objectives for the Agent, the period within which the objectives are to be met and the action to be taken to achieve the objectives.
If the objectives are not achieved by the given date, further counselling may be required, but if, after a maximum period of 6 months from the initial counselling, the standard has not been achieved, the Agency Agreement (with AMP & AMP General) will be terminated.”

The judge found that AMP was in breach of the contract because it did not follow this procedure.

On appeal, Mr Wells QC for AMP submitted that this part of the MTA was not a contractual provision. He argued that the MTA specifies a performance standard, but that the provision relating to counselling is not a performance standard and so has no contractual effect.
I am unsure whether this submission was put to the judge. He does not appear to have dealt with it in his judgment. In reply on the appeal, Mr Kourakis QC for the defendants pointed out that AMP’s notice of cross-appeal does not include this ground.
I would not refuse AMP leave to amend its Notice of Cross-Appeal to include this ground. The point raised is one of law, and even if it is now raised for the first time it is not a point that would have affected the course of the trial. But I consider that the submission should be rejected on its merits.
Taking the MTA as a whole, I consider that the provision for counselling is to be treated as part of the performance standard. Despite the looseness of the language used, the relevant part of the MTA provides, in effect, that if an agent is not reaching the required standard the agent will be entitled to counselling before the failure to meet the performance standard is relied upon as a ground to terminate the agent’s appointment. While the provision for counselling is not part of the performance standard, in the sense of something that the agent must achieve to maintain good standing, it is part and parcel of the application of the performance standard to an agent. In my opinion this ground of appeal fails.
The judge examined in great detail what happened between March 1994, when Mr Leverington was appointed Manager of the AMP Branch from which Mr Luu worked, and the termination of the agency in September 1994.
The judge found that AMP did not provide the counselling that the MTA called for.
In considering the attack upon that finding, the first issue to be addressed is the extent of the obligation imposed on AMP by the MTA. The judge proceeded on the basis that in the MTA “counsel” is used as a verb meaning to advise or to recommend. I agree. The more difficult question is how far AMP had to go to comply with the MTA.
The MTA measures performance by reference to commissions earned by the agent. The calculations involved are quite complex, and were the subject of a good deal of evidence before the judge. But, in the end, the process of measuring performance is essentially a matter of calculation. It does not involve a qualitative assessment of the agent’s work or of the effort that the agent is making. It is a matter of measuring results.
The agents are independent contractors. No doubt each agent will have a particular style and clientele. Bearing in mind the context in which it operates, I would not read the MTA as imposing an obligation on AMP to instruct an agent in what might be called the basics, or to advise the agent in detail how the agent should run the agent’s own business. I add that one would not expect AMP to have a detailed knowledge of the agent’s clientele. On the other hand, counselling surely involves more than informing an agent that the agent is not meeting the performance standard, and fixing a deadline for the agent to do so. While that could be called advice in the sense of information, I consider that something more than that is envisaged by the MTA. I refer in particular to the statement that the written report to be provided will state “the action to be taken to achieve the objectives”. I agree with the judge that the MTA envisages some advice being given to the agent about how the agent can achieve the required performance level.
In my respectful opinion the judge interpreted the MTA as imposing an obligation on AMP that seems unrealistic in its context. He found, relying upon some general answers to general questions given by Mr Bieg, an officer of AMP who had not been involved in terminating appointments, that the obligation to counsel extended to quite detailed advice on work methods, business organisation and the like. I consider that in the context of the business of a life insurance agent it is going too far to read the MTA as imposing an obligation to give that sort of advice.
I am unable to say, in the abstract, how far AMP had to go by way of counselling. I consider that the obligation can only be meaningfully understood in the context of a particular case. But in my opinion the present case is to be disposed of on the basis of certain findings that the judge made. These lead me to conclude that AMP was in breach of its obligation, even though I treat the obligation as being limited to the giving of advice to the agent about how the standards in the MTA operated, how far short of those standards the agent was, what level of business would meet the standard, and fairly general advice about how the agent might achieve that level.
Although the MTA is dated 4 March 1994, the judge found that it had not been provided to KDL or to Mr Luu by 17 March. The judge found, not surprisingly, that in March 1994 Mr Luu did not understand what was required of him under the new performance standards. The judge rejected a submission that Mr Luu was not willing to receive counselling. An important finding is to the following effect:
“I am of the opinion that Mr Luu did nothing to show or indicate that he was not willing to be counselled. My further opinion is that there were enormous uncleared and not understood or misunderstood cultural differences between Mr Luu and Mr Leverington, and that there were extraordinary language problems between them. All of this and more, in my opinion, led each of them, to form and to maintain a particular view of the other. I am also of the view that there was a complete lack of understanding on the part of Mr Luu as to the changes which were brought about by MTA 94/36 and 94/37 and of what was required of him as a result of those changes on the one hand, and on the other hand that there was a complete lack of interest on the part of Mr Leverington to see that Mr Luu understood anything other than what Mr Leverington wanted him to understand, i.e. performance as required or lose the agency.”

The judge also found that Mr Leverington did not make a real effort to advise Mr Luu about the matters identified by me. The judge found:

“that all Mr Leverington was intent on doing was to set targets to be achieved, fix the time within which those targets were to be achieved and threaten termination of the agency in the event of non-compliance. ... There is no evidence before me to show that the defendant was in fact counselled or advised, or that a plan was suggested or recommended to him as to what action if any should be taken in the sense of what he should do in order to achieve the stated objective.”

The judge also found that Mr Leverington made no effort to explain the changes in the production standard to Mr Luu.

These are strong findings. They are made after hearing Mr Leverington cross-examined at great length, and after hearing Mr Luu give evidence at great length. It is relevant to mention that the judge found that in some respects Mr Leverington was not a good witness. He found him to be rather defensive and protective of his position. I should also record that the judge found Mr Luu to be an even less satisfactory witness. On various matters he rejected his evidence completely.
In effect, the judge has found that Mr Leverington’s approach to counselling was perfunctory. He did little more than tell Mr Luu that he was not meeting the performance standard, and set a deadline for him to do so. He did not make a real attempt to explain the changes in the performance standard to Mr Luu. Although I do not agree that the MTA required of AMP the sort of advice and assistance that the judge contemplated, the judge’s findings of fact lead to the conclusion that AMP did not discharge the much more limited obligation that I would treat the MTA as imposing. Some of the evidence is readily capable of supporting a suggestion that Mr Luu was unwilling to be counselled, but in the light of the judge’s findings I cannot, on appeal, proceed on the basis that Mr Luu rejected attempts to provide counselling.
For those reasons I would not disturb the finding made by the judge that AMP was in breach of its contract with KDL, assuming that finding to be open to the judge.

Was it open to the judge to find that AMP was in breach?

This was a very difficult trial. It ran for some 30 days, spread over about six months. The transcript is about 2,250 pages. There were many documentary exhibits. There were some complicated factual issues relating to the performance standard, and relating to damages. KDL and Mr and Mrs Luu were unrepresented until after the defence case began and after Mr Luu began giving evidence. The judge says:
“The male defendant was in desperate need of the services of an interpreter and whilst one was made available at all times, the male defendant demonstrated an ongoing reluctance to use the interpreter and an obstinate persistence in wanting to express himself in English when his ability to communicate in that language was substantially imperfect, and on many occasions, what he said was incomprehensible because of his accent.”

As I mentioned, the defendants obtained legal representation after Mr Luu began giving evidence. Later there was a change in their representation. They had different solicitors and counsel for the last witness or two and for the addresses.

AMP’s Statement of Claim is brief. It alleges the agency, the loan, the termination of the agency, that the loan is repayable and has not been repaid.
The defence and counterclaim were filed by solicitors. There is a denial that KDL’s appointment has been terminated, and a denial of the obligation to repay the loan. There is a claim that AMP has received any moneys owed to AMP from security that it held. There is an assertion that AMP was in breach of its contract with KDL. However, I stress, the particulars assert that the breach lay in the fact that AMP had not given the defendants details of KDL’s failure to achieve or maintain performance standards, and in the fact that KDL had maintained performance standards. There is also a claim that if KDL did not meet the performance standard, its failure to do so was “induced by the conduct of AMP”. The particulars of that allegation suggest a claim that Mr Leverington treated Mr Luu badly, causing him to fall ill and so to be unable to work effectively. There is a claim for damages including financial loss and personal injury.
Notably, there is no allegation that AMP was in breach of the counselling obligation imposed by the MTA.
During the whole of the case for AMP, KDL was unrepresented. Mr Luu acted as the representative of the defendants.
AMP called two witnesses in its case. The first was Ms Patrick, the Administration Manager at the relevant Branch Office. Her evidence touched on the issue of counselling once or twice, but only very briefly. The other witness was Mr Leverington. He was the Manager of the Branch at the relevant time. He was appointed to that position at the beginning of March 1994. He reviewed KDL’s file, concluded that it was not meeting the performance standards, had a number of discussions with Mr Luu, had correspondence with KDL, and terminated the agent’s appointment. He was asked some questions that touched on the issue of counselling. It is important to understand that the issue of counselling was linked to the issue of whether KDL was informed of the required performance standard, and had brought to its attention the fact that it was not meeting that standard. The conversations and correspondence that were said to constitute the counselling were also occasions on which Mr Leverington said that he drew relevant factual matters to KDL’s attention. However, on my reading of Mr Leverington’s evidence-in-chief counselling was touched on in only a peripheral manner, and was not the focus of questioning. Mr Leverington was cross-examined at considerable length about his dealings with Mr Luu. The judge relied upon answers given by Mr Leverington in examination-in-chief, to conclude that what passed between Mr Leverington and Mr Luu did not amount to counselling. This evidence was given early in the trial when there was no reason for Mr Leverington to be thinking of counselling as an important issue. To the extent that the judge’s findings are based on documents that emanated from Mr Leverington, there is the difficulty that Mr Leverington was not given the opportunity to comment on the suggestion that the events recorded in these documents did not constitute counselling for the purpose of the MTA. Having looked at the relevant parts of the evidence of Mr Leverington, I must say that I have the impression that it was not identified to him that the issue of counselling was an important issue.

The first witness was called on 19 August 1997. On 26 August 1997, the sixth day, Mr Luu opened the case for the defendants and began his evidence. On 27 August the trial was adjourned to enable the defendant to obtain legal representation.
The trial resumed on 4 November. The defendants were now represented by counsel. In the course of a further opening, the defendants’ counsel applied to amend the defence to allege a further particular of wrongful termination of the contract by AMP. The application was, in effect, to allege that AMP had failed to implement counselling procedures required of it before it terminated KDL’s appointment. The point was made, in support of the application, that the amendment was based upon matters that emerged from AMP’s documents.
The application was opposed by counsel for AMP. The point was made that questions had not been put to Ms Patrick or to Mr Leverington on this matter, and that the pleadings had not raised counselling as an issue. The judge said that Mr Leverington had given evidence about counselling. Counsel replied, in effect, that this had emerged in the course of dealing with other matters and that Mr Leverington had not had the opportunity to comment on the suggestion that what he did was not counselling.
The judge indicated that he was disposed to allow the amendment, but that he would do so on the basis that AMP would be permitted to reopen its case, to recall Mr Leverington and to call other witnesses if necessary. After considering the matter over the lunch adjournment, counsel for the defendants then informed the judge that the defendants abandoned the application. The trial proceeded.
Mr Luu gave evidence-in-chief over the course of six days. His cross-examination extended over nine days. Obviously enough, the dealings between Mr Luu and Mr Leverington were scrutinised in some detail, but this was in the context of the issue of counselling having been recently abandoned. On 4 December 1998, counsel for AMP applied for leave to call evidence in rebuttal, once Mr Luu’s evidence was complete. Leave was sought to call evidence in relation to two specific issues. These were described as the issues of persistency and validation. They are terms relevant to the application of the performance standard. Two other issues were identified. They are the issue of the 1991 contract and the question of whether there had been any complaints about KDL’s performance from the former Office Manager, Mr Lipkiewicz. The application was opposed but granted. The cross-examination and re-examination of Mr Luu then continued on 4 December and 5 December.
On 8 December 1998 the case was adjourned again. The solicitors and counsel then acting for the defendants withdrew. The trial resumed on 28 January 1999, with different counsel appearing for the defendants. Mrs Luu was examined and cross-examined that day.
The rebuttal evidence began that day. Counsel for AMP called Mr Bieg to give evidence about validation and persistence. He was cross-examined on 28 January and 29 January. No questions were put to him in evidence-in-chief about counselling. As I understand his evidence, he had not had any direct contact with Mr Luu.
In cross-examination Mr Bieg said that he had never been involved in terminating an agent’s appointment. He said that he had looked at Mr Luu’s file, but only in relation to validation and persistency. He was asked some rather general questions about what counselling for the purpose of the MTA would involve. He gave some rather general answers, upon which the judge relied in deciding that AMP had not met its obligations. He said that he had not considered whether the proper procedure had been followed in Mr Luu’s case. He was asked no questions based upon what Mr Leverington had done by way of counselling. The rest of his cross-examination related to other matters. The cross-examination about counselling was quite brief.
The other witness in rebuttal was Mr Lipkiewicz. He was the Manager who preceded Mr Leverington. He gave evidence on 29 January. His evidence-in-chief dealt mainly with the communication by him of information about AMP’s requirements to the agents based at his office. It dealt in particular with the communication of information about validation standards. He gave evidence of his discussions with Mr Luu about these matters. He gave no evidence-in-chief about counselling. In cross-examination he said that late in 1993 he had pointed out to Mr Luu that KDL’s performance was not up to expectations. He was asked in cross-examination if he had begun counselling procedures with KDL. His answer was that Mr Luu was an experienced agent and at that level of experience an agent should know what to do in terms of achieving results. There was no evidence from Mr Lipkiewicz about what counselling would usually involve.
The judge heard addresses on 3, 4, 5 and 8 February 1999.
Written submissions filed by the defendants raised the alleged breach of contract in failing to provide counselling as required by the MTA.
In the oral submissions for the defendants, the starting point was that an earlier contract, the 1987 contract, was the applicable contract, and that the MTA was never part of the contract between KDL and AMP. In the alternative, the submission was developed that AMP did not provide counselling as required. This submission was put at some length. In the course of the submissions, at one point counsel for AMP successfully objected that certain submissions being put went beyond the pleadings. These were submissions that were unrelated to the question of counselling. Counsel for AMP made no such complaint in relation to the counselling issue.
In the course of oral submissions by counsel for AMP, the judge made it clear that he was concerned about whether counselling had been provided. Counsel for AMP did not protest that this was not an issue in the case. He acknowledged in his submissions that the defendants were relying heavily on this issue.
The judge also made it clear that in his mind the issue of counselling was a vital issue.
In due course the judge published his reasons, finding against AMP on the issue of counselling.
The result is that the judge found for KDL against AMP on a breach of contract that was not pleaded by KDL. An application by KDL, early in the defence case, to amend its pleadings to raise the issue had been abandoned. Prior to the making of that application, the issue had been briefly touched upon in oral evidence. A number of documents relevant to the issue had been tendered. After the application was abandoned, the issue received little attention in evidence, although it remained bound up with other issues in the trial. It was only in the final addresses that the issue emerged. Now, on appeal, AMP complains that it was not open to the judge to make the finding that he made. Should that complaint be upheld?
The purpose of pleadings in civil proceedings is to identify and to define the issues that will arise for determination at trial. The issues must be defined in interests of efficiency and of fairness. For both reasons parties are held to their pleadings. However, pleadings are not an end in themselves. They are there to serve the interests of justice. If the parties choose to depart from the pleadings, the judge may permit them to do so. The position is summarised by Mason CJ and Gaudron J in ` Commerciale S.A., en liquidation v Akhil Holdings Limited (1991) 169 CLR 279. They said (at 286-287):
“The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq), per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, e.g., Browne v. Dunn, Mount Oxide Mines.” [Footnotes omitted.]

Other members of the Court made similar statements: Brennan J at 288, Dawson J at 293, Toohey J at 302-303.

When the defendants closed their case, the issue of a breach of contract by AMP through a failure to counsel KDL (by counselling Mr Luu) was not an issue in the case. The course of the trial makes that clear. Counsel for the defendants, who had come into the case in the last few days, then raised the issue. That must have been due to a misunderstanding by him. Nothing was put to us on appeal to suggest otherwise. There is no suggestion that counsel had agreed between themselves to alter the basis of the trial. The judge did not raise the departure from the pleadings, nor did counsel for AMP.
Under the circumstances, I can only conclude that the judge and both counsel had forgotten about the state of the pleadings and the abandoned amendment application. It is understandable (although surprising) that this might happen, bearing in mind the nature and circumstances of the trial.
The failure by counsel for AMP to object to the raising of the counselling issue is capable of supporting a conclusion that AMP deliberately chose to allow the judge to decide this issue, despite what had gone before. But under the circumstances I consider that the more likely explanation is confusion and an oversight by all concerned.
Acquiescence by one party to a case in a course adopted by the other may be sufficient to justify an inference that the former party has agreed to the determination of an issue not raised by the pleadings. But, in my opinion, such an inference should only be drawn when it is clear that that is what was intended. In the present case I am not satisfied that counsel for the AMP was conscious of the departure from the pleadings and from the course of the trial, and was intending to acquiesce in the departure. Nor is there any indication that the judge was aware of these things. As I have said, I think it likely that counsel for the defendants was himself unaware of what he was doing.
I consider that the matter is to be approached on appeal on the basis that, by an oversight on all sides, the judge has heard submissions on and has decided a point that had earlier been excluded as an issue in the trial. The judge heard full submissions on the point and it was apparent to all parties that he was giving serious consideration to the point. The issue is whether, as a matter of justice, AMP should now be permitted to revert to the position as it would have been before the addresses began, had counsel for AMP then raised an objection to the issue of counselling being considered in the manner suggested by counsel for the defendants.
There is no need to cite authority for the proposition that generally a party is bound by the course that the party adopts at the trial of an action. It is at the trial that the issues between the parties are determined and settled. Usually the pleadings will determine those issues. However, as is well known, on occasions the parties depart from the pleadings and if they do so, they may be bound by the decision to do so. The effect of a decision to depart from the pleadings is referred to by Mason CJ and Gaudron J in the passage from Banque Commerciale that I have set out above. Immediately following that passage they said (at 287):
“Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference.”

However, the application of these principles does not dispose of the present case. I am not satisfied that AMP has deliberately chosen to depart from the pleadings. My conclusion is that counsel and the judge overlooked the departure from the pleadings. It is true that in a sense counsel for AMP acquiesced in the course adopted by counsel for the defendants, but that acquiescence was the result of a misconception.

However, the fact remains that AMP has acquiesced in a departure from the pleadings. And sometimes a party will be bound by the manner in which a case is conducted, even when that is the result of inadvertence. In University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481 at 483 the High Court said:
“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had and (sic) opportunity to do so.”
The facts of that case were quite different from the facts of the present case but the statement of principle is significant. However, I must make it clear that I do not regard this statement of principle as dictating the outcome in the present case. I refer to what the High Court said because it illustrates the strength of the principle that a party should be bound by the course adopted at trial. The reasons of justice and convenience for taking this approach are well known.
I therefore take the view that even though it is not a case in which AMP has deliberately departed from the pleadings, and deliberately chosen to contest an issue that had earlier been excluded from the trial, there are still sound reasons of policy and of justice for holding it to the course that it adopted at the trial. However, in the unusual circumstances of the present case there might be grounds for permitting AMP to insist upon the case being decided in accordance with the pleadings, if AMP were able to demonstrate a real likelihood of unfair prejudice to it were the judge’s decision to be permitted to stand.
In considering that issue I am struck by the fact that, in the course of submissions before the trial judge, counsel for AMP did not suggest that the issue of counselling had not been fairly or adequately explored with his witnesses by himself or by counsel for the defendants. It is one thing to overlook the fact that an issue has not been properly pleaded. It is another thing to overlook the fact that the evidence being debated with the judge is not the available evidence on point. However, there is another matter which is, to my mind, of greater significance. The trial judge took a wide view of the obligation imposed upon AMP in relation to counselling. I agree that the practicality of that approach was not explored with the witnesses for AMP. But I have upheld the judge’s finding of a breach of contract, on the evidence before him, on a much narrower basis. I have upheld the finding on the basis that Mr Leverington’s approach was found by the judge to be perfunctory, and on the basis that the judge found that Mr Leverington did not make a real attempt to explain the changes in the performance standard. It appears to me that that issue was thoroughly canvassed at trial, and it was canvassed at trial because it was very closely linked to issues that were pleaded. If the judge’s view as to the obligation to counsel were to stand, there would be a risk of unfair prejudice to AMP as a result of that issue not having been fairly explored with its witnesses. But I take the view that the narrower issue that I have identified was fairly explored with those witnesses and I am not satisfied that AMP has demonstrated that it will be unfairly prejudiced if it is found liable on that basis.
That being so, I have concluded that the case is one in which AMP should be held to the course that it adopted at trial, even though that was a course which it adopted only at the stage of closing addresses.
This is one of those cases in which, however the issue now under consideration is decided, the outcome seems unsatisfactory. Deciding the point in the defendants’ favour means that the issue of breach of contract by AMP is decided without AMP having the opportunity to lead all of the evidence available to it. Deciding the issue in favour of AMP means that it will seem to the defendants that AMP has been relieved from the consequences of the acquiescence by its counsel in the course taken by counsel for the defendants.
For those reasons I conclude that it was open to the judge to find that AMP was in breach of its contract.

Damages payable to KDL

I now turn to the appeal and cross-appeal against the judge’s assessment of damages.
The termination of KDL’s appointment as an agent for AMP meant that KDL lost the ability to earn commissions by selling (or securing proposals to AMP for) policies of insurance. KDL is entitled to damages for that loss. It fell to the judge to assess those damages.
I mention that, in doing so, the judge made no allowance for the fact that KDL was at liberty to obtain alternative employment and thus to reduce its loss. A possible explanation for this is the evidence led by Mr Luu and Mrs Luu supporting their claim for damages for a stress related illness that each of them claim to have suffered as a result of the termination of KDL’s employment. The judge dismissed that claim. He dismissed it on the grounds that it was not maintainable as a matter of law. He did not make findings of fact in relation to it. I think that the judge must have proceeded on the basis that KDL had not failed to mitigate its loss, bearing in mind the state of health of Mr Luu and Mrs Luu. I think that the judge must have accepted that, under the circumstances, KDL had not failed to make reasonable efforts to obtain alternative work. I propose to proceed on the same basis.
I should also record that the judge said that the evidence before him in relation to damages was unsatisfactory. The judge had to do the best he could with the unsatisfactory material before him.
KDL also claimed damages for the value of certain registers of which AMP in due course took possession. It was common ground that AMP had done this, after KDL had failed to dispose of them itself. The judge did not make any express finding about the nature of the registers. I gather that a register is a list of policies or policy holders serviced by a particular AMP agent. The list is called a register. Commission entitlements are calculated by reference to the register. KDL had three registers. In simple terms they were a register relating to life policies, a register relating to superannuation policies, and a fire and general register. There was no dispute at trial that the registers had a value, and were regarded by AMP and its agents as saleable assets. The value of a register is attributable to the fact that the person regarded as the holder of the register is credited with commission earned on the policies recorded in the register. My understanding is that if a register is sold by one agent to another, the buyer of the register acquires the right to service the clients whose policies are recorded in the register.
After KDL’s agency was terminated there was some correspondence and discussion about the registers. AMP allowed KDL a period of time in which to sell the registers, but KDL was unable to sell them, at least at a price satisfactory to it. There was a dispute about the reasons for this. AMP did not accept that it was obliged to make a payment to KDL for the registers, nor did it accept that it was under an obligation to sell the registers on behalf of KDL.

The judge appears to have assessed the damages on the basis that AMP chose to take and retain the registers, and accordingly must pay market value for them. An alternative basis for the assessment would have been that AMP’s breach of its contract with KDL put KDL in the position of having to try to sell the registers, and that KDL’s failure to realise their value was caused by the fact and circumstances of the wrongful termination of the appointment. Be that as it may, the judge set about the process of determining the market value of the registers. KDL appeals on the grounds that the judge’s assessment was inadequate. AMP cross-appeals on the grounds that the assessment was excessive.
Before dealing with that issue, I will deal with the judge’s assessment of damages for loss of the ability to earn commission. Once again, KDL has appealed on the grounds that the assessment was inadequate, and AMP has appealed on the grounds that the assessment was excessive.
The judge found that the average commission paid to KDL over the four or five years preceding the termination of the appointment was $38,200 per annum. That figure was not disputed by AMP at the time, and now appears to be common ground. The judge found that had AMP realised that it was not entitled to terminate the appointment when it did and in the manner in which it did, because it had not followed the counselling procedures, it nevertheless would have taken steps to exercise its right under clause 1.1 of the 1991 agreement to terminate KDL’s appointment without giving any cause. He found that AMP would have done so within about four months of September 1994. The judge calculated the damages on that basis. The judge further discounted the amount to be awarded on the basis that in the two financial years preceding the termination, KDL’s commissions were falling steadily. He thus assessed damages for loss of income at $9,000 on the basis of one-third of a yearly figure of $27,000.
In so proceeding the judge acted on the premise that, for the purposes of assessing damages, AMP must be assumed to have performed its contract with KDL in the manner most beneficial to AMP: see The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92-93 Mason CJ and Dawson J. There is no doubt that one of the principles by reference to which courts assess damages is that when the innocent party claims damages for the loss of an opportunity that depends upon the act or choice of the party in breach, it will be presumed that the party in breach would exercise that party’s contractual powers or rights in the manner most beneficial to that party.
However, KDL submits that the judge erred. It submits that if AMP had counselled KDL properly, KDL’s performance would or might have improved. AMP might have decided to keep KDL as an agent. The point is made that AMP did not in fact exercise its power to terminate without cause, and there is no reason to think that it would have pursued this course of action. As well, KDL submits that AMP was not entitled to exercise the power to terminate the contract without cause, if the basis for that decision was a failure to observe performance standards. It is submitted that in those circumstances AMP had no choice but to counsel KDL. For all those reasons it is submitted that KDL’s appointment might have continued indefinitely. In the alternative, it is submitted that the judge failed to allow for the favourable contingencies. As to the yearly income, it is also submitted that the decline in KDL’s earnings was attributable to AMP’s failure to provide counselling, and that again in this respect the judge has adopted too low a figure.
I consider that the judge’s approach was broadly correct.
When damages are assessed for wrongful termination of a contract of employment, the breach being the failure to give proper notice, damages are invariably assessed by reference to the period of notice to which the employee was entitled. As far as I am aware, in such cases it has not been suggested that the court should embark upon a factual enquiry as to the possibility of the employer not having dismissed the employee had the employer understood the relevant facts differently. The court simply assesses damages by reference to the period of notice to which the employee was entitled. Although this was not the approach taken by the judge, I consider that that was an approach open to him. In any event, I consider that the judge was entitled to proceed on the basis that AMP would exercise its contractual rights in the manner most favourable to it. The judge made a finding of fact that AMP would have exercised the right to terminate the appointment without cause, and would have done so within a period of four months. I consider it clear that the judge proceeded on the basis that the relationship between AMP and KDL had broken down, and that AMP would have proceeded to terminate the appointment for that reason. I consider that it was open to AMP to do this, and that it would have done it, because of the breakdown in relationship between Mr Leverington and Mr Luu, and that AMP was entitled to proceed on that basis even if KDL was not meeting the performance standards. It is relevant to bear in mind that KDL and Mr Luu made various allegations of mistreatment by Mr Leverington, which allegations were wholly rejected by the judge. There was a breakdown of the relationship independently of the failure to meet performance standards.
I therefore consider that the judge’s factual finding was soundly made, and that as a matter of law it provided a proper basis to assess the damages for loss of income attributable to the termination of the agency. Bearing in mind the steady decline in the earnings of KDL before Mr Leverington first had contact with Mr Luu, I consider that it was open to the judge to make the finding about the level of earnings that he did make.
For those reasons I would dismiss KDL’s appeal against the inadequacy of the damages. Nor do I consider that it can be said that the amount awarded was excessive. I would also dismiss the cross-appeal.
I now turn to the registers. The judge valued the registers by resorting to documents produced by AMP. These documents showed how, in certain circumstances, AMP would value the registers or suggest that they should be valued. These included situations in which AMP was buying a register from an agent pursuant to provisions of the agency agreement. On appeal, AMP submits that this material did not provide evidence of market value, which is what the judge had to determine. AMP submits that this material simply established the contractual basis upon which AMP was willing to deal with an agent’s registers. AMP also submits that the material upon which the judge relied was based upon assumptions that could not be applied to KDL’s registers, bearing in mind the declining state of KDL’s business. AMP points to the fact that, as the judge himself found, there was no evidence of offers made to buy the registers. As well, the judge found that reasonable attempts to sell the register were not made by KDL. On the other hand, the judge was not satisfied that there were no willing buyers for the registers. He did not consider them to be worthless.
The judge described the evidence before him, relating to the value of the registers, as “vague, imprecise and unsatisfactory.” I consider that it was open to the judge to use the material emanating from AMP as providing some evidence of the value of the registers. Bearing in mind the fact that a register could be sold only to someone who was an AMP agent or who was likely to become one, I would have thought that the value that AMP placed upon a register for the purposes of a contractual acquisition could be used to provide a guide to the value of the register. The potential buyers of a register, as well as the seller, would be people who would be able to calculate the value that AMP would place upon the register, and one would expect that value to have an influence upon the price that a purchaser would pay. It cannot be said that the material upon which the judge relied provided no evidence of value. I consider also that the judge was entitled to find, as he appears to have done, that the circumstances surrounding the termination of the agency were such that the failure by KDL to find a buyer did not have the significance that it otherwise might have had. In arriving at the value of the registers, the judge applied a significant discount to the value arrived at by applying the relevant AMP formula. That may seem somewhat unscientific, but the fact that the judge did so is a partial answer to some of the complaints that AMP advances. From the point of view of KDL, in my opinion there can be no complaint that the judge erred, bearing in mind that KDL failed to provide the judge with more reliable evidence of the value of its registers.
For those reasons I would dismiss the appeal and the cross-appeal against the assessment of damages based upon the value of the registers.

Damages payable to Mr Luu and Mrs Luu

The judge awarded to Mr and Mrs Luu the sum of $750 inclusive of interest for the loss of the benefit of a loan at concessional rates for the purpose of buying a house. The only complaint about this is that the period in respect of which the judge assessed damages for loss of a reduced interest rate was too short. For the reasons that I have already given, the judge was entitled to proceed on the basis that in any event the agency would have been terminated, and the concessional loan lost, after four months.
As to the claim for damages for illness caused to Mr and Mrs Luu, the judge found that that claim was not maintainable as a matter of law. There was no contract between Mr and Mrs Luu and AMP for breach of which those damages could be awarded, even if damages were recoverable as a matter of law. Even if there was a contract, the contract was not one of a type giving rise to a claim for damages for personal injury and distress attributable to the breach: see Baltic Shipping Company v Dillon (1993) 176 CLR 344. Nor, on established principles, is this a case in which AMP owed to Mr and Mrs Luu a duty of care to avoid exercising a contractual power, or breaching the contract, in such a manner that illness might be cause to Mr Luu or Mrs Luu. The judge was right to dismiss the claim for damages under this head.

Appeal in relation to costs

The judge delivered separate reasons dealing with the issue of costs.
Although AMP succeeded in proving its claim, the judge found that AMP had failed in a number of respects, and in particular on the claim that it was entitled to retain the registers without paying compensation. The judge said that in relation to the claim, considered separately, he would have given AMP one-half of its costs.
As to the counterclaim, the judge had to take into account various delays caused by the defendants, and the fact that the protracted nature of the case was, to a considerable extent, due to the manner in which the counterclaim was conducted.
He ordered that costs of one adjournment be costs in the cause. He ordered that the costs of two other adjournments be paid by the defendants. He ordered Mr and Mrs Luu to pay to AMP the costs of the claim for personal injury. He ordered, as I understand his reasons, that the amount awarded to AMP on the claim, one-half of its actual costs, be paid to AMP subject to it being reduced by $750 on account of the damages awarded to Mr and Mrs Luu. He then ordered that AMP pay to KDL 50% of the balance of the costs of the proceedings after taking into account the orders for costs already made.
The end result is a rather complex one. In saying this I am not being critical of the judge, because the proceedings themselves gave rise to complex issues in relation to costs. However, it is desirable to avoid such complex orders if possible. In very broad terms, it seems to me that AMP was awarded one-half of the costs of the claim and KDL was awarded one-half of the costs of the counterclaim. I mention that I am not at all sure that the order, as drawn up, properly reflects the order that the judge made in relation to the costs of the claim.
It is well established that, in relation to costs, the court exercises a very broad discretion. If I have rightly summarised the broad effect of the order for costs, I consider that it was an order that was within the scope of the judge’s discretion. I would not disturb the order as to costs.

Conclusions

For the reasons that I have given, I consider that the following orders should be made. First, that the appeal by KDL, Mr Luu and Mrs Luu be dismissed. Secondly, that the cross-appeal by AMP be dismissed.

DUGGAN J. The facts of this matter are set out in the judgment of the Chief Justice.
I regret that I am unable to agree with the view of the majority that it was open to the learned trial judge to find that AMP was in breach of the contract because it did not provide appropriate counselling.
Counsel for KDL made the application to amend the statement of claim to allege breach of contract in failing to provide counselling after AMP’s case had closed. AMP’s counsel had been made aware of the application that morning. Mr Rydon, for AMP, opposed the application. He complained that he had not been given the opportunity to call evidence on the issue. He referred to State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 and distinguished that case from the present. Mr Rydon said that if the amendments were allowed the case which his client faced would change in “critical respects”. He said that no questions were put to two of AMP’s witnesses, Mr Leverington and Ms Patrick on the issue involved in the proposed amendment. Mr Rydon complained of the prejudicial situation in which his client had been placed and he submitted that the only way in which the prejudice could be overcome would be if he were permitted to reopen his case and call further evidence.
The learned trial judge indicated that he was minded to allow the application to amend, but he said he would have no hesitation in granting any application which Mr Rydon might make to reopen his client’s case. Mr Rydon then said that he anticipated his instructions would be to apply to reopen the case for AMP and he said that some arrangements would have to be made for future hearing dates because he had witnesses from interstate who would be called on the issue raised by the proposed amendments.
At this stage the following exchange took place between counsel for KDL and the trial judge:
“Mr Sykes:I expressed the view when I was announcing these amendments that they shouldn’t require this sort of evidence being re-opened or recalled. I can see that there is a possibility in some respects. I would have thought it’s a matter when at the end of the day, the plaintiff be given permission to call evidence in rebuttal if it sees fit.
His Honour: Why in rebuttal, why not at the start of their case. After all had they been put to notice and had your clients done what they should have done and what I strongly urged them to do after explaining their rights. If these questions had been put to his witnesses, then Mr Rydon would have had to bear the consequences if he hadn’t done what he’s now proposing to do subject to instructions.”
The trial judge added:
“... Mr Rydon has not presented evidence which he might have wanted to present had those amendments been in from the word go. He says ‘I’ve been greatly prejudiced’ and I think he’s right. He may or may not have been at the end of the day. His instructions may or may not be to call further evidence, but at the moment it seems to me that he’s right when he says that Browne v Dunn has not been complied. Your clients may or may not have understood what I told them, even when they said they did. But the fact of the matter is that if the case had been presented as you are now intending Mr Rydon may well have taken a different course. He’s been denied that opportunity through no fault of his own.”
Later in the day counsel for KDL told the court:
“My instructions from the defendants are not to proceed with the amendments if they are going to result in the adjournment of the trial and reopening by the plaintiff.”
I agree with the view expressed by the Chief Justice that the issue of counselling was touched on in only a peripheral manner in the course of Mr Leverington’s evidence. In my view it was treated as no more than a background circumstance and there was no suggestion that it was an important issue, let alone a matter which was directly relevant to a breach of contract.
There is no suggestion that counsel subsequently agreed between themselves that the case could proceed as though the amendment had been made and that a finding of breach of contract could be made by reason of failure to counsel. This was not a case in which AMP had deliberately decided to abandon its stance in the matter. It is safe to assume that when counsel for KDL raised the issue in his written and oral submissions he overlooked the fact that this part of his case had been abandoned by the withdrawal of the application to amend. The only other alternative is that, in making the submissions, he deliberately disregarded the abandonment of the point and no-one has suggested that this was the case. The tortuous history of the case renders the oversight more understandable and I think this also explains why the judge and counsel for AMP overlooked this aspect.
Whilst it must be acknowledged that pleadings are only a means to an end, there are cases in which the failure to plead an issue will lead to serious prejudice. In this case the matter is more pointed because there was an express abandonment of the issue. If there had been no such abandonment and the statement of claim had been amended there would have been obvious reasons of fairness, acknowledged by the trial judge, why AMP should have been given the opportunity to call evidence on this issue which subsequently became crucial to the result of the case. That prejudice did not evaporate when the abandonment of the point was overlooked at a later stage. The argument advanced on behalf of KDL on the hearing of the appeal has not persuaded me that this potential prejudice was removed by anything which occurred after that abandonment.
I appreciate that there are sound reasons for binding a party to the course which it adopts at the trial. However I do not regard an oversight of this nature by the judge and both counsel at the stage of addresses as having the effect of binding AMP so as to prevent it from relying on the express abandonment of the issue which took place at an earlier stage in the trial.
I would allow AMP’s cross-appeal against the finding that it was in breach of contract. I agree that the appeal by KDL, Mr Luu and Mrs Luu should be dismissed.

DEBELLE J. I have had the advantage of reading the draft reasons of the Chief Justice. I agree with the substance of those reasons and with the orders he proposes. I add the following on the question whether the AMP should be permitted to insist upon the issues in this case being determined in accordance with the pleadings.
The relevant facts are summarised by the Chief Justice. It is necessary, however, to emphasise some aspects of those facts. Although the evidence given by Mr Bieg on the question of counselling was relatively short, particularly given the detailed manner in which other issues in this case were explored, it nevertheless gave quite a clear account of what was involved in the counselling process. Counsel for AMP did not object, in the course of what was a fairly detailed examination on this topic, to the issue being explored. He did, however, object when, after Mr Bieg had described the AMP’s counselling procedures, he was asked whether he had determined whether the procedures had been followed. The objection was made for the purpose only of reminding the judge that Mr Bieg had already given evidence that he had not examined that question. The cross-examination on the topic of counselling then ended and counsel for the defendants went on to examine other issues.

As the Chief Justice observes in his reasons, although pleadings have an important function, they are not an end in themselves and, if the parties choose to depart from them, the judge may permit them to do so. In addition to the remarks of Mason CJ and Gaudron J in Banque Commerciale S.A. (In Liquidation) v Akhil Holdings Ltd (1991) 169 CLR 279 at 286 - 287 to which the Chief Justice referred, I refer to what Isaacs and Rich JJ said in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (In Liquidation) (1916) 22 CLR 490 at 517 - 518 and, in particular, to the following:
“Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. There is abundant authority for this, even if the matter were required to rest on authority only.”

These remarks were approved in Banque Commerciale.

When the closing submissions were made, it was common ground that the central issue was whether AMP had lawfully terminated the agency agreement. The parties had each prepared written submissions. The written submissions of counsel for AMP clearly refer to the issue of counselling asserting that Mr Leverington had provided that counselling. The submissions go into the question of counselling in some detail. They assert that AMP had gone to some lengths to provide counselling and that the “termination of the agency took place against the background of counselling” from 17 March 1994 until September 1994, when the agency was terminated.
The written submissions on behalf of the defendants were expressed in the alternative. They first asserted that the 1987 contract had not been varied. In the alternative, they contended that AMP had failed to comply with MTA94/36 by failing to comply with the procedures stipulated in that document to provide counselling. They asserted that counselling in accordance with that procedure required that AMP provide the agent with a written report after the initial counselling session which stated the objectives of the agent, a period in which the objectives were to be met, and the action to be taken in order to achieve those objectives. It is asserted that the procedure had not been followed. That submission was obviously based on the evidence of Mr Bieg.
The question of counselling was examined again in some detail in the course of oral submissions. Counsel for the defendants addressed the court first. Notwithstanding that counsel for AMP had received the defendants’ written submissions the previous day, he did not object to the submissions concerning counselling. Similarly, he did not object when the submission was developed in the course of oral submissions. However, he did object to that part of both the oral and written submissions in which the defendants asserted that AMP was estopped from terminating the contract or that it had acted unconscionably. The objection was grounded on the fact that the issues of estoppel and unconscionability had not been pleaded and had not in any other way been canvassed before they were raised in the written submissions. The judge did not rule on the objection but permitted the submission to be made subject to the objection. In the end the submissions were not adopted. The submissions for the defendants extended into a second day, giving counsel for AMP further opportunity to reflect on the defendants’ submissions. There was no objection on the second day that the question of counselling was not a proper topic. In short, counsel for AMP objected to part of the defendants’ submission on the ground that it raised entirely new issues but did not make any objection to the submission concerning counselling. The oral submissions for the defendants closed with the trial judge asking counsel for the defendants if the only breach relied on by the defendants was the failure of AMP to adhere to its counselling procedure. The assent of counsel for the defendants to that proposition produced no objection from counsel for AMP.
The question of counselling was addressed on at least three occasions in the course of the oral submissions by counsel for AMP. More significantly, on the first occasion on which counsel for AMP dealt in detail with the question whether his client had acted in accordance with the counselling procedures, he acknowledged that the issue of counselling was “almost a central plank in the defendants’ case”. He then went on to submit at some length that Mr Leverington had discharged the obligation to provide counselling. In the course of that submission, he examined what was involved in the obligation to provide counselling. The trial judge on two subsequent occasions drew counsel for AMP back to the issue of counselling and what was required to discharge that obligation.
This summary of the course of the written and oral submissions shows that submissions concerning the obligation of AMP to provide counselling were not accidental or inadvertent but were deliberate, considered and detailed. It was an issue to which counsel for both parties returned on several occasions. It was clearly stated by counsel for the defendants that they relied on the failure to provide counselling and counsel for AMP acknowledged that it was at the heart of the defendants’ case. At no time did counsel for AMP object that the defendants were constructing a case which had not been pleaded or which had not been addressed in evidence. It can only be assumed that he was content to rely on the evidence of Mr Bieg.
For these reasons, I do not think it can be said that the parties have not chosen to enlarge the issues beyond those which had been pleaded. Notwithstanding the abandonment of the application to amend the particulars to plead the failure of AMP to provide counselling, both parties joined issue in their respective submissions on the question whether AMP had complied with its counselling procedures before terminating the agency agreement. The conclusion that the parties had chosen to enlarge the issues to include the question of counselling is reinforced by the fact that AMP did object to the defendants seeking to raise in their final submissions issues as to estoppel and unconscionability.
It is apparent that when the defendants closed their case there was, for whatever reason, an issue whether AMP had failed to provide proper counselling. The course of the cross-examination of both Mr Bieg and Mr Liepkiewicz, to which no objection was taken, gave clear indication that the defendants regarded it as an issue. There is no profit in speculating why, given the fact that the defendants had earlier abandoned their application to amend, counsel for AMP did not object to submissions as to whether AMP had failed in its obligation to provide counselling. Counsel for AMP was quick to object to submissions concerning estoppel and unconscionability but acknowledged that one issue was whether AMP had failed in its obligation to provide counselling. He saw it as a central issue. Given the deliberate and considered submissions on the topic of counselling by AMP in its written submissions, it is too much to assume that the state of the pleadings and the abandoned application to amend had been overlooked. AMP is bound by its conduct of the trial.

[1999] SASC 442

14 October 1999