M+W Singapore Pte Ltd v Multiplex Constructions Pty Ltd - [2018] WASC 253

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   M+W SINGAPORE PTE LTD -v- MULTIPLEX CONSTRUCTIONS PTY LTD [2018] WASC 253
CORAM:   VAUGHAN J
HEARD:   16 AUGUST 2018
DELIVERED          :   21 AUGUST 2018
FILE NO/S:   CIV 3118 of 2017
BETWEEN:   M+W SINGAPORE PTE LTD
Plaintiff
AND
MULTIPLEX CONSTRUCTIONS PTY LTD
Defendant

FILE NO/S: CIV 1812 of 2016
BETWEEN: MULTIPLEX CONSTRUCTIONS PTY LTD
Plaintiff
AND
M+W SINGAPORE PTE LTD
Defendant

FILE NO/S: CIV 2406 of 2015
BETWEEN: M+W SINGAPORE PTE LTD
Plaintiff
AND
MULTIPLEX CONSTRUCTIONS PTY LTD
Defendant

Catchwords:

Practice and procedure - Vacation of consent order - Application for early trial or hearing of preliminary issue - Determination of who to be 'in the money' prior to determination of substantive dispute - Turns on own facts

Legislation:

Nil

Result:

Application for early trial granted
Consent order vacated to facilitate order for early trial

Category: B

Representation:

CIV 3118 of 2017

Counsel:

Plaintiff	:	MN Solomon SC & A Sinclair
Defendant	:	P O'Sullivan QC

Solicitors:

Plaintiff	:	Tottle Partners
Defendant	:	King & Wood Mallesons

CIV 1812 of 2016

Counsel:

Plaintiff	:	P O'Sullivan QC
Defendant	:	MN Solomon SC & A Sinclair

Solicitors:

Plaintiff	:	King & Wood Mallesons
Defendant	:	Tottle Partners

CIV 2406 of 2015

Counsel:

Plaintiff	:	MN Solomon SC & A Sinclair
Defendant	:	P O'Sullivan QC

Solicitors:

Plaintiff	:	Tottle Partners
Defendant	:	King & Wood Mallesons

Case(s) referred to in decision(s):

Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc [1981] HCA 39; (1981) 148 CLR 170
Alford v Ebbage [2002] QCA 194; [2003] 1 Qd R 343
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47.
Chanel Ltd v F W Woolworth & Co Ltd [1981] 1 WLR 485
Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [2008] FCAFC 136; (2008) 249 ALR 458
Commonwealth Bank of Australia Ltd v Saraceni [2013] WASC 115
Commonwealth of Australia v Albany Port Authority [2006] WASCA 185
CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [2017] WASC 112
CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 2] [2017] WASCA 123
Dedert Corporation v United Dalby Bio-Refinery Pty Ltd [2017] VSCA 368
Fletcher Construction Australia Ltd v Varnsdorf Pty Ltd [1998] 3 VR 812.
Hutchinson v Nominal Defendant [1972] 1 NSWLR 443
Landsdale Pty Ltd v Moore [2009] WASCA 176
M+W Singapore Pte Ltd v Multiplex Constructions Pty Ltd [2018] WASC 108.
Moore v Stockland South Beach Pty Ltd [2011] WASC 337
R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 18 FCR 389
Sugar Australia Pty Ltd v Lend Lease Services Pty Ltd [2015] VSCA 98
Terravision Pty Ltd v Black Box Control Pty Ltd [2014] WASC 261
Trust Company (Nominees) Ltd v Angas Securities Ltd (No 4) [2016] FCA 1240
Woods v Sheriff of Queensland (1895) 6 QLJ 163

VAUGHAN J:

Nature of the application

The application before the court…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] WASC 253
Decision Date: 21 AUGUST 2018

CaseChat Overview and Summary

In the case of M+W Singapore Pte Ltd v Multiplex Constructions Pty Ltd, M+W sought an early trial of a preliminary issue relating to the contractual construction of the security and retention bonds, which arose from a dispute between the parties. The primary legal issue was whether it was in the interests of justice to determine the preliminary issue before the substantive dispute in another action was resolved. The court had to consider the implications of the construction question on the parties' agreement and the practical effect of the security provisions.

The court examined the procedural history and the arguments presented by both parties. M+W argued that determining the preliminary issue would resolve the ultimate issue in their proceedings, expedite the process, and avoid delaying the determination of the principal issue in the other action. Multiplex contended that the construction question should be left to await the substantive dispute, as it believed that the court's determination would be of little practical moment if Multiplex's actions were authorised under the subcontract.

The court found that determining the preliminary issue was in the interests of justice, as it would resolve the ultimate issue in M+W's proceedings and avoid rendering the court's determination largely futile or pointless. The court also noted that leaving the construction question to be determined with the substantive dispute would mean that Multiplex would remain in the money and the parties' agreement as to the provision of security and allocation of risk would be ineffective in practical terms.

The court ordered that an early trial of the preliminary issue be held, which would determine the proper construction of the security arrangements under the building contract on a final basis. This decision was made to ensure that the court's determination would have a practical effect on the parties' agreement and the allocation of risk between them.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Procedural background Three actions have arisen out of these events. On 4 September 2015 M+W commenced action CIV 2406 of 2015. In that action M+W disputes Multiplex's entitlement to call on the security and the retention bond. On 21 January 2016 M+W filed an amended statement of claim in action CIV 2406 of 2015 introducing additional claims for money due for maintenance works, variations and delay costs. On 3 March 2016, subsequent to a change in legal representation, M+W filed a notice of discontinuance as to the new claims introduced by the amended statement of claim dated 21 January 2016. The notice of discontinuance was filed based on M+W's new solicitors' view that it would be preferable, in terms of case management, to keep the security and retention bond claims separate from all other claims. On 22 March 2016 M+W filed a substituted statement of claim in CIV 2406 of 2015. On 13 April 2016 Multiplex filed its defence. On 22 April 2016 M+W filed its reply to the defence. On 17 May 2016 Multiplex commenced a separate action, CIV 1812 of 2016, claiming liquidated and unliquidated damages based on M+W's alleged breach of the subcontract and indemnities provided by M+W under the subcontract. Among other things, Multiplex alleges that M+W delayed the Practical Completion date and otherwise failed to complete the works contemplated by the subcontract in accordance with the requirements of the subcontract. On 20 May 2016, at the request of the parties, CIV 2406 of 2015 was admitted into the Commercial and Managed Cases List (CMC List) of Martino J. On 24 June 2016 Multiplex filed its statement of claim in CIV 1812 of 2016. The statement of claim pleads at par 25 that if in CIV 2406 of 2015 it is held that Multiplex wrongfully made demand on the security and retention bond then the amount of the security and retention bond should be deducted from Multiplex's claims in CIV 1812 of 2016. On 22 July 2016 M+W filed a defence and counterclaim in CIV 1812 of 2016. M+W's counterclaim makes claims similar to those that were previously made and then discontinued by it in CIV 2406 of 2015. On 4 August 2016, at the request of the parties, CIV 1812 of 2016 was admitted into the CMC List of Martino J. On 15 August 2016 the court made orders programming an application by Multiplex for consolidation of CIV 2406 of 2015 and CIV 1812 of 2016. There had earlier been an exchange of views by correspondence, and also at a without prejudice conferral conference, as to the question of consolidation. M+W's solicitors had suggested that the issues in CIV 2406 of 2015 were confined and it was entitled to have a trial of that action at the earliest possible time. M+W did not agree to consolidation but agreed to having the two actions case managed together. Subsequently, the consolidation application was listed for hearing at 10.30 am on 26 October 2016. On 1 September 2016 Multiplex filed a consolidation application by chamber summons seeking orders to the effect that actions CIV 2406 of 2015 and CIV 1812 of 2016 be consolidated and carried on as one action or, alternatively, orders to the effect that those actions be heard and tried together. Multiplex filed submissions in support of its application on 21 September 2016.

Evidence

Evidence Before The Court

The evidence on the application M+W's application is supported by an affidavit of Richard Michael Wilenski sworn 24 July 2018. Mr Wilenski is a partner at Tottle Partners, the solicitors acting for M+W. Mr Wilenski's affidavit contains a summary of the procedural history to the application.[5] Mr Wilenski deposes that he was of the view that M+W's agreement to consent orders to the effect that each action would be heard together would not preclude M+W from seeking to have the contractual construction question in CIV 2406 of 2015 and CIV 3118 of 2017 determined as a preliminary issue.[6] [5] Affidavit of Richard Michael Wilenski sworn 24 July 2018 pars 70 ‑ 79.[6] Affidavit of Richard Michael Wilenski sworn 24 July 2018 pars 35, 58, 70. Prior to the 10 July 2018 strategic conference I asked through my associate that the parties populate a strategic conference memorandum addressing case management items. Mr Wilenski deposes that as part of his preparation of that memorandum he again considered the preliminary issue first raised by M+W in its position paper for the strategic conference in October 2016. It is said that, after conferral with senior counsel, the solicitors and counsel for M+W came to the view that the preferable course of action for the case management of the contractual construction issue would be to have an early trial of CIV 3118 of 2017 and a partial early trial of CIV 2406 of 2015 because the matters that M+W is seeking to have determined are the ultimate issue in those proceedings.[7] [7] Affidavit of Richard Michael Wilenski sworn 24 July 2018 par 75. In accordance with the views set out in Mr Wilenski's affidavit, in the strategic conference memorandum, and at the strategic conference on 10 July 2018, M+W proposes an early trial of CIV 3118 of 2017 and a partial early trial of CIV 2406 of 2015. Otherwise, Mr Wilenski's affidavit speaks to three further matters, namely: (1)First, Mr Wilenski provides an estimate of the time required for the determination of the preliminary issue or the hearing of an early trial for CIV 3118 of 2017 and part of CIV 2406 of 2016. He suggests that it will likely take one day and no more than two days.[8] (2)Second, Mr Wilenski deposes that in his view the determination of the preliminary issue or the hearing of an early trial will have no effect on the steps currently programmed through to 31 May 2019 in CIV 1812 of 2016. Conversely, Mr Wilenski deposes that if there is not an early trial or hearing of the preliminary issue then the whole of CIV 3118 of 2017 and the determination of the principal issue in CIV 2406 of 2015 will be significantly delayed pending the completion by the parties of unrelated procedural steps in CIV 1812 of 2016. It is also said that the matters to be resolved in CIV 1812 of 2016 do not affect the construction of the contractual provisions which would be determined in the proposed early hearing.[9] (3)Third, Mr Wilenski identifies the bases on which an early trial or determination of the preliminary issue is desirable.[10][8] Affidavit of Richard Michael Wilenski sworn 24 July 2018 pars 82 - 83.[9] Affidavit of Richard Michael Wilenski sworn 24 July 2018 pars 84 ‑ 87.[10] Affidavit of Richard Michael Wilenski sworn 24 July 2018 par 88.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

In part this view is taken as the decision to grant or refuse the interlocutory injunction may in a practical sense determine the substance of the matter in issue. Also, as was explained by Kaye JA in Dedert Corporation v United Dalby Bio-Refinery Pty Ltd:The determination of the application for an interlocutory injunction on behalf of the applicant would potentially be dispositive of at least part of the subject matter of the proceeding. If the interlocutory injunction were granted, it would be determinative of the extent of the security afforded by the guarantee, and the question as to which party should be out of pocket pending resolution of any dispute under the contract. On the other hand, if, as occurred in this case, the application for interlocutory injunction were refused on the basis of the undertaking proffered by the respondent, such a resolution would extend the duration of the security provided by the guarantee until after the determination of the substantive dispute between the parties under the contract. It would also affect, at least in part, the allocation of the risk of which party should be out of pocket pending determination of that dispute.[44] (emphasis added)[44] Dedert Corporation v United Dalby Bio-Refinery Pty Ltd [100]. However, Whelan JA (dissenting) had a different view as to the detriment caused by a 'temporal extension' of the obligation to provide security (albeit expressed in the context of balance of convenience analysis): at [15]. In those circumstances it is appropriate, on such an application to restrain the holder from calling on the bank guarantee, to determine the proper construction of the security arrangements under the building contract on a final basis when it is practicable to do so. The observations of Kaye JA are apt, and ought to be applied by analogy, to the question currently before me. To leave the construction question to await determination with the substantive building and construction dispute in CIV 1812 of 2016 would be to render largely futile or pointless the court's determination as to Multiplex's entitlement to have recourse to the security and the retention bonds. The court's determination on the construction question will be of little practical moment as between the parties if it is found that Multiplex's actions were authorised under the subcontract. Multiplex, having exercised what it says was its entitlement to do so, is in the money and will stay in the money. But let it be assumed (only for the sake of considering whether it is in the interests of justice that the construction question be adjudicated before the substantive dispute) that on a proper construction of the subcontract the true position is that contended for by M+W: Multiplex had no entitlement to resort to the security and the retention bonds. However, by standing over the construction question to be determined with the substantive dispute Multiplex will remain in the money and the parties' agreement as to the provision of security and allocation of risk will have been ineffective in practical terms.