Mannall v Howard

[2019] ACTSC 112

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Mannall v Howard

Citation:

[2019] ACTSC 112

Hearing Date:

29 April 2019

DecisionDate:

29 April 2019

Reasons Date:

30 April 2019

Before:

Mossop J

Decision:

Leave granted for second defendant to file an Amended Defence

Catchwords:

PRACTICE AND PROCEDURE – PLEADINGS – Application to file an Amended Defence – proposed amendment made late in proceedings – leave to make amendment granted

Legislation Cited:

Road Transport (Third-Party Insurance) Act 2008 (ACT), s 7

Safety, Rehabilitation and Compensation Act 1988 (Cth), ss 44, 45, 45(4)

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175

Insurance Australia Ltd v Mannall [2017] ACTSC 368
Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2000] NSWSC 753

Tinworth v WV Management Pty Ltd [2009] VSC 552

Parties:

David Mannall (Plaintiff)

Malcolm Howard (First Defendant)

Insurance Australia Limited t/as NRMA Insurance (Second Defendant)

Representation:

Counsel

C Bridge SC with W Sharwood (Plaintiff)

H Chiu (First Defendant)

GM Watson SC with VM Heath (Second Defendant)

Solicitors

Sneddon Hall & Gallop (Plaintiff)

ACT Government Solicitor (First Defendant)

Moray & Agnew (Second Defendant)

File Number:

SC 468 of 2017

MOSSOP J:

Introduction

1. Yesterday afternoon I granted leave to the second defendant to file an Amended Defence.  These are my reasons for doing so.

1. The proceedings involve a claim for personal injury by the plaintiff, Mr Mannall, against the first defendant, Mr Howard, and the second defendant, Mr Howard’s third-party insurer, Insurance Australia Ltd trading as NRMA Insurance (NRMA).  NRMA has filed a Defence denying liability to indemnify Mr Howard.

1. In the Defence that had been filed the denial of indemnity was because it was said that the incident giving rise to Mr Mannall’s injuries was not a motor accident as defined in s 7 of the Road Transport (Third-Party Insurance) Act 2008 (ACT) (RTTPI Act). The proposed amendment raised the operation of ss 44 and 45 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). Section 44 provides that subject to s 45, “an action or other proceeding for damages does not lie against … a Commonwealth authority … or an employee in respect of … an injury sustained by an employee in the course of his or her employment”. It is likely to be uncontroversial that the Australian Capital Territory is a Commonwealth authority and that the first defendant is an employee for the purposes of this section. Section 45 permits an election in writing that permits a claim for damages to be made against the Commonwealth authority or employee but imposes limitations on the damages that may be recovered. The operation of s 44 of the SRC Act was raised by the Defence of the first defendant in a manner which assumed that an action might be available if it arose as a result of a motor accident as defined in s 7 of the RTTPI Act, but was otherwise barred by s 44 of the SRC Act.

Proposed amendment

1. The proposed amendment raises the operation of s 44 and s 45 of the SRC Act by saying that if NRMA is obliged to indemnify the first defendant, then it is only liable to indemnify the first defendant to the extent of any liability on the first defendant and there is no such liability because of s 44 of the SRC Act. Further, it seeks to plead that the exemption from s 44 provided by s 45 has not been enlivened and that if it has, then the liability of the first defendant and hence the second defendant is limited in a manner set out in s 45(4). That section limits the amount of non-economic loss recoverable to a maximum amount of $110,000.

Submissions

1. Senior counsel for the second defendant accepted that the proposed amendment was very late.  He recognised that there was no explanation in the evidence as to why the application was made so late.  He said from the bar table that although previous senior counsel had been involved, when he looked at the brief he identified the issue which has led to the present application.

1. He pointed to the fact that the first defendant’s Defence at [17] had already pleaded that by reason of the operation of s 44 of the SRC Act, an action for damages did not lie for the plaintiff against the first defendant.

1. He submitted that the amended pleading would not involve traversing any controversial facts, and hence, would not raise new factual issues that the plaintiff was required to address. He submitted that even without the pleading the court was obliged to apply the law and that s 44 and s 45 of the SRC Act would need to be addressed in any event.

1. Senior counsel for the plaintiff submitted that there was no proper explanation for the lateness of the proposed amendment, that the second defendant had at all times had very experienced senior counsel involved in the case.  He pointed to the fact that the accident in question had occurred in 2014 and that there had been previous proceedings brought by the NRMA seeking declaratory relief relating to whether or not it was liable to indemnify the first defendant.  Those proceedings were subsequently discontinued (see Insurance Australia Ltd v Mannall [2017] ACTSC 368) and the plaintiff then commenced the present proceedings. He made specific reference to the consideration of the decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 by J Forrest J in Tinworth v WV Management Pty Ltd [2009] VSC 552, a decision to which I will return below. He noted that the proceedings had been subject to a mediation and that the agreement as to damages that had been reached with the first defendant may have been influenced by the approach taken at that stage by the second defendant. He accepted that if leave was granted, the proceedings would not be delayed by the making of the amendment.

1. The decision of J Forrest J in Tinworth provides a useful summary of the principles identified in Aon. In particular at [27]:

(a)Courts must now consider the wider public interest and efficient use of limited Court resources when deciding whether to grant an application to amend a pleading.

(b)Parties do not have an entitlement to raise any arguable case at any stage of proceedings, subject only to payment of costs.

(c)Amendments that produce delay impact on the entire Court system and affected parties desirous of utilising that particular Court system.

1. His Honour then referred to the joint judgment and quoted from a passage in Aon which included [112], which is as follows:

A party has the right to bring proceedings.  Parties have choices as to what claims are to be made and how they are to be framed.  But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced.  That is why, in seeking the just resolution of the dispute, reference is made to the parties having a sufficient opportunity to identify the issues they seek to agitate.

(Emphasis added by J Forrest J.)

1. He also referred to and emphasised the statement of French CJ at [30] that:

Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they are for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in resetting of interlocutory processes.

1. Finally his Honour also referred to (at [317]) a portion of the judgment of Bryson J referred to in the judgment of Heydon J in Aon.  Bryson J’s judgment was that in Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2000] NSWSC 753 at [15]. Bryson J said:

I do not think that the law requires the discretion to allow amendments to be exercised in entire innocence of understanding the obvious impact of forbearance and liberality on the behaviour of litigants, who have diminished incentive to do their thinking in due time and to tell the court and their opponents their full and true positions. When forbearance and liberality are extended to a delinquent the burden of inconvenience and lost opportunities for preparation tends to fall heavily and without adequate repair on parties who have not been delinquent. A relative disadvantage is imposed on those who proceed methodically and in due time; their interest in procedural justice should claim at least as much consideration as the interests of the applicant for a late amendment who does not have to look far for the creator of his difficulty.

1. This is a very useful statement of the pernicious effect of late applications to amend and hence I agree with Heydon J that the decision merits preservation from “the oblivion of unreported judgements”: see Aon at [133].

Reasons for decision

1. I granted leave to make the amendment because:

(a)The amendment raises a proposition which was at least arguable and potentially significant for the outcome of the case.  While the argument on the merits of the defence was limited, the issue appeared to be whether or not the statutory regime in the RTTPI Act gave rise to a statutory entitlement as against the insurer which would displace the usual rule that the insurer was only liable to the same extent as the insured.  The statutory provisions referred to in argument certainly did not make that clear.

(b)The amendment would not raise any new contested factual issue of any significance to the running of the case.

(c)The amendment would not delay the hearing or determination of the proceedings.

(d)Leave should not be refused simply to punish the defendant for failing to raise the issue earlier.

1. Insofar as there was a suggestion that the position of the plaintiff vis-à-vis the first defendant might have been influenced by the attitude of the second defendant, that is simply a matter of speculation.  Had there been some significance to the approach taken by the plaintiff in resolving any issue in the proceedings, then that was a matter of which evidence might have been led but was not.

1. The facts did not provide any good explanation for the late amendment: cf Aon at [102]-[103]. I accept that the reason for the amendment was that the inclusion of a defence based on s 44 and s 45 was not considered until senior counsel currently briefed for the NRMA was briefed. The briefing of new counsel who has new ideas about a case is generally not a good excuse for a late application to amend. The remarks of Bryson J in Maronis are apposite.  That parties must bear the consequences of their briefing decisions, including decisions to brief late. This is also reflected in Practice Direction 2 of 2014 which requires parties to disclose whether counsel has been briefed and whether advice on evidence has been obtained.  However, in the circumstances of this case, the lateness of the amendment in the absence of any procedurally acceptable explanation was not fatal to the application.

1. Clearly, the granting of leave to amend the pleadings carries with it hazards for the plaintiff.  However, the plaintiff is not entitled to be protected from arguments that are contrary to the case that he wishes to put.  Rather, he is entitled to be protected from procedural unfairness arising from the manner in which the defendant has approached the preparation of the trial.  In the present case, while there may turn out to be substantive prejudice in permitting the defendant to amend its pleadings in the manner proposed, there is only very limited relevant prejudice in permitting the amendment to be made at this stage of the proceedings.

1. It is for those reasons I granted leave.

I certify that the preceding eighteen [18] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 21 June 2019