Mansions of Australia P/L v Chubb Insurance Company of Australia Ltd

[1994] FCA 772

JUDGMENT No. .... ~L&.J ,....

FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY	)	No. G 450 of 1994
GENERAL DIVISION	1

BETWEEN:
MANSIONS OF AUSTRALIA

PTY LIMITED

Applicant

AND :
CWBB INSURANCE COMPANY OF

AUSTRALIA LIMITED

Respondent

CO-:	SACKVILLE J.	RECEIVED
PLACE :	SYDNEY
DATE:	19 OCTOBER 1994	2 5 OCT 1994
FEDERAL COURT OF

AUSTFIALIA PRINCIPAL REGISTRY

REASONS FOR JUDGMENT

HIS HONOUR: This is an application to amend the statement of claim by the addition of further particulars to paragraph 5 of the statement of claim as originally filed. Paragraph 5 contains an allegation that the document in issue in this case, described as "Masterpiece Coverage Comparison", was published in circumstances that constituted conduct that was misleading or deceptive or likely to be misleading or deceptive in contravention of 8.52 of the Trade Practices Act 1974.

mislead or deceive. The particulars go on to give nine specific	representations that are misleading or deceptive, or likely to
illustrations of the manner in which the document contains statements that are said to be either inaccurate or untrue. These are as follows:

The particulars originally provided alleged that the document contained statements concerning the applicant's insurance products, which are either inaccurate or untrue or which are

extended replacement cost not included;
policy requires insured to buy extra coverage for "other
structures";
"special 1imits/jewe11ery/$20,000.00 total";
limit of $5,000.00 per item for "fine arts";
extra coverages/personal computer data replacement not
included in policy;
debris removal not included/must be added to building sum
insured;
"extra living expenses" and "unoccupancy clause" as "extra
coverages";
"medical payments to others" not included;

defence coverage not included.

The application to amend is for the addition of four particulars,

(j), (k), (l), and (m), which are as follows:
(j)	Building: Cash Settlement Option based on Replacement Cost

- Included (Masterpiece): Not Included (Mansions);

(k) Contents: Cash Settlement Available at Client's Option - Included (Masterpiece): Not Included (Mansions);

(1) Valuable Articles: Cash Settlement Client's Option -

Included (Masterpiece): Not included (Mansions);

(m) Liability Coverage: Damage to Property of Others - Included (Masterpiece): Not included (Mansions).

Two of the earlier particulars are proposed to be deleted. There is of course no difficulty about that.

In relation to proposed particular (m), Mr Deakin, on behalf of the respondent, indicates that there is nothing that he can say to indicate substantial prejudice to the respondent if that were to be added to the statement of claim. I propose to allow the amendment to the extent of including particular (m). However, particulars (j), (k) and (1) fall into a different category.

As Mr Deakin points out, those particulars, unlike others, raise allegations based upon what is said to be a misrepresentation in the document of the contents of the res~ondent's policy. The other particulars previously provided, including proposed particular (m), relate to alleged misrepresentations in the document concerning the a~~licant ' S insurance coverage in its policy. Mr Deakin submits and I think correctly that this raises

an issue different in kind from the other issues that are raised	in the statement of claim.
More particularly, however, Mr Deakin polnts to prejudice that would or might be incurred by the respondent if this amendment were permitted. He makes the point that notice of the amendment was given in precise terms only yesterday. Furthermore, he points out that the allegations are that the document was disseminated within a restricted group, that is to say insurance
brokers whose knowledge, experience and expertise is such that it is not simply a matter of assessing the effect of the document
upon ordinary readers in the general community.
Mr Deakin also points out that expert evidence has been filed on
both sides in this case, relating to the understanding that might be obtained by the audience receiving this document. He submits that the respondent would or might be required to adduce expert evidence relating to these new allegations. The respondent's expert is from Melbourne and has only arrived this mornlng for the purposes of the conduct of the case.
In response Mr Coles indicates that the issue is really simply whether or not the relevant clauses are in the respondent's policies. I do not think that the matter can be approached this way having regard to the lateness of the proposed amendments and the state of the material before the Court. It is perfectly clear that, for whatever reason, the parties have chosen to rely upon expert evidence in order to elucidate the issues in the
case. Whether that evidence turns out to be helpful or otherwise is not to the point. It is there and it seems to me that it is
not open to say that the respondent will not suffer prejudice as the result of the proposed amendments. In my view prejudice may well result. M r Coles has also submitted that the absence from the respondent's policy of the relevant clauses was pointed out in an expert report that was served on 6 October 1994. That report was itself out of time in terms of the directions given earlier in these proceedings. More to the point, however, the
fact that something is pointed out in an expert report is not the equivalent of proposing and framing precise amendments so that the nature of the case to be made out is made abundantly clear to the respondent and for that matter to the Court.
In the circumstances I propose to reject the application to amend the statement of claim insofar as that application relates to particulars (j), (k) and (1). I allow the amendment insofar as it relates to paragraph (m).
H I S HONOUR: I have already ruled that paragraph 4 of the affidavit of Mr Goodlad is not admissible upon the pleadings and particulars as they presently stand. Faced with that ruling, M r Coles has sought to amend the particulars that were provided in a letter of 29 August 1994 to the solicitors for the respondent.
His application is to amend the particulars to include a
particular that alleges the statement made in the comparison document relating to coverage of outbuildings is misleading or
deceptive because it failed to disclose that the Chubb policy was limited to permanent structures, whereas the Mansions policy covered not only permanent structures but temporary or mobile structures.
It seems to me that the proposed amendment at this stage of the proceedings creates such difficulties for the orderly and expeditious management of the litigation that I should not allow it. Mr Coles submits that there would be no irremediable prejudice to the respondent if the amendment were allowed. However, Mr Deakin, in his submissions, indicates that it may be necessary to adduce expert evidence in relation to the proposed additional particular. That, of itself, is a powerful reason for not allowing the amendment.
I appreciate that it is difficult at this stage to determine just what, if any, additional evidence might be required. But that is the point. It is extremely difficult to determine what effect the amendment would have on the conduct of the litigation. In any event, quite apart from the question of expert evidence, this case has been brought on at relatively short notice in accordance with pleadings and particulars provided to the respondent. The addition of new issues by way of amendment, even though they may appear individually not to raise particularly complex questions, necessarily leads to an expansion in the scope of the litigation and the time it will take to resolve the matter.
As the parties are aware, the case was listed on the basis that it would take a day and that the issues were relatively straight
forward, involving in substantial measure a comparison of documentation. If the issues are to be expanded at this stage the case itself plainly will take more court time and it will not be easy in any event to accommodate that within the Court calendar. It seems to me that, independently of the question of prejudice, there is a powerful case for rejecting the application because of the need to ensure that the litigation is conducted in the manner contemplated. For those reasons I disallow the application for amendment of the particulars. The result will be that paragraph 4 of the affidavit remains rejected.

I certify that this and the preceding 1 page are a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Associate:  'It7 F&-- --fi

Dated: 19 October, 1994

Heard :	19 October 1994
Place:	Sydney
Decision :	19 October 1994
Appearances:	B. Coles QC with Mr P Clay, instructed by McCabe Brown, Solicitors, appeared for the applicant.
Mr P. J. Deakin QC with Mr S. Gregory, instructed by Curwood & Partners, Solicitors, appeared for the respondent.