NCON Australia Ltd v Spotlight Pty Ltd (No 2)
[2011] VSC 100
•23 February 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8246 of 2009
| NCON AUSTRALIA LIMITED (ARBN 099 019 851) | Plaintiff |
| v | |
| SPOTLIGHT PTY LTD (ACN 005 180 861) | Defendant |
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JUDGE: | Robson J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 - 18, 21 - 25 and 28 February and 1 - 2 March 2011 | |
DATE OF RULING: | 23 February 2011 | |
CASE MAY BE CITED AS: | NCON Australia Ltd v Spotlight Pty Ltd (No 2) | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 100 | |
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PRACTICE AND PROCEDURE – application to amend claim for damages – amendment sought once trial had started – plaintiff foreshadowed intent to increase damages claim before trial – amendment allowed once proper particulars supplied to the defendant
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr R L Dean Dr M R Sharpe | Peter G Richards |
| For the Defendant | Mr R Garratt QC Ms R B Sion | Cornwall Stodart |
HIS HONOUR:
The defendant has objected to Mr Reibel being asked questions relevant to an increased damages claim. The existing particulars of loss of damage dated 4 September 2009 make a claim for damages of $1,494,556.72. That claim is premised on the assumption that NCON Australia Limited lost the benefit of a five year lease. The plaintiff wishes to amend its claim for damages to include a further or alternative claim of damages of an unspecified sum based on a ten year lease.
The affidavit of Mr Richards of 15 February 2011 discloses that the plaintiff foreshadowed its intention to increase its damages claim on 20 January 2011.
Mr Richards affidavit, in part, reads as follows:
On 20 January 2011 I had a conversation with Ms Forde. In that conversation I stated the plaintiff wished to deliver amended particulars of its loss and damages which increased the quantum of the claim. I stated that those particulars were in the form of a supplementary witness statement of Mr Reibel. I explained that there were two changes that were simple; namely, allowing for tax offsets which had been omitted, and, secondly, taking account that on the balance of probabilities the five year lease would have been extended for a further term of five years to ten years to total.
…
I reiterated that Mr Reibel was concerned about disclosing any supplementary witness statement, information and material which he considered constituted valuable intellectual property owned by himself. Mr Reibel requested of me that I request that the statement be given to counsel brief on behalf of the defendant, Ms Forde and Cornwall Stodart, on the basis only that they give undertakings as to confidentiality.
On 20 January 2011, after that conversation, I confirmed that conversation in a letter to Cornwall Stodart again setting out the two changes.
Mr Richards exhibited the letter as PGR2 to his affidavit. In the letter Mr Richards, under the heading of “Damages claimed by the plaintiffs”, states:
I wish to deliver amended particulars of damage. The claim is now $2,292,558.32 on the basis that on the balance of probabilities the five year lease would have been extended to ten years and this amount is the loss of profit for a lease comprising two periods of five years. Alternatively, if the court finds on the balance of probabilities the lease was confined to five years only, the damages claim is now $1,789,205.70. The difference between this amount and the amount shown in the particulars of loss and damage already served is the tax offset initially omitted which should have been included.
The detailed calculations in relation to these amounts involves a disclosure of valuable intellectual property by the author, as I have previously foreshadowed. Would you be prepared to give an undertaking; (1) That the calculations will be kept confidential to yourself, your firm and counsel briefed to the matter, and, (2) That the calculations are not disclosed in particular to your client.
As I understand it the plaintiff’s position now is that they do not seek to substitute the figure of $1,789,205.70 for the figure of $1,494,556.72 which appears in the particulars of loss and damage of 4 September 2009. Rather, they seek to pursue a further and alternate claim for the sum of $2,292,558.32.
I understand that the plaintiff no longer seeks to include in its calculations of loss and damage what the letter refers to as “Tax Offset”. If this claim is to proceed, proper particulars must be given to the defendant.
Mr Richards further states in his affidavit:
After 20 January 2011 and prior to 28 January 2011, I telephoned Ms Forde twice, however, she did not take or return those calls, notwithstanding that I asked that she return those calls.
On 27 January, having received no response to my letter of 20 January 2011 or any response to my two phone calls, I sent an email to Ms Forde.
Mr Richards produces the email. The email does not refer to the amended damages claim, nor Mr Reibel's proposed supplementary witness statement.
Mr Richards further states:
By 28 January 2011, I had received no response to my letter of 20 January 2011, nor any return to my phone messages, nor the email. Accordingly I wrote another letter to Cornwall Stodart, wishing to give the defendant as much time as possible before trial to consider the amended damages. On 28 January 2011, I enclosed a copy of the supplementary witness statement notwithstanding that on that date, no confidentiality undertakings had been given. I did so on the express condition that if the solicitors were not prepared to give the undertaking sought, that they return the supplementary witness statement to me without taking any copies.
The plaintiff has not sought to file an amended particulars of loss and damage document, but I assume that it was treating the matters set out in the supplementary witness statement as giving the defendant notice of its increased claim.
Mr Richards states:
I enclosed a copy of the supplementary witness statement notwithstanding on that date no confidentiality undertakings had been given. I did so on the express condition that if the solicitors were not prepared to give the undertaking sought, that they return the supplementary witness statement to me without taking any copies.
Mr Richards exhibits his letter of 28 January 2011. In the letter he says he is enclosing a supplementary witness statement of Anthony Kim Reibel in relation to damages and states that the witness statement is -
provided to you on the basis that you will give the undertaking I have sought in my letter of 20 January 2011, which remains unanswered. If you are not prepared to give the undertaking sought, please return the same to me without taking any copies.
Mr Richards goes on in his affidavit to say:
On 28 January, after I had dispatched my letter of 28 January 2011, I received an attachment to an email, a letter from the defendant's solicitors dated 28 January 2011. In that letter the solicitors indicated that in effect, and what I took to mean that an accountant would need to comment on the amended particulars.
Mr Richards produced a copy of the defendants’ solicitors’ letter. In the last paragraph of the letter they state:
You have foreshadowed delivering an amended particulars of damage. Any undertaking would need to extend to an accountant to comment on the nature of the claim. Given, however, that we have a trial commencing on 14 February 2011, we object to the late delivery of material supporting the damages claim and the proposed amendment to increase the claim by approximately half a million dollars.
Mr Richards then states in his affidavit:
In the light of that letter, I obtained instructions from Mr Reibel who said he was content for an accountant to examine the supplementary witness statement, provided he or she was an expert independent to Spotlight who had not worked previously for Spotlight.
…
Accordingly, I passed on those requirements to Ms Forde in an email dated 31 January 2011. I stated that I enclosed a copy of a confidentiality agreement for the accountant I had drafted, however I inadvertently omitted to attach the same.
Mr Richards then further deposes about supplying the confidentiality agreement to Ms Ford before stating:
I received no contact by email, telephone, letter or otherwise of any description from Ms Ford or Cornwall Stodart between 1 February 2011 and 10 February 2011 at 4.59 p.m. In particular, I received no advice concerning the supplementary witness statement or the confidentiality agreement or confidentiality undertaking requested by me. That at 4.59 p.m. on 10 February 2011, I received a letter from Cornwall Stodart annexed to an email. This was the first indication that the matter of confidentiality of the changes were not acceptable, although the defendant’s solicitor has not indicated why the confidentiality agreement was not acceptable.
In the letter of 10 February, Cornwall Stodart state:
We refer to the expert evidence which was served on 27 and 28 January 2011. The defendant objects to the late delivery of that evidence and due to the technical nature of the reports, we have not been able to have the material reviewed in the timeframe. We cannot agree to confidentiality of Anthony Reibel's second statement. In the circumstances we can either destroy the statement or return it to you. We will be objecting to statements previously indicated.
When the hearing began on 15 February 2011, the particulars of damage had not been formally amended. The supplementary statement of Mr Reibel, which contained the increased claim for damages, was the subject of dispute and had been returned by the defendant.
During the opening the plaintiff referred to the issue of updated damages, which he said that the defendant is apparently not objecting to. However the defendant, early in the trial, stated they would be objecting to the updated damages.
The defendant was not taken by complete surprise about a proposed increased claim in damages. The defendant has been told for some time now, as early as 20 January of this year, which is a month ago, that the plaintiff wanted to add a further alternative claim based upon a ten year lease agreement, as opposed to a five year lease agreement.
We are in the unhappy position where the plaintiff has not crossed its T’s and dotted its I’s by formally seeking to amend its particulars of loss of damage. The defendant has, because of the conditions placed on it, not properly prepared itself to meet this claim.
On the other hand, the plaintiff has foreshadowed quite clearly for some time that it wants to make this claim.
Proper particulars should be supplied to the defendant of the claim. To determine the real question in controversy between the parties the Court may allow an amendment: O 36 Supreme Court (General Civil Procedure) Rules 2005. I will permit this issue to be pursued so long as the defendant is given proper particulars.
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