Pacific National (ACT) Limited (ACN 48 052 134 362) v Queensland Rail (ABN 47 564 947 264)

[2005] FCA 958

FEDERAL COURT OF AUSTRALIA

Pacific National (ACT) Limited (ACN 48 052 134 362) v Queensland Rail (ABN 47 564 947 264) [2005] FCA 958

PRACTICE AND PROCEDURE – leave sought to amend statement of claim - whether amendment is relevant

Commonwealth of Australia v Verwayen (1990) 170 CLR 394 referred to
Giumelli v Giumelli (1999) 196 CLR 101 referred to
Grundt v Great Boulder Pty Gold Mines Limited (1937) 59 CLR 641 referred to
Malec v J C Hutton Pty Limited (1990) 169 CLR 638 referred to
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 referred to

Spencer Bower and Turner (1997) The Law Relating to Estoppel by Representation, Third Edition, Butterworths, London

PACIFIC NATIONAL (ACT) LIMITED (ACN 48 052 134 362) V QUEENSLAND RAIL (ABN 47 564 947 264)

N 690 of 2003

JACOBSON J
8 JULY 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 690 of 2003

BETWEEN:	PACIFIC NATIONAL (ACT) LIMITED (ACN 48 052 134 362) APPLICANT/CROSS-RESPONDENT
AND:	QUEENSLAND RAIL (ABN 47 564 947 264) RESPONDENT/CROSS-CLAIMANT
JUDGE:	JACOBSON J
DATE OF ORDER:	8 JULY 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Leave is refused to amend the Third Further Amended Statement of Claim to add those portions of paragraphs 62(c), 68(c) and 70A(c) which the applicant sought to introduce in the Fourth Further Amended Statement of Claim.

2.Leave is granted to amend the Third Further Amended Statement of Claim, as contained in the Fourth Further Amended Statement of Claim, with the exception of those amendments referred to in Order 1 above.

3.The applicant is to pay the costs thrown away by the amendments occasioned by the Fourth Further Amended Statement of Claim.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 690 of 2003

BETWEEN:	PACIFIC NATIONAL (ACT) LIMITED (ACN 48 052 134 362) APPLICANT/CROSS-RESPONDENT
AND:	QUEENSLAND RAIL (ABN 47 564 947 264) RESPONDENT/CROSS-CLAIMANT

JUDGE:	JACOBSON J
DATE:	8 JULY 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Introduction

1. Pacific National (“PN”) seeks leave to amend its statement of claim to plead that if Queensland Rail (“QR”) resiled from the assumptions pleaded in [54] of the third further amended statement of claim, there is at least a real possibility that it will suffer substantial operational detriment to its integrated national rail freight operations in the following way as set out in paragraph 62(c) of the proposed fourth further amended statement of claim:-

   “62.    If at any time Queensland Railways or the Respondent resiled from or departed from the Assumptions then, having regard to the circumstances referred to in paragraphs 59 and 60 above and paragraph 135(b) below, the Applicant would suffer the detriment of -

   …

   (c)having fully integrated the Acacia Ridge Terminal into the Applicant's national rail freight operations, by making the Acacia Ridge Terminal a part of the Applicant's integrated national systems and services, the Applicant will, or alternatively there is a probability, or alternatively at least a real possibility that it will, in the event that the Respondent resiles from or departs from the Assumptions by:

   (i)the Respondent itself taking over control of the management and operation of the Acacia Ridge Terminal or alternatively the Respondent placing such control in the hands of a third party, particularly if the Acacia Ridge Terminal is to be operated as a multi-user facility;

   (ii)the Respondent limiting the nature or extent of the Applicant’s access, or the period over which the Applicant may have access, to the Acacia Ridge Terminal or alternatively by the Respondent excluding the Applicant, at any time during which the Applicant continues to engage in national commercial rail freight operations, from substantial access to the Acacia Ridge Terminal,

   suffer substantial operational detriment to its integrated national systems and services with a consequential substantial loss of business and, accordingly, substantial loss of profits, when compared with the level of business and level of profits reasonably likely to be attained if the Respondent adheres to the Assumptions and/or will incur the very significant costs and will suffer the very substantial delay associated with the acquisition of land for, and the construction, development and commissioning of, an alternative terminal (if a suitable alternative site could be identified, acquired and developed) having regard to the facts referred to in paragraphs 73A-73D below.”

2. I have highlighted the words which PN seeks to introduce into the pleading by way of amendment.  Similar amendments are sought to be introduced in [68] and [70A].  I will not set out those paragraphs.

3. PN contends that the amendment does not raise a new issue in its case.  It points to what was said at the directions hearing on 14 December 2004 to the effect that it intends to rely on evidence as to the detriment which would arise if it is required to construct an alternative terminal.  PN has filed evidence of Messrs Lock, Brannock and Johnston.  They are experts whose evidence goes to the possible cost and delay of constructing an alternative terminal in 1994 and at the present time. 

4. QR opposes the amendments.  It contends that the cost of construction (and related delays) in 1994 cannot constitute a relevant detriment to PN because the gravamen of PN’s case is that QR resiled from the assumptions, included in [54], on 27 March 1997, three years after the date addressed in the experts' reports.

5. QR submits that it is only when the alleged representor wishes to disavow the assumption contained in a representation that an estoppel arises and the question of detriment only then falls to be considered; see Spencer Bower and Turner (1997) The Law Relating to Estoppel by Representation, Third Edition, Butterworths, London, p 110. 

6. It seems to me that this is probably correct and that the statement of principle referred to in the text is supported by the observations of Dixon J in Grundt v Great Boulder Pty Gold Mines Limited (1937) 59 CLR 641 at 674-675. However, for reasons set out below, I do not need to decide that question on the application.

7. Mr Kelly submitted that it is necessary to ask the question as to the point of time at which the party is alleged to have resiled from the assumptions.  He says that one then needs to point to detriment at that time, but it is possible to fashion relief based on the position at the present time.

8. Mr Leopold submits that the amendment and the proposed evidence of the experts goes to the broad detriment to which Mason CJ referred in the Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 415-416. He also relies upon what was said in Giumelli v Giumelli (1999) 196 CLR 101 at [27] and [34]-[48].

9. However, it seems to me that the short answer to the proposed amendments is that there is no evidence before me that PN proposes to acquire any land for an alternative terminal, nor is there any evidence that it has ever had such an intention.  PN’s lay evidence has closed and it has not sought to establish either that it did in the past or that it intends in the future to acquire an alternative terminal.  Mr Leopold conceded that PN does not have any present intention to acquire an alternative terminal.  He submitted that the proposed amendment and the supporting evidence go to the range of future possibilities that a well-advised corporation acting sensibly might adopt.  He relied for analogical support upon the decisions of High Court in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (“Sellars”) and Malec v J C Hutton Pty Limited (1990) 169 CLR 638 (“Malec”).

10. However, it seems to me that even if it is open to me to assess compensation upon the basis of the principles stated in Sellars and in Malec, it would at the very least be necessary for PN to provide some evidence of the degree of probability of the future event occurring.  Here there is no such evidence and, to the contrary, PN does not contend that it has an intention to build an alternative terminal.

11. The evidence of Mr Graham was that he had only a vague recollection of considering an unidentified alternative greenfields site in the late 1990s.  Moreover, the whole of PN’s evidence on this issue is that the board did not react to the letter of 27 March 1997 by looking to set up a different terminal. 

12. Nothing in the previously agreed Issue 52 of the "Real Issues in Dispute" bears on the question of whether leave ought to be granted.  Issue 52 was at the relevant time in the following terms:-

    “Would construction by the Applicant and commissioning of a replacement terminal take a substantial period of time and require substantial expenditure?”

13. It follows from what I have said today that QR should properly have objected to that issue as a real issue in dispute in the proceedings.  Nevertheless, the effect of what I have said today is that the proposed amendment is futile. 

14. Accordingly, nothing that was set forth in issue 52 can be availed of to support the amendment.  The same applies to what was said at the directions hearing on 14 December 1994. 

15. Accordingly, I refuse leave to amend the statement of claim to include those portions of [62(c)], [68] and [70A] which PN sought to introduce in its fourth further amended statement of claim.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Associate:

Date:               12 July 2005

Counsel for the Applicant:	Mr A Leopald
Solicitor for the Respondent:	Clayton Utz
Counsel for the Respondent:	Mr B O’Donnell QC with Mr L Kelly
Solicitor for the Respondent:	Allens Arthur Robinson
Date of Hearing:	8 July 2005
Date of Judgment:	8 July 2005