Permanent Trustee Company Ltd v Gulf Import and Export Company (No 2)

[2006] VSC 127

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION
PRACTICE COURT

No. 8130 of 2002

PERMANENT TRUSTEE COMPANY LTD
(ACN 000 000 993)
(As trustee under the Security Trust Deed and New South Wales Security Trust Deed each dated 25 January 1996)

Plaintiff

v

GULF IMPORT AND EXPORT COMPANY

EMIRATES TRADING AGENCY LLC

First Defendant

Second Defendant

---

JUDGE:	HARPER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	27 & 30 MARCH 2006
DATE OF JUDGMENT:	30 MARCH 2006
CASE MAY BE CITED AS:	PERMANENT TRUSTEE CO LTD V GULF IMPORT AND EXPORT CO. & ANOR (No. 2)
MEDIUM NEUTRAL CITATION:	[2006] VSC 127

---

PRACTICE AND PROCEDURE – Appeal from a Master – Successive notices to admit, covering the same ground – Service within time of a notice of dispute in relation to the first notice to admit, but a failure so to respond to the second – Whether defendants should have leave to withdraw deemed admissions –Amended defence filed between service of the notices to admit – Effect of the amendments on the efficacy of the second notice to admit.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Jopling QC with Mr J. Styring	Minter Ellison
For the Defendants	Mr R. Garrett QC with Mr T. Thomas	Aitken Walker & Strachan

HIS HONOUR:

1. Following my judgment of 24 March 2006, the plaintiff sought a further hearing to enable it to put submissions to me about the status of the notice to admit which it served upon the defendants following its issue on 11 January this year.  The plaintiff sought this further hearing because I had said, in my judgment, that the plaintiff should not benefit from the defendants' failure to serve, within time, a notice of dispute in relation to that notice to admit if - and to the extent that - the latter covered the same ground as notices to admit, dated 1 October 2004, which the plaintiff had earlier served upon the defendants and to which the defendants had earlier responded in accordance with the rules. 

1. Following submissions from both the plaintiff and the defendants, it seems to me that the principles enunciated by me last week logically lead to a number of conclusions. 

1. The first of these conclusions is that a litigant may permissibly take tactical advantage of the rules by doing or omitting to do that which the rules themselves permit.  The Court is not concerned to inquire whether or not something that a party is permitted to do is done with a particular motive.  It is trite law to say, for example, that a recognised cause of action which is properly pleaded cannot be defeated merely because the party whose pleading it is has an impure motive for instigating the proceeding. 

1. By like reasoning, a notice of dispute which the rules provide may be issued and served cannot be attacked simply on the basis that the relevant facts or documents are not really in contention and that, accordingly, the party serving the notice of dispute wishes thereby to obtain a mere tactical advantage.  The consequences which in those circumstances are to be visited upon the disputing party are set out in the rules.  They do not involve setting the notice of dispute aside.  Rather, the rules provide for a penalty in costs.  In other words, they provide that the disputing party will suffer in costs at the end of the trial if the other party is put to expense in proving facts which ought to have been admitted but which, by reason of the service of a notice of dispute, were not.

1. If, however, a party by inadvertence or otherwise misses an opportunity to seize a tactical advantage, then the Court looks in a very different light at an application to regain that opportunity.  Were the result of an application of this kind, if successful, to be the negation of one of the purposes of a particular rule of the court, then the application should, at least in general, be refused.  Thus, leave to withdraw a deemed admission should not be granted where that admission goes to facts or documents not in dispute; and where, therefore, the only reason why the deemed admission is sought to be withdrawn is to preserve a tactical advantage.

1. In the circumstances which obtain in this case, it seemed to me last week – and it seems to me now – that I ought not to allow the defendants leave to withdraw their notice of dispute.  Here, the only reason to grant such leave is to enable the defendants to preserve a tactical advantage.  If, however, the defendants obtain the leave they seek, they would be placed by the Court in the very position that the rules are designed to avoid.  They would be enabled to create a dispute where no dispute exists.  They would, in other words, be in a position to require a party unnecessarily to prove that which is not in dispute.

1. As I understand the position, there is no dispute about the authenticity of the documents that have been the subject of debate over these several sessions.  If, therefore, I were to allow the defendants to withdraw a deemed admission in respect of those documents, then the defendants would illegitimately regain through the back door that which they lost, albeit by inadvertence, when they omitted to file and serve their notice to admit of 11 January this year.

1. I addressed in my judgment of 24 March something which had occurred to me only as I was preparing that judgment.  It is not necessarily counsel's fault, but as the argument proceeded last week, I did not turn my mind to a consideration which, as I prepared my judgment, struck me as being relevant.  It is obvious, it seems to me, that a party who (in the absence of any relevant change in the circumstances) serves a notice to admit which is responded to appropriately and within time by a notice of dispute, cannot by serving a fresh notice to admit covering the same territory, either as to facts or documents, place the other party at jeopardy of a deemed admission should the other party fail by inadvertence or otherwise to respond in time.  Again, that still seems to me to be good as a general proposition.

1. Since I handed down my judgment last week, I have had the benefit of the able argument of both parties in relation to the second proposition which I enunciated in my judgment.  I am, as a result of that argument, and the discussion which has surrounded it, satisfied that in the circumstances of this case the plaintiff was entitled to serve, as the plaintiff did on 11 January this year, a fresh notice to admit.  It was so entitled because the circumstances had changed since the first notice of dispute had been filed and served.  Since then, the defendants have amended their defence.  The amended defence, together with the counterclaim, appeared as a matter of pleading to accept the authenticity of the documents – and perhaps also the facts – which had been the subject of the original notice to admit;  and accordingly, also of the original notice of dispute. 

1. On a reasonable reading of the fresh pleading, it appeared, as it seems to me, to contradict the notice of dispute which had earlier been filed and served.  A new circumstance had thus arisen;  and it was that new circumstance which, I think, justified the service of a fresh notice to admit.  To the extent that that notice to admit sought admissions about facts which were not the subject of the earlier notice to admit, of course the justification for its service is plain;  and to the extent that it sought admissions the subject of the earlier notice of dispute where admissions were by implication contained in the amended defence, again the justification for its service is made out.  Otherwise, however, it is not open to serve a notice to admit facts or documents previously the subject of a notice of dispute.

1. The task now is to compare the notices to admit of 2004 with that of 2006.  To the extent that the notices differ, the latter is good.  To the extent that they cover the same ground, the latter is good only to the extent that the earlier notice of dispute has been expressly or by implication negatived by the amended defence and counterclaim as it is currently pleaded.  I will not allow the defendants, by further amending that amended pleading, to avoid the consequences of their failure to respond, in accordance with the rules, to the notice to admit issued and served in January this year.

---