PH3 Property Group Pty Ltd v Otis Elevator Company Pty Ltd
[2008] WADC 12
•22 JANUARY 2008
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: PH3 PROPERTY GROUP PTY LTD -v- OTIS ELEVATOR COMPANY PTY LTD [2008] WADC 12
CORAM: PRINCIPAL REGISTRAR GETHING
HEARD: 22 JANUARY 2008
DELIVERED : Delivered Extemporaneously on 22 JANUARY 2008 typed from tape and edited by the Principle Registrar
FILE NO/S: CIV 1290 of 2004
BETWEEN: PH3 PROPERTY GROUP PTY LTD
Plaintiff
AND
OTIS ELEVATOR COMPANY PTY LTD
Defendant
Catchwords:
Practice and procedure - Pleadings - Application for leave to amend statement of claim - Impact on pending trial
Legislation:
Nil
Result:
Application allowed
Representation:
Counsel:
Plaintiff: Mr N D C Dillon
Defendant: Mr N J Landis
Solicitors:
Plaintiff: Wojtowicz Kelly Legal
Defendant: Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82
Celestino v Celestino, unreported; FCt FCA; No ACT G7 of 1990; 16 August 1990
Hutton v Meaton [2004] WASCA 178
State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1984) 13 WAR 335
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290
Youlden Enterprises Pty Ltd v Heath Solutions (WA) Pty Ltd (2006) 33 WAR 1
PRINCIPAL REGISTRAR GETHING: The application before me is an application by the plaintiff for leave to amend its statement of claim dated 15 January 2008. The amendments are contained in a minute dated 22 January 2008.
The amendments are sought in the context of an action by the plaintiff who is a property developer. The action concerns the construction of a multi‑storey apartment building in West Perth. The defendant is engaged in the business of supplying and installing passenger lifts in buildings. The dispute concerns the supply and installation of a lift by the defendant in the plaintiff's building.
This action is listed to proceed to trial on 29 January for four days. Consequently, one of the major issues in dispute between the parties is the question of whether or not the amendments sought would lead to particular prejudice to the defendant in its trial preparation.
It is convenient to group the amendments to the statement of claim into three broad categories. The first broad category deals with the terms relating to the timing of installation of the lift. The plaintiff asserts that there were two alternate time periods in which the lift was to be installed: the first one was within 100 days of the contract being signed; the second is within 10 weeks of the plaintiff giving the defendant a notice requiring installation of the lift to commence.
The second group of amendments relate to the damages claimed by the plaintiff. The third group of amendments is the insertion of par 23 into the statement of claim. Paragraph 23 is an alternate claim by the plaintiff based on the contract between the parties as pleaded by the defendant. In effect, what the plaintiff is doing is maintaining a claim for damages even if the contract is as asserted by the defendant (and not as asserted by the plaintiff).
In looking at these amendments, it is convenient to analyse them in three levels. The first level analysis is the pleadings issues. If the amendments would not survive the normal rules relating to the amendment of pleadings, then no issues arise in relation to prejudice to trial and the like.
Pleadings issues
There are three basic challenges to the proposed amendments from a pleadings perspective. The first is par 4.8 which reads:
"By reference to the defendant's tender documents sent to the plaintiff by facsimile transmission on 9 December 2002, a term that the defendant would provide maintenance for the lift for a period of 12 months after completion of the installation of the lift as set out in the provisions of clause 13 of page 6 of that facsimile."
The plaintiff initially contended that the clause I have just quoted was a term of the contract between them. The plaintiff seeks to delete par 4.8 on the basis that it does not plead a breach of the maintenance term pleaded and does not claim damages for that breach. The defendant objects on the basis that what the plaintiff seeks to do is to withdraw an admission.
The law in relation to the withdrawal of admissions is conveniently dealt with in the judgment of her Honour McLure J in Hutton v Meaton [2004] WASCA 178. In that case McLure J declined to follow a decision of the Full Court of the Federal Court in Celestino v Celestino, unreported; FCt FCA; No ACT G7 of 1990; 16 August 1990. In that case, and other cases, the courts have sought to put a set of rules around when a party can withdraw and admission in a pleading.
McLure J was of the view that, in light of the decision of the High Court in State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146, the general principle governing the amendment of pleadings – namely, the attainment of justice – should not be fettered by any particular rules.
In looking at the question of the interests of justice, in this case it is convenient to deal with them as a block at the end of these reasons. However, from a particular pleadings point there was no prejudice drawn to my attention on the defendant's part of this admission being allowed to be withdrawn. The defendant in its defence had denied par 4 of the statement of claim, including this term. That means that it was not open for the defendant to say that it relied on this term being admitted in its case preparation. On a pleadings perspective I do not consider that there is any valid objection to be taken to the proposed amendment withdrawing par 4.8.
The second pleadings challenge was taken to par 23. As I have indicated, in par 23 the plaintiff seeks to add a claim for damages based on a breach of the contract as pleaded by the defendant. The defendant was of the view that this paragraph ought properly to be included in a reply, to which it could file a rejoinder.
In submissions for the plaintiff, counsel was of the view that par 23 ought properly be in the statement of claim as it leads to a claim for damages, and that it is not appropriate to include a claim for damages in a reply. In my view par 23 is properly included in the statement of claim.
There is an issue going to prejudice, as to whether or not the defendant ought to be able to be given leave to amend its defence in order to plead a response to par 23. In my view this opportunity ought to be given, which is a factor to be taken into account in the overall balancing process.
The third broad issue in relation to pleadings is whether or not the statement of claim or the amendments ought to be supported by some additional particulars. In my view the proposed amendments to pars 5.2, 14.2, 16.9, 16.10 and 16.12, ought to be supported by particulars.
To summarise in relation to the pleadings issues, there are no pleadings objections that, in my view, could properly be taken to the proposed amendments, save that for a number of paragraphs further particulars ought to be provided before leave is given.
Approach of the Court to pleadings disputes
The second issue is one of the appropriate way in which the parties and the court should entertain challenges to pleadings. This is drawn from recent pronouncements by his Honour the Chief Justice. In the decision in Barclay Mowlem Construction Ltd v Dampier Port Authority (2006) 33 WAR 82, his Honour states the following at p 84:
In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre‑trial directions, to which I have referred, should result in the court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained."
His Honour the Chief Justice makes a similar comment in Youlden Enterprises Pty Ltd v Heath Solutions (WA) Pty Ltd (2006) 33 WAR 1 at [2] where his Honour states:
"In many cases, the time and expense involved in the consideration and resolution of the interlocutory dispute is entirely disproportionate to its significance to the just and effective resolution of the case as a whole by mediation or trial."
In my view the objections taken by the defendant properly drew a distinction between the pleadings issues and the prejudice issues. A pragmatic approach was taken in dealing with the technical pleadings points.
Balancing the risk of injustice
The final issue is the question of balancing the competing risks of injustice. In considering the exercise of the discretion to grant leave to amend on the verge of trial, it seems that four factors are relevant:
(a)the prejudice to the plaintiff if leave is not granted;
(b)the prejudice to the defendant if leave is granted;
(c)the prejudice to the public interest – for example, the vacation of trial dates at such a late stage that they cannot be allocated to other litigants; and
(d)the reasons for delay in making the application.
In support of these four grounds it is necessary only to refer to three cases, being Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1984) 13 WAR 335, 336, Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290 at 315, 316, and the State of Queensland v J L Holdings, to which I have earlier referred.
Dealing with these factors in turn, the first is the prejudice to the plaintiff if leave is not granted. The prejudice to the plaintiff is that it will not be able to present its case at its strongest. With the exception of par 23, the nature of the amendments sought are essentially in the nature of tidying up amendments. They clarify the case of the plaintiff and, from my understanding of the case, allow it to mirror more closely what the witnesses will be saying.
In relation to the first category of amendments to which I have earlier referred, they are probably of the sort that would have been allowed on the first day of a trial. In relation to the second category of amendments the prejudice to the plaintiff is that it would not be able to seek the additional $60,000‑odd worth of damages claimed as a result of the amendments. In relation to the third category of amendments the prejudice is that the plaintiff would not be able to claim damages if the court found that the contract was as pleaded by the defendant, as distinct from that pleaded by the plaintiff.
Turning then to the prejudice to the defendant if leave is granted, the essence of this prejudice is that the defendant would not have time to adequately respond to the claim in its amended form. In relation to the first category of amendments the additional work would, in my view, be minimal.
The contest between the parties as to what was the terms of the contract is clearly open on the existing pleaded case. However, having said that, the case management directions here contemplated that the parties would be filing witness statements. It would at least be necessary to allow the defendant the opportunity to add to its witness statements so that it could put the case as pleaded before the court. Aligned to that is the need to clarify a number of the amendments by additional particulars. There is an obvious timing issue as we are only three or four business days from trial, and that needs to be taken into account.
In relation to the second group of amendments, (those relating to damages) the defendant also asserted that it would need to consider whether or not it needed to obtain expert evidence in relation to the amendments. However, the amendments to pars 16.9 and 16.10 do not change the type of damages claimed. It was open to the defendant to have obtained expert evidence orders earlier in the piece in relation to these types of damages, and it chose not to do so.
If, having considered the pleadings, there is a need for additional expert evidence, nothing I am saying in these reasons should be taken as closing that or as precluding the defendant from bringing an application for leave to adduce further expert evidence. However, as I have indicated, there is a need for additional particulars and those particulars will take some time to analyse.
In relation to the new cause of action, the third group of amendments to par 23, the defendant would need the opportunity to amend its defence in order to deal with that.
In terms of the balancing exercise, perhaps a critical factor is that, on the court rosters available, the court is able to accommodate this trial commencing on 11 February 2008, due to other matters being vacated at a late stage. It seems to me that it is in the interests of justice that the plaintiff be allowed to amend its statement of claim in the manner sought, but also that the defendant be given a limited amount of additional time to respond to those amendments.
The nature of the orders I propose to make is an order allowing the amendments and an order vacating the trial due to commence on 29 January and scheduling it to commence on 11 February. I will hear counsel as to any consequential orders.
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