Pulcesia Pty Ltd v CGU Insurance Ltd
[2011] VCC 1318
•3 November 2011 (Revised 4 November 2011)
| IN THE COUNTY COURT OF VICTORIA | Revised |
(Not) Restricted
AT MELBOURNE
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-09-04744
| PULCESIA PTY LTD | Plaintiff |
| v. | |
| SIMON LOTTER as representative of the members of | Defendant |
| Lloyds Syndicate no. 2468 |
---
| JUDGE: | His Honour Judge Anderson |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 3 November 2011 |
| DATE OF JUDGMENT: | 3 November 2011 (Revised 4 November 2011) |
| CASE MAY BE CITED AS: | Pulcesia Pty Ltd v CGU Insurance Ltd & Anor |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1318 |
REASONS FOR JUDGMENT
---
Catchwords: | Practice and procedure – Amendment of pleadings – At trial, the defendant applied to amend the defence – Plaintiff indicated that it would not seek relief to which the proposed defence pleaded – No explanation for late amendment – Amendment not particularised – If amendment allowed, trial would need to be vacated and extensive further discovery and expert reports would be required. |
---
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D. Aghion | Rigby Cooke |
| For the Defendant | Mr P. Duggan | McCabe Terrill |
| HIS HONOUR: |
1 At the commencement of the trial this morning, defendant’s counsel, Mr Duggan, applied to amend the defence in accordance with a proposed pleading dated November 2011. The proposed pleading seeks to raise three additional matters:
a. the operation of the Insurance Contracts Act in relation to the defendant, although it was conceded that this matter had little practical effect; b. issues relating to the quantification of the plaintiff’s damages; c. an allegation of contributory negligence against the plaintiff. 2 The plaintiff opposes the application to amend in relation to the second point concerning the quantification of damages but restricts its objection to paragraphs (c) and (d) of the paragraph raising the amended pleading in that regard. In order to put the proposed amendment and the plaintiff’s objection in context, it is necessary to refer to the nature of the claim.
3 The plaintiff’s claim was made by writ dated 5 October 2009. The present defendant was substituted by order of His Honour Judge Ginnane, made 31 March 2011. The plaintiff in about September 2003 entered into a contract for the sale of the property it owned at
Rosebud. It had engaged a conveyancer in relation to the transaction. The conveyancer, L. J. Clarkson & Co. Pty Ltd, carried professional indemnity insurance. It is alleged that the relevant insurer at the time was the present defendant.
4 The plaintiff alleges that the conveyancer was negligent at two points in time:
a.
in about October 2003, when the plaintiff entered into the contract of sale, it alleges that it instructed the conveyancer it wanted a quick sale. Instead, the contract it executed upon the advice of the conveyancer was a non-standard form contract produced by the purchaser which was conditional upon the purchaser obtaining a planning permit to use the property for a particular purpose. The plaintiff says that, if properly advised by the conveyancer, it would not have entered into a contract in those terms;
b.
subsequently, the conveyancer advised the plaintiff in January 2004 to send a notice of recession of the contract to the purchaser on the basis that the purchaser had not lodged an application for a planning permit within 60 days of the contract. The
conveyancer later advised the plaintiff to withdraw the rescission notice and to enter into a further agreement with the purchaser. Subsequently, the purchaser sought to settle the transaction, although this was not achieved. The matter became the subject
of a proceeding in the Supreme Court of Victoria which was ultimately decided by v Pulcesia Pty Ltd (2005) 13 VR 168.
5 The conveyancer was notified by the plaintiff’s present solicitors in February 2005 of facts which might give rise to a claim by the plaintiff against the conveyancer. No claim was apparently made by the conveyancer against its professional indemnify insurer before the conveyancer was deregistered as a corporation in August 2007. The plaintiff has brought the present proceeding against the insurer, claiming that it is entitled to do so because of the operation of sections 40 and 54 of the Insurance Contracts Act. That is a matter for decision in the proceeding.
6 The plaintiff has claimed damages in the proceeding which include:
a. the legal fees of the Supreme Court trial, less the costs recovered; b. the agent’s commission on the sale of the Rosebud property; c. “loss of use of money calculated as $660,000 from 31/01/04, being likely date of settlement of unconditional sale to 31/01/06 being likely date of settlement on
unconditional sale after delivery of judgment by Dodds-Streeton J, interest rate of 7%applied, $92,400”;
d. The forfeited deposit was to be deducted together with interest thereon. 7 The proposed amended defence alleges in the contentious paragraphs as follows:
“(c) The loss of use of money particularised by the plaintiff at paragraph 22 of the Further
Amended Statement of Claim dated 1 April 2011 fails to account for –(i) The Plaintiff’s retention of the property since 31 January 2004;
(ii) Income derived by the Plaintiff from the property since 31 January 2004 which income would not have been derived but for the transaction(s) of which the Plaintiff now complains;
(iii) Capital appreciation of the property attributable to general market fluctuations since 31 January 2004 which capital appreciation would not have been derived but for the transaction(s) of which the Plaintiff now complains; and
(iv) Capital appreciation of the property since 31 January 2004 attributable specifically to Aussie Invest’s acquisition of a planning permit for the property and the benefit of which accrued to the Plaintiff as a windfall by reason of the transaction(s) of which the Plaintiff now complains.
(d) By reason of the matters pleaded in the preceding sub-paragraphs any loss and damage ostensibly suffered by the Plaintiff as a consequence of the transactions(s) about which it now complains have been extinguished and exceeded by the benefits the Plaintiff has enjoyed attributable to those same transactions”.
8 Plaintiff’s counsel, Mr Aghion, informed the Court that the plaintiff would not proceed with it’s claim for loss of use of money amounting to $92,400. In the circumstances, it would seem that the proposed amended defence as presently pleaded would have no application because paragraph 22.1(c), specifically relates the pleading to the loss of use of money claim made by the plaintiff. Mr Duggan, however, has submitted that despite the proposed pleading, the allegation of a betterment to the plaintiff would have wider application. Income received from the retained property or capital appreciation of the property, particularly any appreciation arising from the obtaining of the planning permit by the purchaser in 2003, were benefits which the plaintiff must take into account in the calculation of any damages it has sought as a result of the breach of contract or negligence of the conveyancer.
| 9 |
It was conceded by Mr Aghion that the issue of whether benefits obtained by the plaintiff might that in the circumstances, it would have little chance of success. Ordinarily, therefore, if this issue had been raised in a timely matter the defendant would have been permitted to make the amendment and for the issue to be determined at trial.
10 I am not, however, persuaded in the present case that this is the appropriate course. The defendant was joined in the proceeding in March 2011. The amended writ and statement of claim, dated 1 April 2011, was served on the defendant shortly after that date. The defendant filed its present defence on 11 May 2011. On 9 May, the proceeding was set down for trial commencing today and until notice was given yesterday of the proposed amended defence, there was no indication that the trial was not to proceed on anything other than the matters articulated in the pleadings in April and May this year.
11 The proposed amended defence was served on the plaintiff’s solicitors by facsimile sent at 13.35 yesterday, 2 November 2011. The letter also sought discovery of documents relating to the valuation of the Rosebud property, including specifically, evidence given by Mr Anthony Bishop in the Supreme Court proceedings on behalf of the purchaser, in which he valued the Rosebud property as at March 2005 between $1.2-1.3 million. This was substantially more than the price of $690,000 paid by the purchaser in 2003. The difference was apparently due to the fact that the purchaser had obtained a planning permit to use the property for a particular purpose.
12 These are, however, not matters which are referred to in the proposed pleading. There is no affidavit in support of the present application to amend the defence which sets out the factual basis giving rise to the proposed amendment and there is no material explaining why notice of
the present application was not given before yesterday.
| 13 | entitled was always a matter where the plaintiff would need to prove its claim by evidence and |
Mr Duggan submitted that the assessment of any damages to which the plaintiff might be would be upon the defendant in relation to this issue and, until raised by a proper pleading, would not ordinarily have been addressed by the plaintiff in evidence, or by the Court in reaching a determination.
14 The amended writ in April this year referred specifically to the judgment of Dodds-Streeton J. On page 11 of her Honour’s judgment, there is reference to the evidence of Mr Bishop which, apparently, forms the basis of the proposed amended pleading by the defendant. While this is clearly the basis for the issue being raised in the proposed amendment (which fact is
confirmed by the letter sent by the defendant’s solicitors with the proposed amended defence),
the present pleading of the issue in the proposed amended defence is in far more general
terms.15 I consider that I should reject that aspect of the proposed amended defence for the following reasons:
a.
no explanation has been given as to why notice of the proposed pleading had not been given earlier;
b.
the basis upon which the pleading is made is not articulated with any particularity in the pleading itself and it is only by reference to the letter sent with the proposed pleading yesterday, and after hearing the submissions of defendant’s counsel, that it is possible to connect the raising of the issue with a passing reference by Dodds- Streeton J to valuation evidence given at the trial of the Supreme Court proceeding;
c.
the plaintiff has opposed this aspect of the amendment application. The trial of the proceeding has been fixed for many months and, if the trial were to be vacated, it is unlikely that it could be refixed before May 2012;
d.
the plaintiff says that if the amended pleading were permitted, it would open up very broad enquiries about the use of the plaintiff’s property since 2004, the capital appreciation of the property and the impact of the permit obtained by the purchaser in 2003. This would involve extensive further discovery and the need to engage expert witnesses to investigate matters including the valuation of the property on different bases at different times.
16 I consider, in the circumstances where the plaintiff has abandoned its claim for the loss of use of money and essentially has restricted its claim to the net costs of the Supreme Court proceeding and the agent’s commission paid by it less the forfeited deposit and interest on that sum, that more substantial prejudice would be suffered by the plaintiff if the trial were not to proceed on the present pleadings (and any amendments thereto which are not opposed) than if the trial were to be adjourned and it were necessary for the plaintiff to prepare to meet what are presently inadequately articulated issues relating to benefits which the plaintiff may or may not have obtained through the effluxion of time.
17 Whilst the defendant might have an argument that some benefits may have accrued to the plaintiff which should properly be taken account of in the calculation of the plaintiff’s loss and damage, that position is only arguable by giving credence to a passing reference to evidence by Dodds-Streeton J without any suggestion by the defendant that those matters have been investigated or whether there is any substances to the suggestion. In my view, it is too late in the day for the defendant to seek to raise these issues, particularly in the way it has without having properly investigated those matters and submitted the results of those investigations to scrutiny at the time of making the application.
18 For this reason, the defendant’s application to amend the defence will only be permitted in relation to the suggested amendments excluding paragraphs 22.1(c) and (d). The trial will proceed on that basis.
- - -
Certificate
I certify that these 6 pages are a true copy of the reasons for decision of His Honour Judge
Anderson delivered on 3 November 2011 and revised on 4 November 2011.
Dated: 4 November 2011
Hannah Christensen
Associate to His Honour Judge Anderson
0
1
0