Ruskin Nominees Pty Ltd v Avago Pty Ltd - [2007] WADC 62

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: RUSKIN NOMINEES PTY LTD -v- AVAGO PTY LTD [2007] WADC 62

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: 28 MARCH 2007

DELIVERED : 7 MAY 2007

FILE NO/S: CIV 670 of 2001

BETWEEN: RUSKIN NOMINEES PTY LTD
Plaintiff
AND
AVAGO PTY LTD
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application to amend defence and counterclaim - Turns on its facts

Legislation:

Trade Practices Act 1974

Result:

Application unsuccessful in part

Representation:

Counsel:

Plaintiff: Dr P R MacMillan
Defendant: Mr A O Karstaedt

Solicitors:

Plaintiff: S C Nigam & Co
Defendant: Lawton Gillon

Case(s) referred to in judgment(s):

Nil

DEPUTY REGISTRAR HARMAN: The plaintiff's claim was recently substantially amended. It is for the cost of "drilling and blasting services" supplied to the defendant under an agreement and a varied agreement. Those services are defined by the allegation that they were to be carried out in accordance with a drilling and blasting pattern provided by the defendant. Under the agreement the plaintiff was to provide the explosive and all accessories required in performing the services but under the variation the defendant would supply the explosive. The plaintiff pleads that services were provided under the agreement and the varied agreement and that it rendered an invoice to the defendant which has not been paid.
The defendant carries the onus of persuasion on its application to amend its defence and counterclaim. At the hearing of that application the plaintiff objected to parts of the proposed pleading.
The first objection is to the points at which by a process of implication the defendant would establish as a term of the agreement that the drilling and blasting services would produce rock in accordance with the defendant's requirements. At par 16 it would assert a singular requirement that the rock produced would not exceed "approximately 600 mm in diameter". At par 4.2 it pleads unspecified requirements.
In the particulars at par 4.2.2 part of the process by which the implication would be drawn is expressed so as to draw upon the past course of dealings between the parties. That course of dealings is identified in three parts of the pleading. The first at par 11 expresses that from time to time the defendant had requested the plaintiff to produce rock suitable for the defendant's rock crushers. The second, at par 13 is in the allegation that prior to the material time the plaintiff had carried out drilling and blasting work at the defendant's quarry and was aware of the defendant's requirements both in terms of drilling pattern and of the rock size to be produced. The particulars of that allegation being:
"The plaintiff carried out drilling and blasting operations at the Quarry in July 1997, December 1997, three times in May 1998 and in July 1998, producing rock suitable for the defendant's rock crushers which did not exceed approximately 600 millimetres in diameter subject only to a small margin of not more than 5% of the rock exceeding this approximate size."
The history expressed in the particulars and the results produced are not expressed to relate to the requests at par 11. If it is intended by the pleader that there be a relationship it is not drawn with any certainty from the context in which par 13 is pleaded as the intervening paragraph would disrupt any contended flow. Be that as it may; if there is a relationship it may be no more than that the results met the defendant's expectations which had been founded upon the requests. It is for the defendant to plead that the plaintiff was aware that its requirements amounted to more than a request.
An issue that emerges from the same material that calls for comment is that even if some such clarity were provided, the defendant has not dealt with what would appear to be a connection between drilling pattern and product. That connection is implicit at the particulars of par 13 where I take it to be the case that the defendant expresses that each of the requirements had been met. Presumably those requirements are the unspecified requirements for the purposes of par 4.2. In the case of the blasting events expressed at par 13 it is not evident that the drilling pattern had been determined by the defendant as was the case in the agreement the subject of the defendant's pleading.
Before I canvass the third ground of support for par 4.2 I will record my observations to this point. The defendant does not specify the requirements that it pleads in par 4.2 but provides scope for them to be drawn from what is pleaded as a request and what may be a related pleading of past satisfactory results. They may have been achieved as the result of the plaintiff's expertise, the defendant's drilling pattern or simply coincidence. In my opinion to the extent that the allegation that the term be implied depends on par 4.2.2 the plaintiff is entitled to a clearer pleading. The proposed amendments to par 5 (now 11) are significant as thereby the defendant's operational task is sought to be translated into requests made to the plaintiff. I understand that the purpose of the proposed amendment to par 5 is to support the course of dealings and accordingly they would fall along with par 4.2.2. As to the proposed particulars to par 13 in my opinion it is appropriate that the defendant clarifies whether they speak to one or both of the pleaded requirements.
The last support for par 4.2.2 is provided by the particulars of par 16, as follows:
"Insofar as the term was implied, the plaintiff was aware, by reason of the previous course of dealings involving drilling and blasting at the Quarry, of the Defendant's requirement to produce rock not larger than approximately 600 mm in diameter which could be crushed in the Defendant's crushers. Further, Mr Mauchline on behalf of the Defendant confirmed with and pointed out to Mr Hart at the Quarry in August 1999 the size of rock required, namely rock not exceeding approximately 600 mm in diameter, and showed to Mr Hart such rock in the Defendant's pit from previous blasting that was going into the crushing plant. The defendant further repeats the particulars in paragraph 4.2.1."
The first part of those particulars simply reproduces part of the proposed pleading at par 4.2. The second part clearly relates to the circumstances that were unfolding at the time of the agreement and could not be constituted as part of a prior course of dealing.
The defendant conceded that par 4.2. It justified the repetition on the basis that it was permissible to do so provided that there would be no embarrassment. The significant consideration is the context in which the concession is made. It is not one in which the plaintiff carries the onus but rather one in which the issue is whether the court could be persuaded that it is appropriate to give leave to the defendant to plead the same allegation twice or arguably, slightly different allegations to the same end. It is unlikely that the court would be so moved simply because the applicant considered that to do so would not be embarrassing.
The next objection raised by the plaintiff relates to the proposed denial of the plaintiff's allegation of the variation. It is confusing as the term "blasting contract" by which it is expressed has not been utilised by the plaintiff yet is portrayed by the defendant as admitted. Similarly the defendant proposes to admit that it agreed to provide the explosive for "the production blast of the quarry face". The plaintiff's pleading does not distinguish overburden and production blasting. It is not open to a party filing a responsive pleading to admit allegations that have not been made.
On a broader analysis, at par 3 the defendant proposes to plead that the parties had agreed that the plaintiff would carry out a production blast yet absent the agreement expressed at par 7 of the defence, the agreement expressed at par 3 would have been for something less. I accept that it may have been the defendant's intention that par 3 and par 7 pleaded a comprehensive agreement however I would observe that it has gone to some considerable trouble to redefine the context in which the plaintiff's case would be considered and that at each of par 3 and par 7 it has chosen not to specify the same dates. In my opinion the proposed pleading has provided a mechanism for the defendant to avoid dealing with a significant issue that emerges on its pleading.
A similar analysis applies to par 8.2 of the proposed defence.
At par 8.4 the defendant proposes to deny that it caused its contractor to pump explosive into the blast holes. It goes on to allege that it was the plaintiff's responsibility to cause the explosive to be pumped into the blast holes. The plaintiff contends that if the defendant is to assert that it was the plaintiff's responsibility to cause the defendant's contractor to undertake that work, then it is entitled to a pleading of the basis for that contention.
A similar analysis applies to the proposed allegation at par 8.5.
At par 14 the defendant seeks to assert that at all material times the plaintiff held itself out to have expertise in drilling and blasting at quarries. The plaintiff contended that the pleading has no relevance to the defences pleaded or the claims raised by the counterclaim. I would add that it does not have any bearing upon the plaintiff's claim.
At what is now par 17 of the proposed pleading the defendant had pleaded a case that it was an implied term of the contract that the drilling and blasting would be carried out in accordance with industry standards so as to produce rock suitable for crushing. It now seeks to interpose the qualification that such drilling and blasting would produce satisfactory results.
At par 17(a) the defendant proposes to add to the existing particular in support of the implication of the term that the drilling and blasting would be carried out in accordance with industry standards so as to produce rock suitable for crushing, that the plaintiff held itself out as having expertise in quarry drilling and blasting. Although presented as part of an extant particular, it does not relate to that particular other than to the extent that it may satisfy the test for implication of a term that it expresses. It does not specify the broad scope of the allegation of material fact to which it relates.
At par 17(b) the defendant seeks to incorporate the particulars of par 13. As I have recorded they fail to canvass the significance of a drilling pattern in the context of there being an expectation of the dimensions of the product. In my opinion the particulars are just as meaningless at the point of par 17 for the purpose of determining the industry standard as they are for the purpose pleaded at par 13.
At par 17 the defendant would seek to draw upon those particulars to support the implication of a term that the drilling and blasting would be carried out in accordance with industry standards so as to produce rock which would be described as satisfactory or suitable for crushing. At par 18 the defendant seeks to plead breach of that term however the datum by which the breach is expressed is not a standard that would appeal as a reference to what would either be a satisfactory result or product suitable for crushing but rather to the defendant's requirements. I accept that in making that assessment I have read the specification of product dimensions as being a reference to the defendant's requirement but I would indicate that is what the pleading suggests. Otherwise it would be helpful to be able to appreciate whether the industry to which the defendant refers is one in which rock would be produced at or about the particular size or whether it would accommodate the production of rock of different sizes. The proposed addition to par 17(a) would tend to identify the plaintiff's industry for the purposes of par 17 yet the breach pleaded at par 18 appeals more as a reference to the defendant's.
The next issue raised by the plaintiff relates to par 20.6 where the defendant would contend that the plaintiff failed to ensure that the explosive in the blast holes had gassed correctly prior to the holes being stemmed. It is pleaded in the context of an allegation of breach of an implied term expressed at par 19 that the plaintiff would carry out the work in a proper and workmanlike manner with due care and skill and that any materials supplied in connection therewith would be reasonably fit for the purpose for which they were supplied. The plaintiff's contention is that in light of what is common ground ‑ that the defendant provided the explosive ‑ the pleading fails to establish a case on the basis that that the plaintiff had an obligation to so ensure.
At par 21 and par 22 the defendants seek to rely upon the Trade Practices Act 1974 to establish warranties which at par 20.1 to par 20.9 it would cast as having been breached. The defendant alleges warranties that the services and the materials supplied would be reasonably fit for purpose alternatively for the particular purpose of producing rock for granite aggregate and/or of such a nature and quality that they might reasonably have been expected to achieve that result. The plaintiff contends that thereby the defendant seeks to present new causes of action clearly the subject of limitation. The content of par 20 to par 22 inclusive is all new material. Insofar as the leave sought to amend is leave for the purposes of O 21 r5(5), the only resonances that the breaches pleaded at par 20 and the allegations at par 21 and par 22 have is with the allegations expressed at par 19, which is also new material. The application does not come within the scope of the sub‑rule.
At par 23 the defendants propose to amend the pleading of a duty of care expressed as being to carry out the services "safely and in accordance with accepted drilling industry standards so as to produce … rock suitable for crushing" to include the terms "in a proper manner" and "satisfactory results". In my opinion it is undesirable at this stage of the litigation to allow for amendment which would require the plaintiff to seek particulars. It is appropriate to consider that at this point in the litigation the defendant would be providing a fully particularised proposed pleading. I would observe that at that point the allegation is no more than that the product would be suitable for crushing without limitation by reference to the defendant's requirements or equipment.
At par 25.2 in support of the claim in negligence the defendant refers to the plaintiff's failure to "meet minimum acceptable standards" and at par 25.4 to the need to undertake "remedial blasting". I make the same observation as I made in relation to the similar content of par 23.
At each of the points that I have canvassed I accept that the plaintiff has valid concerns and in my opinion the defendant has not met the onus.