Serling Consulting (Australia) Pty Ltd v KH Properties (Australia) Pty Ltd - [2019] WADC 38

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   SERLING CONSULTING (AUSTRALIA) PTY LTD -v- KH PROPERTIES (AUSTRALIA) PTY LTD [2019] WADC 38
CORAM:   PRINCIPAL REGISTRAR MELVILLE
HEARD:   22 FEBRUARY 2019
DELIVERED          :   22 MARCH 2019
FILE NO/S:   CIV 1224 of 2015
BETWEEN:   SERLING CONSULTING (AUSTRALIA) PTY LTD
Plaintiff

AND

KH PROPERTIES (AUSTRALIA) PTY LTD
Defendant

Catchwords:

Application for further and better particulars - Application for orders the defendant plead to specified paragraphs of the statement of claim

Legislation:

Rules of the Supreme Court 1971 (WA), O 20 r 8, r 13, r 13(6), r 14(1), r 15

Result:

Application partly successful

Representation:

Counsel:

Plaintiff	:	Mr G Carter
Defendant	:	Ms E Oprandi

Solicitors:

Plaintiff	:	Lateral Legal
Defendant	:	James Chong Lawyers

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

EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78
Mick Skorpos Petrol Discount King Pty Ltd v The Shell Company of Australia Ltd (1997) ATPR 41-556
Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167

PRINCIPAL REGISTRAR MELVILLE:

The plaintiff commenced this action by writ of summons issued 13 April 2015. To date there has been two mediation conferences and orders relating to the filing and serving of lists of discoverable documents and the exchange of reports of expert witness. A number of these orders have been made by consent and there has been an exchange of particulars of damages.
Without more, one might be forgiven for thinking that by now each party knows the nature of the case being presented by the other.
Over the period of time this litigation has been running a number of amendments to the pleadings have been filed, the last of which was a substituted statement of claim filed on the 21 December 2017 and a substituted defence to the substituted statement of claim filed 12 January 2018.
This matter meandered on with neither party apparently having complied with orders relating to the filing of expert evidence. The matter came before the court for a directions hearing on the 25 January 2019 at which time an explanation was proffered to the court that there had been non‑compliance with the earlier orders because of difficulties the plaintiff had understanding the nature of the defence and the counterclaim. The plaintiff contended that defence should be amended to properly plead a defence to several paragraphs of the statement of claim. Accordingly, since the defendant was not going to do anything, and to bring this issue to a head, the plaintiff was ordered to file and serve within seven days an application for further and better particulars and for orders that the defendant amend the substituted defence. That application has now been made.

The plaintiff's case

The plaintiff's case is that it was the developer of Lot 71 and Lot 567 Arthur Street, Dayton Western Australia. These Lots are described in the statement of claim as 'the properties'.
The plaintiff alleges that between mid-2013 to 28 October 2013 there were negotiations between the plaintiff and the defendant's authorised agent Mr Law regarding the plaintiff being retained to perform civil engineering services at the properties. It is alleged that at these meetings Mr Law was given a copy of the plaintiff's standard terms of trade and informed that the civil engineering works would be governed by the standard terms.
I interpolate here to observe that throughout the course of the statement of claim the expressions 'civil engineering services' and 'civil engineering works' appear to be used interchangeably and that there appears to be no practical distinction between the two.
The plaintiff goes onto allege that between the 25 and 28 October 2013 it emailed to Mr Law formal proposals for the engineering works to take place at the properties and that on or about the 25 October 2013 Mr Law on behalf of the defendant accepted the proposals and thereby the parties entered into a contract or alternatively two contracts (one for Lot 71 and one for Lot 567). It is pleaded that the acceptance was partly oral, partly in writing and partly by conduct and that the contract had implied terms being several clauses of sch 1 of the Construction Contracts Act2004 including the entitlement to claim progress payments. The plaintiff pleads that it provided the civil engineering services and also engineering drawings.
The plaintiff then says between 1 January 2014 and 31 December 2014 there was a further agreement that the plaintiff would perform additional work outside the scope of the original works under the contract.
In breach of the contract and the further agreement the defendant failed to pay the plaintiff for the engineering services set out in invoices rendered in respect of Lot 567 and Lot 71. Alternatively, the plaintiff says the defendant has been unjustly enriched and is liable to pay a reasonable amount for the services rendered.
The plaintiff further alleges the defendant unilaterally terminated the contract on or about the 17 December 2014 and seeks damages for loss of profit.

The defendant's case

In response to the statement of claim the defendant pleads firstly it was the proprietor in equity of Lot 567 Arthur Street, Dayton. It does not traverse the allegations contained within par 2 of the statement of claim either by way of a statement of non‑admission or denial.
The defendant denies the relationship between the parties was governed by the contract or contracts alleged by the plaintiff and says that the relationship was governed by a written contract entered into in or about August 2013, the terms of which are set out in a letter dated 30 July 2013 (I will refer to this contract as 'the August contract'). The defendant does not plead the material terms of the contract beyond that but contents itself saying the letter will be referred to at trial for its full terms and affects.
At par 18 the defendant again denies there was the contract or contracts alleged by the plaintiff and says further that if the plaintiff did render civil engineering services to the defendant, it did so pursuant to the August contract.
The defendant says that it was an implied term of the August contract that engineering work to be carried out by the plaintiff would be carried out in a reasonable time, which the defendant alleges was not more than six months, and that the plaintiff breached this implied term, the defendant thereby suffering loss and damage.
By way of counterclaim the defendant pleads it was the proprietor in equity of Lot 567 which it defines as 'the Land'. At pars 3 and 4 the defendant again pleads the August contract, and alleges that the plaintiff would provide professional services particularised as civil engineering services for Lot 567 to 'facilitate statutory approvals (herein after referred to as the 'requisite approvals') for the Land to be subdivided and sold. In breach of the implied term that the work would be done in a reasonable time, namely six months, the work was not done and so the defendant suffered loss and damage.
The defendant also pleads that by reason of the contractual obligations undertaken by the plaintiff the defendant was owed a duty of care which the plaintiff breached by the failure to carry out the work necessary to obtain the requisite approvals within the six months.
Finally, the defendant alleges the plaintiff represented that it had the capacity to do the work necessary to secure the requisite approvals within the reasonable time, and that this representation was false, misleading or deceptive in contravention of the Fair Trading Act 1987 and the Competition and Consumer Act 2010, again with the result that the defendant suffered loss and damage.

The application

By the Rules of the Supreme Court 1971 (RSC), O 20 r 13(6) it is provided that an order for the provision of further and better particulars shall not be made unless a written request for the particulars required by the applicant has been filed and served within 30 days of the service of the pleadings or such other time as the court may allow.
I have no evidence of when the substituted defence was served but there is no doubt that the request for further and better particulars was not filed within the 30 days thereof as required by the rules.
It is submitted on behalf of the defendant that the delay was caused by the plaintiff's former solicitors. An affidavit in support of the application was sworn by the plaintiff's current solicitor. He deposes that he was instructed to act for the plaintiff and became the solicitor or record in these proceedings for the plaintiff on 15 August 2018.
The plaintiff's current solicitor deposes that where facts are not within his personal knowledge he has stated the sources from which the information was obtained and that he believes the facts to be true. He does not say why he believes them to be true. At par 6 of his affidavit he states he is 'instructed' as to six discreet matters relating to the plaintiff's state of mind, what information was not given to the plaintiff by its former solicitors and what instructions the plaintiff did not give to its former solicitors, but does not say who instructed him or why he believes these instructions to be true.
It appears he can say nothing of his own knowledge as to the events between 12 January 2018 when the substituted defence was filed and until around the time he took instructions. Evidence as to the plaintiff's knowledge of its obligations and its state of mind between the 12 January 2018 and 15 August 2018 would be much better coming from the plaintiff or an officer of the plaintiff such as the director who swore the affidavit verifying the plaintiff's list of discoverable documents. As it is, the person who would be considered to know what actually happened has not given evidence of what actually happened and the person who doesn't seem to know what happened has.
In considering whether the time for making a written request for particulars should be extended, regard should be given to the explanation for the delay and the merits of the application.
In Murchison Zinc Co Pty Ltd v Thiess Contractors Pty Ltd [2000] WASCA 167 [38] the Full Court said:

It is important to bear in mind the basic function of pleadings. This was described by Isaacs and Rich JJ in Gould v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490 at 517 (in a passage quoted with approval by Dawson J in Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293) in the following way:
'Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.'

In EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2010] WASCA 78 [124] the Court of Appeal said:
Pleadings have two functions. First, to ensure a fair trial by putting the other party on notice of the case to be met. Secondly, to define the issues for decision so that the court can control the preparation of the case and the conduct of the trial. See Williams v Australian Telecommunications Commission (1988) 52 SASR 215, where King CJ said:
'The fundamental purpose of pleadings is to provide a structure or framework for the litigation designed to promote a just outcome. Pleadings achieve this purpose by performing two basic functions. The first is to define the issues between the parties thereby providing the basis for the determination of questions as to discovery before trial and admissibility of evidence at trial and of questions as to what the litigation has decided for the purpose of the Rules as to res judicata and issue estoppel. The second function is to give to the parties fair notice of the case to be made against them at trial thereby minimising the risk of injustice resulting from surprise (216).'
See also Mick Skorpos Petrol Discount King Pty Ltd v The Shell Company of Australia Ltd (1997) ATPR 41-556, 43,693 - 43,694 (Mansfield J).
Against that background I now turn to consider the merits of the plaintiff's application. The gravamen of the plaintiff's request for further and better particulars of the substituted defence is a concern that it does not know:
(a)the material express terms of the contract the defendant alleges was entered into for the provision of engineering services in respect of Lot 567;
(b)what 'engineering services' the defendant alleges were to be provided by the contract;
(c)what the defendant means by 'engineering work';
(d)what the defendant means by 'professional services' and what statutory approvals or requisite approvals needed to be obtained or what work was necessary to be done to secure the 'requisite approvals';
(e)the contractual obligations which gave rise to the alleged duty of care as pleaded in par 9 of the substituted counterclaim; and
(f)the representation pleaded in par 12 of the substituted counterclaim.
It is the case that the defendant has pleaded a different contract to the one pleaded by the plaintiff. The purported particulars of the work that was to be done under the contract pleaded by the defendant shed no light on the question of what engineering work, engineering services or professional services work was to be done in order to secure the 'requisite approvals' or what the 'requisite approvals' were. The particulars are 'The contract was constituted by a letter dated 30 July 2013 from the plaintiff to the first defendant. The said letter will be referred to at trial for its full terms and effects'.
To this extent it can be said the pleading incorporates a document that is to be found elsewhere. However the nature of the case is not apparent on the face of the pleading. At RSC O 20 r 8(2) it is stated:
Without prejudice to sub-rule(1) the effect of any document or the purport of any conversation referred to in the pleading must, if material, be briefly stated and the precise words of the document or the conversation shall not be stated, except insofar as those words are themselves material.
Neither party has provided the court with a copy of the letter and it is not otherwise possible to discern the nature of the case from the pleadings. It is my view that to properly plead this allegation it is necessary for the defendant provide in the pleadings a brief statement of the words of the document that are material, notwithstanding the letter has, presumably, been discovered and inspected.
With respect to the request for particulars of the contractual obligations which gave rise to the alleged duty of care as pleaded in par 9 of the substituted counterclaim, in my view the defendant has sufficiently identified the contractual obligations giving rise to the alleged duty of care. The contractual obligations are pleaded out at par 10, namely the obligation to carry out the work necessary to obtain the requisite approvals within six months of the contract. This was pleaded in the first iteration of the defence and counterclaim filed 3 July 2015. This is sufficient for the plaintiff to understand the nature of the counterclaim insofar as it alleges a breach of a duty of care, particularly after two mediation conferences.
As to the request for particulars of the representation pleaded in par 12 of the substituted counterclaim, it is to be observed that the representation pleaded was that the plaintiff would have the capacity to do the work necessary to be done to secure the requisite approvals within a reasonable time that have been previously been pleaded to be six months.
The RSC O 20 r 13 requires every pleading to contain the necessary particulars of any defence or claim including particulars of any misrepresentation. As qualified by O 20 r 8(2) it is not necessary to plead the precise words expect insofar as those words are themselves materials.
Whilst on the face of that pleading the question, what were the 'requisite approvals' comes to mind, once again it is to be observed that this pleading has existed in this form since the first iteration of the defence and counterclaim filed the 3 July 2015. The plaintiff has done nothing to persuade me that it does not appreciate the nature of the case it must face and what it needs to do to defend itself on a pleading which has stood for some 3 1/2 years, after discovery, two mediation conferences and requests for orders in respect of expert evidence.
Finally, the plaintiff seeks an order that:
(a)the defendant be required to plead a defence in relation to pars 2 and 11 of the substituted statement of claim insofar as those paragraphs refer to Lot 71 Arthur Street, Dayton (Lot 71); or
(b)plead the case the plaintiff is required to meet in relation to Lot 1.
At par 2 of the substituted statement of claim it is alleged that the plaintiff was at all material times the developer of land located at Lot 71 and Lot 567 Arthur Street, Dayton Western Australia.
The defendant does not traverse those allegations although it alleges it was the proprietor in equity of Lot 567 and sought to develop Lot 567.
By RSC O 20 r 14(1), any allegation of fact made in a pleading is deemed to be admitted unless traversed or unless there is an implied joinder of issue pursuant to r 15. A fact is traversed by a statement of non‑admission or a statement it is denied. Accordingly, the facts pleaded in par 2 of the defence, not having been traversed, are admitted. Given they are admitted it is nonsensical to seek an order that the defendant deny them.
As to par 11 of the substituted statement of claim, the plaintiff alleges that there was a contract, or alternatively two contracts (one for Lot 71 and one for Lot 567) entered into on or about the 25 October 2013. In this regard the defendant clearly and unequivocally denies that allegation and so the onus remains on the plaintiff to prove it at trial. However, the defendant goes further and says that there is a contract entered into between the parties in about August 2013 in respect of Lot 567. The August contract forms the basis of the defendant's counterclaim and the onus will be on the defendant to prove that at trial unless the plaintiff admits that material fact. In my opinion the defendant is not required to do any more than it has.
The explanation for the delay in applying for an order for further and better particulars was not satisfactory, particularly in light of the unpersuasive nature of the affidavit, the fact that the parties have been to mediation twice, and orders by consent for the filing and serving of affidavits of discovery and for the filing and serving of expert evidence have been made. On the other hand the pleading of 'engineering work', 'engineering services', 'professional services', 'necessary work to get requisite approvals' and the 'requisite approvals' are in some respect very broad and there appears to be a risk of the plaintiff being taken by surprise at trial with the consequent risk of adjournment and further delay and expense unless some further and better particulars are provided. On balance it is my view the defendant should provide the particulars requested at pars 2(a) ‑ 2(j) of the plaintiff's summons. Providing those particulars will also resolve any uncertainties as to what is pleaded at pars 9 and 12 of the substituted statement of claim.

Accordingly the plaintiff should be given an extension of time to file and serve the request of further and better particulars.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
AC
Court Officer
22 MARCH 2019