Shansli Pty Ltd v Original Pizza Company Pty Ltd

[2010] VCC 13

IN THE COUNTY COURT OF VICTORIA (Un) Revised

(Not) Restricted

AT MELBOURNE
COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-09-02640

SHANSLI PTY LTD	Plaintiff
v.
ORIGINAL PIZZA COMPANY PTY LTD	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	28 January 2010
DATE OF JUDGMENT:	28 January 2010 (Revised 4 February 2010)
CASE MAY BE CITED AS:	Shansli Pty Ltd v. Original Pizza Company Pty Ltd
MEDIUM NEUTRAL CITATION:	[2010] VCC 0013

REASONS FOR JUDGMENT

---

Catchwords:  Practice and Procedure – Defence and counterclaim struck out with
leave to deliver proposed amended pleadings – Original counterclaim
sought damages in excess of $800,000 on the basis of the plaintiff’s
alleged dishonest – Majority of claims later withdrawn – Indemnity costs
awarded.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C. Moloney	Davies Moloney
For the Defendant	Mr M. Kennedy	Christine Lau
HIS HONOUR:

1           This action commenced in the Magistrates’ Court in January 2009, when the plaintiff filed a claim for $67,341.13. The defendant filed a notice of defence on 27 February 2009, and a counterclaim on 20 March 2009. Both documents contained allegations of dishonesty. The plaintiff is a cleaning company. The defendant alleged that the

plaintiff had falsified timesheets, had stolen goods from the plaintiff, and had
performed the cleaning services inadequately.

2           The counterclaim anticipated that the defendant’s damages would exceed $800,000. As a consequence, the proceeding was transferred to this Court. Since that time, the plaintiff has attempted to obtain adequate particularization of the defence and

counterclaim and discovery of relevant documents. The defendant provided further
and better particulars of its pleadings on 24 March, 12 May, 21 August (twice) and 11
December 2009, and affidavits of documents on 6 April, 21 August and 11 December
2009.

3           In the supplementary further and better particulars and supplementary discovery provided on 11 December 2009, the defendant indicated that some of the allegations in the defence and in the counterclaim were no longer pursued by the defendant, and extensive parts of the discovery, which had shortly before been inspected by the plaintiff’s solicitors, were no longer said to be relevant to the dispute. In a letter, dated 19 January 2010, the defendant’s solicitors indicated that the defendant would no longer rely upon further parts of its defence and counterclaim.

4 the matter to be disposed at the trial, fixed for 16 April 2010. In my view, it is
appropriate that the defendant’s present defence and counterclaim be struck out. The

These are unusual circumstances and, in my view, require unusual orders in order for which is no longer relied upon. For this reason, and also because the defendant has previously pursued allegations (including serious allegations of dishonesty which it has failed to particularise and make proper discovery in respect of over many months) it is appropriate, in my view, for the defendant to effectively start afresh in pleading its defence and any counterclaim.

5           Until the process set out in the orders I have proposed has been completed, the plaintiff will not be able to enter judgment in default of defence. However, if the defendant fails to deliver a draft amended pleading, or fails to obtain leave to deliver the pleading, either by an order “on the papers” or by a further contested hearing, then the plaintiff would, at that stage, be entitled to enter judgment.

6           The second respect in which the orders are unusual is that the orders for costs will provide for the payment of indemnity costs and will require that the plaintiff’s costs be paid by the defendant before the proceeding is finalised. I propose to vary the default position provided for in the Rules, in relation to costs thrown away by reason of the amendment to the defendant’s pleadings. If in fact such an amendment is finally allowed, I will order that the plaintiff’s costs as a consequence of any proposed amendment to the defence and counterclaim, including the delivery of a proposed amended pleading by the defendant, be subject to an order that the defendant pay the plaintiff’s costs to be taxed on an indemnity basis.

7           I further propose to order that the plaintiff’s costs of the hearing today be fixed at $1,500. Whilst that quantum of costs was sought on the basis of them being indemnity costs, in my view, the preparation of the plaintiff’s solicitor’s affidavit and the preparation and attendance at the directions hearing today would justify an award of $1,500 costs on a party party basis in view of the nature of circumstances of this application.

8           The amendments to the orders I proposed and discussed with the parties will include the dates, 15 February for the delivery of the proposed amended defence and counterclaim, 23 February for the plaintiff’s solicitors to indicate whether they object to the proposed pleading and 26 February 2010 at 9.30am as the time when I will determine, in the event of a dispute, whether the defendant should have leave to file amended pleadings. The costs orders I proposed will be amended as I have indicated in these reasons for judgment.

- - -

Certificate

I certify that these 2 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 28 January 2010, and revised on 4 February 2010.

Dated: 4 February 2010

Caroline Dawes

Associate to His Honour Judge Anderson