Shire of Christmas Island v Acker Pty Ltd
[2014] WADC 138
•13 OCTOBER 2014
SHIRE OF CHRISTMAS ISLAND -v- ACKER PTY LTD [2014] WADC 138
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WADC 138 | |
| Case No: | CIV:399/2014 | 16 SEPTEMBER 2014 | |
| Coram: | REGISTRAR KINGSLEY | 13/10/14 | |
| PERTH | |||
| 8 | Judgment Part: | 1 of 1 | |
| Result: | Application to strike pleading allowed Application for indemnity costs refused | ||
| PDF Version |
| Parties: | SHIRE OF CHRISTMAS ISLAND ACKER PTY LTD |
Catchwords: | Practice Application to strike pleading and for indemnity costs No new principles |
Legislation: | Nil |
Case References: | FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384; [1996] NSWSC 350 Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
ACKER PTY LTD
Defendant
Catchwords:
Practice - Application to strike pleading and for indemnity costs - No new principles
Legislation:
Nil
Result:
Application to strike pleading allowed
Application for indemnity costs refused
Representation:
Counsel:
Plaintiff : Mr A Kaerstedt
Defendant : Mr N Billington
Solicitors:
Plaintiff : Origen Legal
Defendant : Gibson Lyons
Case(s) referred to in judgment(s):
FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384; [1996] NSWSC 350
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122
1 REGISTRAR KINGSLEY: In or about April 2009 the Shire of Christmas Island (SOCI) advertised for the submission of tenders for the supply of bitumen sealing services for bitumen sealing and resealing works on Christmas Island. On or about 21 April 2009 Acker Pty Ltd (Acker) submitted to SOCI a written offer and by letter of acceptance dated 28 May 2009 SOCI accepted Acker's offer to supply bitumen sealing services.
2 SOCI plead that the date for practical completion for the works under contract was 20 August 2009. By that date Acker had not completed any of the works under contract. Notwithstanding that Acker had not sought an extension of time, SOCI directed there be an extension of time and established a new date for practical completion of 22 February 2010, with an offer to grant Acker a further extension of time to 1 July 2011.
3 SOCI plead that in breach of the contract Acker failed to reach practical completion by 22 February 2010, or at all, and by notice dated 25 July 2012 terminated the contract. Pursuant to the contract SOCI claims liquidated damages from Acker in the amount of $332,115, together with the cost of supplying the bitumen required by Acker for the purposes of the bitumen sealing services under the contract in the sum of $65,610.
4 Acker has filed a defence dated 12 March 2014. Whilst there are various denials, in substance, Acker admits a contract was formed whereby Acker would supply bitumen sealing services to roads on Christmas Island. Relevantly for the purposes of this proceeding, at par 9 of the defence Acker pleads express terms of the contract were that SOCI would prepare the road surfaces for sealing (the preparation work) and supply aggregate of a suitable kind required for the bitumen sealing works on seven of the nine contracted areas (the aggregate).
5 Acker goes on at par 10 of its defence to plead the preparation work involved:
(a) assessment of the services;
(b) repair of potholes;
(c) testing;
(d) sweeping; and
(e) removal of overhanging branches.
6 At par 13 of the defence, Acker admits that by 20 August 2009 it had not completed the works. Acker pleads that it had not completed the works because, in breach of the contract, SOCI had failed to undertake the preparation works and supply the aggregate.
7 At par 14 of its defence Acker pleads at par 14.1 that SOCI was in breach of the contract in that it had failed to undertake preparation works and at par 14.5 that as at 13 April 2011 SOCI was 'in breach of the Works Contract or if, which is denied, the parties entered into the Contract, the Contract.'. I note that 'Contract' does not appear to have been defined in Acker's defence
8 At par 16 of the defence, Acker pleads, whilst admitting the works were not completed by 22 February 2010, that 22 February 2010 was not the date for practical completion and as at 22 February 2010 there was no date for practical completion.
9 Finally, at par 19.2.3 Acker pleads that it sent to SOCI a letter dated 20 June 2012 in which Acker advised SOCI of the impact of weather on the completion of works, referred to the diversion of its resources by direction of SOCI, and at par 19.2.3, provided a preliminary programme and advised SOCI that Acker was ready to mobilise and complete the works.
10 The paragraphs of the defence referred to above are sought to be struck by SOCI in its chamber summons dated 20 August 2014. The application was brought after SOCI considered Acker's response to SOCI's request for particulars of defence and that response is contained in the further and better particulars of defence filed 9 June 2014.
11 Turning to the particular paragraphs of Acker's defence:
Paragraph 10
12 SOCI, by written request dated 4 April 2014, sought particulars of par 10 as to precisely what facts it is alleged that the preparation work involved the works referred to in pars 10(a) to 10(e). Acker's response was that the preparation work involved the work pleaded as a matter of fact. SOCI also requested particulars of the purported agreement between SOCI and Acker that the preparation work would involve the work in pars 10(a) to 10(e) and requesting, in respect to each of those paragraphs, particulars whether the agreement was oral or in writing, if oral the usual particulars and, if in writing again the usual particulars. In response Acker states that this request was not applicable.
13 An initial reading of par 9 leads to the impression that the individual parts of the preparation work pleaded in par 10 were an express term of the agreement. However, during the course of submissions it appears that the work in pars 10(a) to 10(e) comprising the preparation work is the interpretation placed on that term by Acker. It transpired that the plea in pars 10(a) to 10(e) that this work comprised the preparation work is not referred to in the contract.
14 Acker's counsel submits it is a matter of interpretation and construction between SOCI and Acker as to what preparation work means. The principle difficulty with that submission is that Acker elevates the issue of SOCI failing to complete the preparation works to a breach of the contract (par 13 defence). Acker can only rely on SOCI's failure to complete the preparation works as a breach if, as a term of the contract, SOCI has an obligation to complete those works.
15 As, in the course of submissions, the contract does not contain a term detailing the preparation work, then any term of the agreement between SOCI and Acker that the preparation work would involve the work referred to in pars 10(a) to 10(e) must be implied.
16 Acker does not plead any basis for the implication of a term of the contract that preparation work involved that matters pleaded in pars 10(a) to 10(e). That being the case, as the pleas in pars 9 and 10 relates to the preparation work, those pleas must be struck out together with the answer to request 3 on the basis that they disclose no reasonable cause of action.
Paragraph 13
17 Paragraph 13 pleads that Acker had not completed the works by 20 August 2009 because, in breach of the contract, SOCI had failed to undertake the preparation work and supply the aggregate. For the reasons referred to under par 10, no term has been pleaded to ground an allegation of a breach of contract.
Paragraph 14
18 Again, for the reasons referred to under par 10, par 14 in so far as it relates to the preparation works must be struck.
Paragraph 16
19 Acker pleads at par 16 that the works were not completed by 22 February 2010, and pleads that 22 February 2010 was not the date for practical completion.
20 Counsel for SOCI submits that, read with the conditions of contract, par 16 is embarrassing. Counsel for SOCI submits that the date for practical completion can only be extended by an extension of time process which is initiated, in this circumstance, by Acker.
21 SOCI sought particulars of what facts Acker contends 22 February 2010 was not the date for practical completion. Acker responded by saying that it had not completed the works by reason of the breaches of SOCI, and as the breaches continued as at 13 April 2011, Acker was entitled to a reasonable time to complete the works.
22 At par 9 of the defence, Acker admits the conditions of contract contain clauses detailing the process for an extension of time. In answer 9 to SOCI's request for particulars, Acker simply states it was entitled to a reasonable time to complete the works, and that completion by 22 February 2010 was not a reasonable time. There is no reference by Acker to the extension of time process.
23 In my opinion par 16 ought be struck. There are no particulars by Acker as to why 22 February 2010 is not a date for practical completion. Answer 9 by Acker to SOCI's request for particulars refer to breaches of the contract as pleaded to in par 14.5 of the defence. Paragraph 14.5, if it relates to the preparation works has been dealt with above. If par 14.5 of the defence refers to other breaches of contract, then those breaches are not particularised.
Paragraph 19.2
24 SOCI's counsel submits this paragraph be struck because the preliminary programme referred to in par 19.2.3 of the defence relates to an entirely different tender. Thus, as SOCI submits the plea has no relevance to the fact in issue as to whether Acker had shown reasonable cause why SOCI should not terminate the contract.
25 Acker pleads that it sent to SOCI a letter dated 20 June 2012 providing the preliminary programme. Having read the letter (RJM7 to the affidavit of Ryan John Moss, sworn 20 August 2014) I am not prepared to strike the paragraph. Attached to that letter is what purports to be a copy of the preliminary programme. The quality of copying makes it indecipherable. I am assured by counsel for Acker that the document is a preliminary programme relating to the contract. I am not prepared to strike par 19.2.
26 Acker's counsel conceded that the orders sought in par 5 of the chamber summons dated 20 August 2014 should be made, that is Acker be compelled to provide further and better particulars to par 19.2 of the defence.
Conclusion
27 I am of the opinion that the paragraphs referred to above, other than par 19.2 are so deficient that they ought be struck. However I am of the opinion that Acker should be allowed to re-plead its defence to properly establish as a term of the contract the aspects of the preparation work and the basis of Acker's entitlement to the extension of time. Further, the re-pleading will enable Acker to better particularise par 19.2.1 of its defence.
Case management
28 Counsel for SOCI submits that due to ongoing delays by Acker that the matter be case managed by a judge. In this court case management is usually undertaken by a registrar of the court.
29 The reasons for case management will be amplified under the heading 'indemnity costs'. For those reasons I agree this action should have greater attention by a registrar.
Indemnity costs
30 SOCI seeks orders that Acker pay the costs of SOCI on an indemnity basis and within 14 days of order. In support counsel for SOCI submits that SOCI had to bring an application to compel Acker to file and serve further and better particulars in default of orders made on 21 March 2014.
31 On 21 March 2014 an order was made that SOCI request particulars of the defence on or before 4 April 2014 and that Acker was to respond to that request on or before 17 April 2014. On 26 May 2014, an order was made that the time within which Acker was to respond to SOCI's request be extended to 14 days from 26 May 2014.
32 In support of the application for indemnity costs, Ryan John Moss in an affidavit sworn 8 May 2014 deposed that the solicitors for SOCI did not receive the particulars from Acker by 17 April 2014 and sent a letter dated 23 April 2014 to Acker's solicitors. Moss deposes that there was no response to that letter, nor any response to subsequent letters dated 28 April 2014 and 1 May 2014.
33 Further, with regard to the current application, Moss in his affidavit sworn 20 August 2014, deposes that Acker's solicitors failed to file an amended defence contrary to the solicitor's letter dated 16 July 2014. In that letter, the solicitor for Acker advises they were currently amending the defence and anticipated filing an amended defence within seven days. The solicitors for SOCI wrote on 24 July 2014 advising that unless by 29 July the amended defence was filed and served, SOCI would file an application. Counsel for SOCI submits that Acker had ample time between 24 July and 21 August to file and serve an amended defence but delayed until 14 August to write to the solicitors for SOCI to advise that there would be further delays.
34 Counsel for SOCI seeks waiver of the conferral requirement pursuant to O 59 r 9(1) by reason of the letters setting out the position of SOCI and the fact that Acker's solicitors did not return the telephone call of the solicitors for SOCI on 24 July 2014.
35 In general, indemnity costs may be awarded where the conduct of a party unacceptably departs from the standards of litigation in a commercial court, in a way which prevents the court from conducting the litigation in an expeditious way or where there has been improper or unreasonable conduct on the part of a party or their legal advises (FAI General Insurance Co Ltd v Burns (1996) 9 ANZ Ins Cas 61-384; [1996] NSWSC 350, Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122).
36 Whilst the plaintiff is entitled to its costs on its application, I am not prepared to award those costs on an indemnity basis. In relation to the Flotilla Nominees Pty Ltd v Western Australian Land Authority case it would appear the argument was based more on the disparity between what costs were likely to be recovered on taxation and the actual costs of litigation. Whilst Acker's solicitor has been tardy in responding to correspondence and telephone calls and slow in providing the amended defence, those factors at this early stage of the proceedings do not demonstrate that there has been improper or unreasonable conduct on the part of Acker or Acker's solicitors. However that conduct does demonstrate the court ought pay greater attention to the action.
37 I will hear from counsel as to the timing of the amended defence and I will programme orders in relation to discovery and any expert evidence that may be required.
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