Snooks v CGU Insurance Limited
[2012] TASSC 66
•16 October 2012
[2012] TASSC 66
COURT: SUPREME COURT OF TASMANIA
CITATION: Snooks v CGU Insurance Limited [2012] TASSC 66
PARTIES: SNOOKS, Mark Leonard
v
CGU INSURANCE LIMITED (ABN 27 004 478 371)
FILE NO: 922/2007
DELIVERED ON: 16 October 2012
DELIVERED AT: Hobart
HEARING DATE: Written submissions
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Procedure – Costs – Departing from the general rule – Other cases – Indulgence of court – Successful application to amend pleading – Exercise of discretion.
Supreme Court Civil Procedure Act 1932 (Tas), s12.
Stanley v Layne Christensen Company [2006] WASCA 56 referred to.
Aust Dig Procedure [598]
REPRESENTATION:
Counsel:
Plaintiff: S B McElwaine
Respondent: B R McTaggart
Solicitors:
Plaintiff: Shaun McElwaine + Associates
Respondent: Wallace Wilkinson & Webster
Judgment Number: [2012] TASSC 66
Number of paragraphs: 13
Serial No 66/2012
File No 922/2007
MARK LEONARD JOHN SNOOKS v CGU INSURANCE LIMITED
REASONS FOR JUDGMENT HOLT AsJ
16 October 2012
On 24 September 2012 I granted leave to the plaintiff to amend his statement of claim and ordered that the plaintiff pay the defendant’s costs occasioned by reason of the amendment. The defendant also applied for an order that the plaintiff pay its costs of the application to amend. By agreement of the parties the application was left to be determined on the basis of written submissions. Having received the submissions, this is my determination of the application.
The background is as follows. The plaintiff seeks an indemnity from the defendant pursuant to a contract of insurance. According to the statement of claim the plaintiff’s premises were damaged as a result of a water main beneath the plaintiff’s buildings leaking and then, on 1 March 2002, bursting. By application made by letter dated 30 July 2012 the plaintiff sought leave to amend the statement of claim by adding to the claim for relief the words “including interest pursuant to s57 of the Insurance Contracts Act 1984”. On 1 August 2012 the plaintiff made a further application by letter, which was not opposed, to also add to the claim for relief the words “including damages”. Section 57 provides that where an insurer is liable to pay an amount under a contract of insurance, the insurer is also liable to pay interest on that amount at a prescribed rate from the time it became unreasonable for the insurer to withhold payment until the day of payment.
The Supreme Court Rules 2000, r427 is concerned with amendment. Subrules (1), (2) and (2A) are as follows:
“(1) At any time before judgment, the Court or a judge may grant leave to a party to amend any process or pleading in such a manner and on such terms as may be just.
(2) … the pleadings may be amended as necessary for the purpose of determining the real questions in controversy between the parties.
(2A) The Court or judge, despite the expiry of any relevant limitation period after the day on which proceedings commenced, may grant leave under subrule (1) if it is satisfied that any other party to the proceedings would not, as a result of granting leave, be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.”
I considered the operation of these subrules in Mirkazemi v Manns [2009] TASSC 91 at pars [8] to [17]. I drew the following conclusions. Amendments necessary for the purpose of determining the real questions in controversy between the parties are ordinarily allowed if the harm from so doing can be compensated by the imposition of terms. There is no modern practice that amendments which are not necessary for determining the real questions in controversy will generally be allowed. Amendments which seek to introduce new claims after a limitation period has expired may only be allowed if the Court is first satisfied that delay will not have resulted, if the amendment is made, in the chances of a fair trial becoming unlikely.
It was appropriate for the defendant to consider which category the proposed amendment came within and then consider the issues which might consequentially arise.
An order was made prior to the hearing of the amendment application requiring the parties to deliver written submissions. The defendant delivered written submissions dated 10 September. The plaintiff’s submissions in response were dated 12 September.
It is apparent from the defendant’s written submissions in opposition to the amendment application that it formed the view that the amendment sought to claim interest was an amendment introducing a new claim after a limitation period had expired; that the amendment would cause prejudice to it and that in any event the facts necessary to support the claim for interest had not been pleaded. The plaintiff’s written submission in response contained a detailed analysis of the law supporting the proposition that this was not a case of seeking to introduce a new claim after the expiry of a limitation period. The submission also contained the basis for the contention that the necessary facts to substantiate the claim for interest were already included in the existing statement of claim.
On the morning of the scheduled hearing, being 24 September, the defendant advised by email that it abandoned its opposition to the amendment application. I infer that the abandonment of the opposition to the application was due to the defendant forming the view that it did not have a sufficient prospect of success to justify its continued opposition. Had the defendant formed the opinion, which it ultimately did, prior to delivering its written submissions the matter would have been resolved without further delay and with less cost. However, because the defendant did not withdraw its opposition until the day of the hearing the plaintiff was put to the expense of preparing detailed submissions and undertaking any general preparatory work necessary to present argument at the scheduled hearing.
The plaintiff says that the defendant’s failure to come to the conclusion that the amendment application should not be opposed before delivering its written submission unreasonably increased the costs and in the circumstances the appropriate order is that the costs be in the cause. The defendant made no submission that, if it was found that the defendant had unreasonably increased costs, the order proposed by the plaintiff was nonetheless inappropriate
In considering the matter I am greatly assisted by the judgment of Wheeler JA in Stanley v Layne Christensen Company [2006] WASCA 56 at pars [52] and [55]. Her Honour said:
“52 The general rule is, and should remain, that where a party is seeking the indulgence of the Court, that party will be required to pay the costs of the application, including costs thrown away, and will not normally receive the costs of the application. However, it is also a normal rule that the Court will have regard to the extent to which it might be said that costs were unnecessarily incurred by a party, and will have regard to the reasonableness of the party's conduct in determining how costs should be awarded. In particular, where a contested application, even for an indulgence, is unnecessary because a party acting reasonably would have consented to appropriate orders, the party who has caused the costs to be unnecessarily incurred will not obtain its costs of such a proceeding merely because the application is for some indulgence. That is implicitly recognised in Briggs at 14, where Owen and Parker JJ appear to accept that an unreasonable withholding of consent might form an appropriate basis for a ruling on costs which departed from the "normal rule" relating to indulgences. However, in that case their Honours considered that it could not be said that the other party was unreasonable to require that the proposed amendment be justified to the satisfaction of a judicial officer.
…
56 I should add that the respondents submit that, as a general principle, the ‘normal rule’ upon a successful application to amend pleadings should be that the Court orders costs in the cause, since whether or not the amendments prove to be necessary and appropriate will depend upon whether the amending party ultimately succeeds at trial. I would not go so far as to hold that that should be the usual or normal order. There are a number of factors to balance. One is that, since it would generally be possible for a party to avoid the need to seek any indulgence by accurately formulating its pleading or otherwise complying with the rules, the fact that the party is seeking an indulgence will be relevant. As I have already noted, the degree of conferral and the reasonableness of conduct of the party opposing such an indulgence will also be relevant. Where amendments are not substantial, or where they serve simply to further clarify an otherwise broadly satisfactory pleading, it may be appropriate simply to order costs in the cause. Such a course may also be appropriate where an amendment adds a substantial, different, but apparently arguable cause of action, on the basis that it is always possible for a trial Judge to make a special order in relation to the costs of such an issue, if it should ultimately be found that the party is unsuccessful in relation to that new cause. It is appropriate that the discretion in such cases should remain unfettered in the interests of efficient case management.”
The alteration to the claim for relief simply added a claim for interest to already pleaded facts sufficient to support such a claim. The defendant increased the plaintiff’s costs unnecessarily by resisting the claim after it had had an adequate opportunity to carefully consider the law.
In the circumstances, I consider that the justice of the case rests with the making of an order in the terms proposed by the plaintiff.
It is ordered that the costs of the plaintiff’s amendment application made by letters dated 30 July and 1 August 2012, including any costs reserved, are in the cause.
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