Stuart v Hanna
[2018] WASCA 181
•16 OCTOBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: STUART -v- HANNA [2018] WASCA 181
CORAM: MURPHY JA
MITCHELL JA
HEARD: 16 OCTOBER 2018
DELIVERED : 16 OCTOBER 2018
PUBLISHED : 16 OCTOBER 2018
FILE NO/S: CACV 68 of 2018
BETWEEN: RICHARD ANTHONY STUART
Appellant
AND
JULIAN PHILIP HANNA
First Respondent
AND
TERRENCE RONALD GRAMMER
Second Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: TOTTLE J
Citation: STUART -v- HANNA [No 3] [2018] WASC 208
File Number : CIV 1997 of 2012
Catchwords:
Practice and procedure - Appeal against refusal of application to amend writ and statement of claim - Turns on own facts
Practice and procedure - Application to adduce additional evidence in the appeal - Turns on own facts
Legislation:
Supreme Court Act 1935 (WA), s 60(1)(f)
Result:
Application for leave to adduce additional evidence dismissed
Leave to appeal refused
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | Mr S J Howells |
| First Respondent | : | Mr S D Hubbard |
| Second Respondent | : | Mr P Lafferty |
Solicitors:
| Appellant | : | Ilberys Lawyers Pty Ltd |
| First Respondent | : | DLA Piper Australia |
| Second Respondent | : | Armeli & Moloney Lawyers |
Case(s) referred to in decision(s):
House v The King (1936) 55 CLR 499
Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374
Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116
Sovereign Grange Pty Ltd v A V Truck Services Pty Ltd (No 2) [2017] WASCA 142
The State of Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40
Traynor v Cunningham (No 2) [2017] WASCA 159
Wilson v Metaxas [1989] WAR 285
REASONS OF THE COURT:
Introduction
The appellant (Mr Stuart) appeals against orders of the primary judge dismissing his application for leave to amend his writ and re‑amend his statement of claim in the primary proceedings.[1] The proposed amendments would have joined two additional parties to the primary proceedings, Mr Richard James Yeates and Mr Terrence Ernest James Streeter. The proposed amendments would also have introduced a new cause of action claiming that the first respondent (Mr Hanna), Mr Yeates and Mr Streeter conspired to injure Mr Stuart by unlawful means.
[1] The primary judge's reasons for making those orders are published as Stuart v Hanna (No 3) [2018] WASC 208 (Primary Decision).
On 16 October 2018, the matter came before this court to consider:
(1)Mr Stuart's application in an appeal filed on 11 September 2018 (which essentially sought leave to adduce additional evidence in the appeal); and
(2)Mr Stuart's application for leave to appeal against the primary judge's interlocutory decision.
At the conclusion of the hearing we made the following orders in the appeal:
(1)The appellant's application in an appeal filed on 11 September 2018 is dismissed.
(2)Leave to appeal is refused.
(3)The appeal is dismissed.
(4)The appellant is to pay the costs of each of the first respondent and second respondent to be assessed if not agreed.
What follows are our reasons for making those orders.
The primary decision
In the primary proceedings, which were commenced in 2012, Mr Stuart claims damages and other relief based on the following contentions:[2]
(1)Mr Stuart, Mr Hanna, and the second respondent (Mr Grammer) formed a partnership in 1999 to exploit mining tenements. Subsequently, a company, Western Areas NL (WANL), was incorporated as a vehicle for the venture.
(2)WANL employed Mr Stuart, Mr Grammer and Mr Hanna. WANL was listed on the stock exchange and was profitable. Mr Hanna was a director but Mr Stuart was not.
(3)The partnership survived the incorporation of WANL.
(4)Mr Hanna must account to the partnership for benefits received by him which exceeded those received by Mr Stuart and Mr Grammer.
(5)Mr Hanna did not make good on representations made by him that Mr Stuart would be appointed as a director of WANL with the same remuneration as Mr Hanna.
(6)From early 2006 Mr Hanna sought to try to have WANL 'adversely alter [Mr Stuart's] title and status within WANL'.
(7)In July 2011 Mr Hanna induced WANL to terminate Mr Stuart's employment contract and the termination was unlawful.
[2] Primary Decision [8].
On 30 April 2018, Mr Stuart applied for leave to amend his writ and statement of claim. The detail of the proposed new claim is summarised in the Primary Decision.[3] We adopt that summary without repeating it. In essence, Mr Stuart sought to plead that:
(1)From early 2006, Mr Hanna and Mr Streeter discussed ways in which they could force Mr Stuart out of his employment with WANL.
(2)In October 2009, Mr Yeates became aware, and in 2010 a Mr David Southam became aware, that Mr Hanna and Mr Streeter wanted to remove Mr Stuart from his employment. Both Mr Yeates and Mr Southam agreed to participate in that endeavour.
(3)It could be inferred from 11 pleaded facts that Mr Hanna, Mr Yeates, and Mr Streeter had an agreement, or combined in a joint enterprise or shared a common purpose, to injure Mr Stuart by inducing and procuring WANL to terminate his employment with WANL.
(4)Mr Hanna, Mr Yeates, and Mr Streeter undertook 32 overt acts in furtherance of the alleged conspiracy.
[3] Primary Decision [11] - [24].
The primary judge dismissed Mr Stuart's amendment application for a combination of the following three reasons:
(1)The application was made late in the proceedings and the primary judge was not satisfied that an adequate explanation for the delay had been provided. The primary judge did not accept the explanation that Mr Stuart was not in a position to determine there had been a conspiracy until he received Mr Hanna's witness statements.[4]
(2)The proposed amendments had a very real capacity to result in an adjournment of the trial provisionally listed to commence in April 2019. It was almost inevitable that, if Mr Yeates and Mr Streeter were joined, the time that will be consumed by pleadings, discovery and trial preparation will be such that the trial will have to be adjourned. An adjournment of the trial constitutes prejudice to Mr Hanna and Mr Grammer, who have been the subject of litigation for six years. If the trial is adjourned it is unlikely that it will be heard until late 2019 at the earliest.[5]
(3)The proposed conspiracy claim, although not untenable, is 'a very weak case'. The pleaded facts provide only the weakest level of support for the inferences which Mr Stuart sought to have the court draw to sustain his claimed cause of action.[6]
[4] Primary Decision [31] - [33].
[5] Primary Decision [34] - [35].
[6] Primary Decision [36] - [38].
The primary judge also noted several deficiencies with the form of the proposed pleading. These deficiencies were not determinative of the amendment application, but would lead to the striking out of the pleading with leave to re-plead if the application had been a pleading summons.[7]
[7] Primary Decision [39] - [41].
Leave to appeal: general principles
As the appeal is from an interlocutory decision, Mr Stuart requires leave to appeal under s 60(1)(f) of the Supreme Court Act. Generally, leave should not be granted unless the decision below is plainly wrong or is attended by sufficient doubt to justify the grant of leave and a substantial injustice would be done if it remains undisturbed.[8]
[8] Kelbush Pty Ltd v Australia and New Zealand Banking Group Ltd [2016] WASCA 14; (2016) 49 WAR 374 [80] - [81]; The State of Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40, 54 ‑ 57; Wilson v Metaxas [1989] WAR 285, 294.
It is also significant that the appeal is against a discretionary decision of the primary judge on a matter of practice and procedure. Error of the kind explained in House v The King[9] must be shown.Special restraint must be exercised when the impugned interlocutory order is one concerning practice and procedure.[10]
[9] House v The King (1936) 55 CLR 499, 504 - 505.
[10] Traynor v Cunningham (No 2) [2017] WASCA 159 [41] and cases there cited.
Disposition of application for leave to appeal
For the following reasons, none of the grounds of appeal in the appellant's case filed on 24 July 2018 establish that the primary judge's decision is attended by sufficient doubt such as to justify the grant of leave to appeal.
Grounds 1 and 2: 2017 Proceeding
Ground 1 contends that the primary judge erred by failing to take into account a relevant consideration. The relevant consideration identified is that CIV 2253 of 2017 (2017 Proceeding), which was issued within time, claims damages for conspiracy against Mr Yeates and Mr Streeter.
There is no merit in that ground. The primary judge expressly referred to the 2017 Proceeding in the primary decision.[11]
[11] Primary Decision [5] - [6].
Ground 2 contends that the primary judge erred by 'applying case management principles to the exclusion of [Mr Stuart's] substantive right to amend his pleading and to pursue the 2017 Proceeding where [Mr Stuart] could proceed as of right against [Mr Yeates and Mr Streeter]'.
There is no merit in ground 2. The orders made by the primary judge do not affect the 2017 Proceeding or Mr Stuart's right to progress that action against the defendants to the 2017 Proceeding (which do not include Mr Hanna and Mr Grammer). Mr Stuart has no 'substantive right to amend his pleading' in the primary proceedings.[12] Mr Stuart has had and taken the opportunity to plead his case in the primary proceedings. The amendment to introduce a new cause of action involving new defendants required an order of the court.[13] In the exercise of its discretion to grant leave to amend, the court was to have regard to the objects of case flow management in the manner required by O 1 r 4B(2) of the Rules. In this context, there was no error in his Honour's approach of considering the reasons for the delay, the prejudice to the existing defendants and the strength of the proposed new cause of action in deciding whether to grant leave to amend the writ and pleadings.
Ground 3: reasons for the delay
[12] See Rowe v Stoltze [2013] WASCA 92; (2013) 45 WAR 116 [51].
[13] Under O 18 r 6(2)(b) and/or O 21 r 5(2) of the Rules of the Supreme Court 1971 (WA) (Rules).
Ground 3 contends that the primary judge erred in failing 'to give the proper weight to the reasons for the delays in bringing' the primary proceedings to trial.
Ground 3 does not disclose any basis for interfering with the exercise of the primary judge's discretionary judgment. It is well established that a complaint of giving inadequate or too much weight to a relevant consideration does not constitute an appellable error unless it really amounts to a failure to exercise the discretion actually entrusted to the court.[14]
[14] Sovereign Grange Pty Ltd v A V Truck Services Pty Ltd (No 2) [2017] WASCA 142 [55] and cases there cited.
In any event, the primary judge concluded that Mr Stuart was aware of pleaded matters prior to receiving Mr Hanna's witness statements. It followed, in his Honour's view, that the delay in making the application to amend was not explained by service of those witness statements. Mr Hanna's alleged delay in filing and serving witness statements could not be a satisfactory explanation for the delay in those circumstances. Further, whatever the reasons for delay in bringing the matter to trial, the fact remained that Mr Hanna and Mr Grammer had been subject to litigation for six years and would be prejudiced if the amendment were allowed. No error was involved in the primary judge's failure to give greater weight to Mr Hanna's alleged delay in completing interlocutory steps.
Ground 4: relative strength of proposed new cause of action
Ground 4 contends that the primary judge erred in reaching a conclusion about the relative strength of the proposed new claim 'in the absence of a sound evidentiary basis for that conclusion'. The application for leave to adduce additional evidence in the appeal is made for the purpose of demonstrating that an evidentiary basis for the claim exists.
This ground, and the application for leave to adduce additional evidence, misconceive the finding of the primary judge. The primary judge was not expressing any conclusion as to whether there was sufficient evidence to establish the facts pleaded in the proposed re‑amended statement of claim. Rather, the primary judge was expressing a view as to whether the primary facts pleaded in the proposed re-amended statement of claim supported the inferences which Mr Stuart sought to have the court draw from those pleaded facts. The primary judge's characterisation of the proposed conspiracy claim as 'very weak' was based on the facts pleaded in the proposed re‑amended statement of claim, irrespective of whether or not the evidence at trial would eventually prove those facts.
There is no merit in the proposed ground. Leave to adduce the additional evidence should be refused as it could not establish error in the primary judge's finding, which was based on the pleaded facts rather than the existence or absence of evidence to prove those facts.
Ground 5: identification of unlawful conduct in pleading
Ground 5 contends that the primary judge erred by concluding that the proposed re-amended statement of claim did not identify the conduct alleged to constitute the unlawfulness for the purposes of the tort of conspiracy by unlawful means. This ground seeks to attack the finding referred to at [8] above. A difficulty with this ground is that this finding was not treated by the primary judge as a determinative consideration, and the adequacy of pleading was in fact referred to by his Honour as 'not a matter that is critical to my reasoning'.[15] It can safely be inferred that the primary judge would have allowed Mr Stuart to re-plead if the form of the pleading were its only deficiency. Even if this error were established, it would not be material to the primary judge's ultimate conclusion, in the sense that it could not have affected the ultimate outcome. If this ground succeeded on its own, it would not justify this court's interference with the orders made by the primary judge.
Ground 6: evidence of further delay
[15] Primary Decision [39].
By ground 6, Mr Stuart contends that the primary judge erred by concluding, in the absence of any cogent evidence, that by joining Mr Yeates and Mr Streeter and giving leave to amend the amended statement of claim, the trial listed to commence in April 2019 would be delayed.
This ground has no merit. The primary judge was in a good position to assess the likely impact that allowing Mr Stuart's application would have on the progress of the action to trial. For that purpose, his Honour was entitled to rely on his experience of civil litigation generally and his particular knowledge of the interlocutory steps already taken in the primary proceedings. In the circumstances of this case, the primary judge did not require evidence in order to make that assessment. It was plain that introducing two new parties into long‑standing litigation, who would be required to begin to address the claim sought to be made against them, would introduce significant additional delay. The claim against those parties concerned a complex series of events alleged to have occurred between 1999 and 2011. It was well open to the primary judge to conclude that the need for two new parties to address the issues in the claim made against them, and take interlocutory steps to enable the matter to be ready for trial, would have a 'very real capacity' to result in an adjournment of a trial listed in April 2019.
At the hearing, counsel for Mr Stuart submitted that, if leave to amend were granted, it would be appropriate for the primary proceedings to be heard together with the 2017 Proceeding. However, his instructor advised the court that the writ in the 2017 Proceeding has still not been served. It is difficult to see how the 2017 Proceeding could be ready for a trial in the early part of 2019 in those circumstances. This tends to confirm the primary judge's conclusion that Mr Stuart's proposal would require an adjournment of the trial listed for April 2019.
Conclusion
For the above reasons, we were not satisfied that the primary judge's decision was plainly wrong or attended by sufficient doubt such as to justify the grant of leave to appeal. Nor were we satisfied that receipt of the proposed additional evidence could establish error by the primary judge. For those reasons, we made the orders referred to at [3] above.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ET
RESEARCH ASSOCIATE/ORDERLY TO THE HONOURABLE JUSTICE MITCHELL16 OCTOBER 2018
6
1