Stuart v Hanna [No 3]
[2018] WASC 208
•27 JUNE 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: STUART -v- HANNA [No 3] [2018] WASC 208
CORAM: TOTTLE J
HEARD: 27 JUNE 2018
DELIVERED : 27 JUNE 2018
FILE NO/S: CIV 1997 of 2012
BETWEEN: RICHARD ANTHONY STUART
Plaintiff
AND
JULIAN PHILIP HANNA
First Defendant
TERRENCE RONALD GRAMMER
Second Defendant
Catchwords:
Practice and procedure - Pleadings - Application for leave to amend - Statement of claim - Writ of summons - Where new cause of action raised - Where leave sought at late stage of application - Whether reasonable cause of action disclosed - Whether defendants prejudiced
Legislation:
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr S J Howells |
| First Defendant | : | Mr J A Thomson SC & Mr S D Hubbard |
| Second Defendant | : | Mr D Molony |
Solicitors:
| Plaintiff | : | Ilberys Lawyers |
| First Defendant | : | DLA Piper |
| Second Defendant | : | Armeli & Molony Lawyers |
Case(s) referred to in decision(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Elliott v Seymour (1999) FCA 976
General Steel Industries v Commissioner for Railways (1964) 112 CLR 125
Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431
Hightime Investments Pty Ltd v Lungan (No 2) [2010] WASC 296
Lee v Abedian [2016] QSC 92
R v Associated Northern Collieries [1911] HCA 73; (1911) 14 CLR 387
Samsung C & T Corporation v Loots [2016] WASC 330
Sino Iron Pty Ltd v Mineralogy Pty Ltd [2014] WASC 406
TOTTLE J:
Introduction
This is an application for leave:
(a)to amend the writ of summons filed on 6 December 2012 by joining two additional defendants, Mr Richard Yeates as the third defendant, and Mr Terrence Streeter as the fourth defendant; and
(b)to re-amend the statement of claim to raise a new cause of action against Mr Hanna, who is the first defendant, and Mr Yeates and Mr Streeter, being a claim of damages for 'unlawful means' conspiracy.
The application is brought by a chamber summons issued on 30 April 2018. The chamber summons was supported by an affidavit affirmed by Mr Stuart, the plaintiff, on 6 April 2018. A number of paragraphs to Mr Stuart's affidavit were struck out on the basis that they contained inadmissible material.
Background
The events that are the subject of this action took place between 1999 and July 2011. Progress in the action has been slow. Save for the possibility of the further amendment to the statement of claim raised by the present application, pleadings have closed.
The parties have filed their witness statements on issues concerning liability.[1] There were delays by the defendants in filing their witness statements. A number of statements were filed later than required by the original case management orders, albeit that Mr Stuart consented to extensions of time.
[1] A direction was made at an earlier stage in the proceedings that the liability issues should be tried first.
On 27 July 2017, Mr Stuart filed a writ of summons against a number of parties, including Mr Yeates and Mr Streeter. The writ in those proceedings (numbered CIV 2253 of 2017) was not served.
At a strategic conference held on 20 February 2018, the liability issues were provisionally listed for a 15-day trial due to commence on 8 April 2019. Mr Stuart's counsel explained that the proceedings numbered CIV 2253 of 2017 had been commenced as Mr Stuart held a concern that the limitation periods in relation to the causes of action pleaded in that writ were due to expire.
The defendants oppose the present application on grounds that:
(a)the proposed amendments to the statement of claim do not disclose a reasonable cause of action;
(b)no adequate justification has been demonstrated for an amendment at this late stage of the proceedings; and
(c)they will be prejudiced if the amendment is allowed.
The pleaded case
At the heart of Mr Stuart's claim is an allegation that he, Mr Hanna and the second defendant, Mr Grammer formed a partnership in 1999 to exploit mining tenements. Subsequently with Mr Streeter's assistance a company, Western Areas NL (WANL), was incorporated as a vehicle for the venture. Mr Stuart, Mr Grammer and Mr Hanna became employees of WANL, it was listed on the stock exchange and was profitable. Mr Hanna was a director but Mr Stuart was not. Mr Stuart alleges that the partnership survived the incorporation of WANL. He claims that Mr Hanna must account to the partnership for benefits received by him which exceeded those received by Mr Stuart and Mr Grammer. Mr Stuart also claims that Mr Hanna did not make good on representations made by him that he, Mr Stuart, would be appointed as a director of WANL with the same remuneration as Mr Hanna. Mr Stuart claims that from early 2006 Mr Hanna sought to try to have WANL 'adversely alter [his] title and status within WANL', and he claims that in July 2011 Mr Hanna induced WANL to terminate his, Mr Stuart's, employment contract and that the termination was unlawful. Because reliance is placed on it to support the unlawful means conspiracy plea sought to be introduced by the proposed amendment, the pleading of Mr Hanna's role in the unlawful termination of Mr Stuart's employment contract is reproduced below.
In or about mid 2011 wrongfully and in breach of the Agreement, the partnership and his fiduciary duty to the Plaintiff, the First Defendant deliberately and intentionally persuaded the other Board members of WANL to wrongfully terminate the employment of the Plaintiff.
Particulars
The act of the First Defendant in persuading the other Board members of WANL to terminate the Plaintiff's employment may be inferred from the circumstances of the termination. The termination was wrongful because there was no proper or valid ground or reason for it and was motivated by an improper and impermissible purpose. Further the termination was not attended by the giving of due notice or payment in lieu of due notice.
Three further matters pleaded by Mr Stuart must be noted. First, he pleads that in December 2006 Mr Hanna asked Mr Stuart whether he would provide a witness statement to assist Mr Streeter in litigation involving another company, WANL Exploration Limited. Mr Stuart declined to provide a statement. Secondly, in October 2007 Mr Stuart pleads he refused a request from Mr Hanna that he agree that there had been no legal structure or agreement between Mr Stuart, Mr Hanna and Mr Grammer prior to the formation of WANL. Thirdly, he pleads that in March 2008 Mr Hanna denied that he was under any obligation to consult with Mr Stuart about the appointment of a Mr Charles Wilkinson as the general exploration manager of WANL.
Mr Stuart claims to be entitled to a declaration that Mr Hanna holds the benefits received by him on trust for the partnership to the extent to which they exceed the benefits obtained by him and Mr Grammer, and an account of profits. Mr Stuart claims equitable compensation for breach of fiduciary duty, and damages for breach of constructive trust, breach of contract, misrepresentation and inducing a breach of contract.
The proposed conspiracy plea
The amendments are introduced by a series of paragraphs (pars 49A to 49R) in the minute of proposed re-amended statement of claim annexed to the chamber summons.
Mr Stuart pleads that Mr Hanna was aware from March 2000 that Mr Stuart believed that the partnership agreement entitled him to equal share of the partnership profits and that Mr Stuart considered that he was entitled to be appointed as a director of WANL (par 49A). Mr Stuart pleads that Mr Hanna was aware from early 2006 that WANL would make substantial profits in 'the ensuing financial period' (par 49B). He pleads that Mr Streeter was aware from early 2006 that he had and maintained a dispute with Mr Hanna concerning their respective roles and remuneration within WANL (par 49C).
Mr Stuart pleads that from early 2006 Mr Hanna and Mr Streeter discussed ways in which they could force Mr Stuart out of his employment with WANL. It is alleged this was done in order to:
(a)avoid giving effect to Mr Hanna's obligations under the partnership;
(b)avoid giving effect to Mr Hanna's 'promises of equality', (that is representations allegedly made by Mr Hanna to Mr Stuart to the effect that the latter would be appointed as a director of WANL and would receive the same benefits as Mr Hanna);
(c)avoid having to account to Mr Stuart for Mr Hanna's higher salary and entitlement;
(d)avoid the cost and consequential reduction in the profit of WANL if Mr Stuart's demands were met;
(e)avoid any potential public embarrassment to Mr Hanna;
(f)enable Mr Hanna to continue to present himself as a competent geologist on the board of WANL and to avoid his limited knowledge and skills being exposed; and
(g)enhance Mr Hanna's status in the industry. (par 49D)
No particulars of the discussions between Mr Hanna and Mr Streeter are provided. It was submitted on Mr Stuart's behalf that in a conspiracy case the requirement to provide particulars of the kind that are usually provided of discussions such as those alleged to have taken place between Mr Hanna and Mr Streeter does not exist. It was submitted that the existence of those discussions is to be inferred from the overt acts upon which reliance is placed to establish the agreement, combination or joint enterprise upon which an alleged conspiracy rests.[2]
[2] Mr Stuart's counsel relied on the observations of Isaacs J in R v Associated Northern Collieries [1911] HCA 73; (1911) 14 CLR 387, 400.
Mr Stuart pleads the involvement of each of the other alleged co‑conspirators in the conspiracy. He pleads that in October 2009 Mr Yeates became aware that Mr Hanna and Mr Streeter wanted to remove the plaintiff from his employment, and that Mr Yeates agreed to participate in that endeavour (par 49E). No particulars of how Mr Yeates became aware of those matters or how Mr Yeates agreed to participate are provided.
Mr Stuart pleads that in 2010 a Mr David Southam became aware that Mr Hanna and Mr Streeter wanted to remove Mr Stuart from his employment, and that Mr Southam agreed to participate in that endeavour, and that that took place in 2010 (par 49F). Once again, no particulars are provided of how Mr Southam became aware of those matters, or of how it is he agreed to participate. Mr Southam is a defendant in the proceedings numbered CIV 2253 of 2017 but Mr Stuart does not propose to join him as a party to this action.
Mr Stuart pleads that Mr Hanna, Mr Yeates and Mr Streeter intended to injure the plaintiff by forcing him out of his employment with WANL (par 49G).
Mr Stuart pleads that there was an agreement between Mr Hanna, Mr Yeates and Mr Streeter - alternatively that they combined in a joint enterprise - alternatively that they shared a common purpose to injure Mr Stuart:
(a)by recruiting others to the board of WANL who would agree to terminate Mr Stuart's employment;
(b)by harassing Mr Stuart; or
(c)by forcing Mr Stuart out of his employment with WANL and by securing the support of the WANL board to terminate the plaintiff's employment (par 49H).
The plaintiff identifies 11 matters from which the agreement, combination or joint enterprise described in the preceding paragraph and pleaded in par 49H is to be inferred. Those matters are:
(a)the obligations of the First Defendant under the Agreement and or the Partnership;
(b)the concealment by the First Defendant of his obligations under the Agreement and or the Partnership;
(c)the cost and inconvenience to First and Fourth Defendants and Western Areas if the obligations had to be honoured;
(d)the series of assurances given to the Plaintiff by the First Defendant recounted in paragraph 49K hereof;
(e)the contradiction of those assurances by the First Defendant;
(f)the absence of any record of the Board of Western Areas considering the matter of the dispute between the Plaintiff and the First Defendant until 2010;
(g)the peculiarity of the recruitment process for the Third Defendant as a Director in which he was asked to consider the position of the Plaintiff's employment with Western Areas prior to his appointment as a Director;
(h)the attempts by the First Defendant to inveigle or otherwise prompt the Plaintiff to provide a witness statement favourable to the Fourth Defendant as recounted in paragraph 49K hereof;
(i)the general harassment of the Plaintiff by the First, Third and Fourth Defendants and Mr Southam;
(j)the absence of any credible evidence of failure or incompetence on the part of the Plaintiff and the failure by the First, Third and Fourth Defendants and Mr Southam to undertake any proper analysis of the Plaintiff's competence in and dedication to his employment and work or his dispute with the First Defendant; and
(k)the fact and manner of termination of the Plaintiff.
Mr Stuart pleads that by reason of the agreement, joint enterprise or combination, Mr Hanna, Mr Yeates and Mr Streeter induced and procured WANL to terminate Mr Stuart's employment; that they conspired and agreed with Mr Hanna to injure Mr Stuart; and that they intentionally caused loss or damage by unlawful means (par 49J).
In par 49K Mr Stuart pleads 32 overt acts which are said to have been undertaken in furtherance of the alleged conspiracy. They are pleaded as follows:
(a)In or about March 2000, the First Defendant assured and represented to the Plaintiff that he would be appointed a Director and receive increased pay.
Particulars
The Plaintiff refers to and repeats paragraphs 26 and 27 hereof and the particulars subjoined thereto. In particular, the First Defendant said that what he had agreed with the Fourth Defendant was 'that's what directors get and you will become a director and then your pay will be increased, anyway this is just an interim arrangement until we get the company up and running'.
(b)The First Defendant thereafter concealed the assurances and representations referred to in sub-paragraph (a) hereof from the Board.
(c)From at least 2006 the First and Fourth Defendants refused to provide any job description to the Plaintiff or any written clarification of his responsibilities and authority other than one acknowledgement of his title in spite of repeated requests for such clarification by the Plaintiff
(d)In or about early 2006, the First Defendant sought to have Western Areas adversely alter the Plaintiff's title and status within Western Areas.
(e)In or about October 2006, the First Defendant failed to give any support for the Plaintiff's application to the Remuneration Committee of Western Areas and denied the basis of the Plaintiff's application made by the Plaintiff.
Particulars
The Plaintiff made a formal application in which he said that he and the First Defendant had come to Western Areas as equals with an agreement for equal entitlements. The Remuneration Committee rejected the Plaintiff's application without reasons.
(f)In or about November 2006, the First Defendant repeated the assurances and representations referred to in sub-paragraph (a) hereof to the Plaintiff and told the Plaintiff that the Board of Western Areas was presently considering the appointment of the Plaintiff to the Board of Western Areas.
Particulars
The Plaintiff refers to and repeats paragraphs 40 and 41 hereof and the particulars sub-joined thereto.
(g)The First Defendant concealed the assurances and representations referred to in sub-paragraph (e) hereof from the Board of Western Areas.
(h)In or about November 2006, the First Defendant with the agreement of the Fourth Defendant increased his salary from $300,000 to $600,000.
(i)In or about December 2006, the First Defendant at the request of the Fourth Defendant demanded of the Plaintiff that he provide a witness statement favouring the Fourth Defendant to be used in litigation that was then pending between the Fourth Defendant and some other parties.
Particulars
The Plaintiff refers to and repeats paragraph 42 hereof and the particulars subjoined thereto.
(j)On or about 3 July 2007, the First Defendant repeated the assurances and representations referred to in sub-paragraph (a) hereof to the Plaintiff and told the Plaintiff that the impending retirement of a member of the Board of Western Areas meant that there was an opportunity to have the Plaintiff appointed to the Board of Western Areas and that his remuneration would be adjusted accordingly.
Particulars
The Plaintiff refers to and repeats paragraphs 43 hereof and the particulars subjoined thereto.
(k)The First Defendant thereafter concealed the assurances and representations referred to in sub-paragraph (j) hereof from the Board of Western Areas.
(l)On or about 14 August 2007, the First Defendant sought and obtained the approval of the Fourth Defendant to have the Plaintiff acknowledged as Exploration Manager Regional Projects with an increase of his salary to $180,000 and told the Plaintiff that his salary would be reviewed on 1 January 2008 with a view to increasing his salary to $200,000.
(m)On or about 17 September 2007, the First Defendant at the behest of himself and the Fourth Defendant proposed Michael Ivey, John Santul and the Third Defendant as candidates for the position of independent non-executive directors of the Western Areas.
(n)In or about October 2007, the First Defendant demanded that the Plaintiff agree with him that there had been no legal structure between the partners to ANPC.
Particulars
The Plaintiff refers to and repeats paragraphs 44 hereof and the particulars subjoined thereto.
(o)In or about March 2008, the First and Fourth Defendants appointed Mr Charles Wilkinson as General Manager Exploration with responsibilities and authority conterminous with those being undertaken by the Plaintiff and they did so without prior consultation with or recourse to the Plaintiff.
(p)In or about March 2008, the First Defendant told the Plaintiff that he considered that he had no obligation to the Plaintiff in respect of the appointment of Mr Wilkinson.
Particulars
The Plaintiff refers to and repeats paragraphs 45 hereof and the particulars subjoined thereto.
(q)In or about May 2008 the Board of Western Areas appointed Mr Dan Lougher as a Director of Western Areas to the exclusion of the Plaintiff.
(r)In or about February 2009, the First Defendant with the approval and encouragement of the Fourth Defendant told the Plaintiff that he should take early retirement.
(s)In or about October 2009, the First and Fourth Defendants recruited the Third Defendant to the Board of Western Areas first requiring him to consider detailed allegations against the Plaintiff and having ascertained that he would be in favour of the termination of the Plaintiff.
(t)In or about October 2009, the Third Defendant sought appointment to the Board of Western Areas and did so expressing a view in favour of the termination of the Plaintiff's employment without having interviewed the Plaintiff or otherwise met with him or heard his responses.
(u)In or about November 2009, the Third Defendant was appointed to certain committees of Western Areas.
(v)In or about November 2009, the First Defendant with the approval and encouragement of the Fourth Defendant told the Plaintiff that he should take early retirement.
(w)In or about February 2010, the First Defendant with the approval and encouragement of the Fourth Defendant told the Plaintiff that he should take early retirement.
(x)In or about June 2010, the First Defendant at the suggestion of the Fourth Defendant made arrangements to move the Plaintiff to a less amenable and suitable office without consulting the Plaintiff.
(y)In or about August 2010, the First and Fourth Defendants recruited Mr Southam to the Board of Western Areas having ascertained that he would be in favour of the termination of the Plaintiff's employment.
(z)In or about December 2010, the First, Third and Fourth Defendants supported the appointment of Mr Southam to the Remuneration Committee.
(aa)In or about May 2011, the First, Third and Fourth Defendants appointed Mr David O'Neill to a position of Regional Exploration Manager then held by the Plaintiff without consultation with or recourse to the Plaintiff.
(bb)In or about May 2011, Mr Southam came to the Plaintiff's office and harassed him.
Particulars
Mr Southam pulled a chair around to the side of the desk that the Plaintiff was sitting at and spoke to the Plaintiff in a menacing way.
(cc)In or about June 2011, the First, Third and Fourth Defendants and Mr Southam voted to delegate to the First Defendant the matter of handling the Plaintiff's claims.
(dd)In or about 8 July 2011, the First and Fourth Defendants proposed to the Board of Western Areas that the Third Defendant and Mr Southam be delegated to manage the termination of the Plaintiff.
(ee)On or about 29 July 2011, Western Areas terminated the Plaintiff's employment.
(ff)The Board of Western Areas agreed to pay a sum of money to the Plaintiff without seeking a release.
Mr Stuart pleads that none of the overt acts, or the motivations for them, were acts or motivations falling within the proper duties and responsibilities of Mr Hanna, Mr Yeates and Mr Streeter as directors of WANL, but that they were acts or motivations which were governed by their personal interests and the adoption by Mr Yeates and Mr Streeter of Mr Hanna's interests (pars 49L - 49N).
Mr Stuart pleads that Mr Hanna and Mr Yeates took steps to have WANL make a payment to him without securing any proper release for WANL (par 49O). Mr Stuart's counsel explained that the purpose of that plea is to demonstrate a desire on the part of WANL and those who were making decisions on its part to settle the matter and to obtain a final outcome, and perhaps a readiness to 'cut corners' in doing so.[3]
[3] ts 105.
Mr Stuart pleads that 'as a consequence of the [conspiracy]', he was excluded from alternative employment opportunities (par 49P) and that 'by reason of the [conspiracy]' he has suffered loss and damage (par 49Q).
Legal principles applicable to amendment applications
The power to disallow proposed amendments is to be exercised so as to best ensure the attainment of the goals set out in O 1 r 4A and the objects of O 1 r 4B(1) of the Rules of the Supreme Court1971 (WA) (RSC).[4] It is important to record that the goal of the practice and procedure of the interlocutory processes of the court, as stated in O 1 r 4A RSC is the elimination of any lapse of time from the date of the initiation of the proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues bona fide in contention between the parties and the preparation of the case for trial.
[4] See Hightime Investments Pty Ltd v Lungan (No 2) [2010] WASC 296 [51]; Sino Iron Pty Ltd v Mineralogy Pty Ltd [2014] WASC 406 [32]; Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 [30]; Samsung C & T Corporation v Loots [2016] WASC 330 [62].
The objects of O 1 r 4B(1) are the following:
(a)promoting the just determination of litigation; and
(b)disposing efficiently of the business of the Court; and
(c)maximising the efficient use of available judicial and administrative resources; and
(d)facilitating the timely disposal of business; and
(e)ensuring the procedures applicable, and the costs of the procedure to the parties and the State, are proportionate to their value, importance and complexity of the subject matter in dispute; and
(f)that the procedure applicable and the costs of the procedure to the parties, are proportionate to the financial position of each party.
The considerations identified by the High Court in Aon Risk Services Australia Limited v Australian National University inform the exercise of the discretionary power to allow or refuse an amendment to a pleading.[5] The relevant principles in Aon have been summarised as follows.[6]
[5] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.
[6] See Hightime Investments Pty Ltd v Lungan (No 2) [52]; Sino Iron Pty Ltd v Mineralogy Pty Ltd [31]; Samsung C & T Corporation v Loots [63].
(a)The effect of the amendment on the court and on other litigants is relevant.
(b)There is no right to amend to introduce an arguable case and it is wrong to say that only in extreme circumstances would a party be shut out from litigating an arguable case.
(c)That justice requires that the parties have a proper opportunity to plead their case, but limits may be placed on re‑pleading when delay and cost are taken into account.
(d)A just resolution does not mean that a party will always be permitted to raise any arguable case at any point in the proceedings on payment of costs, even indemnity costs.
(e)The inevitable strains of litigation must be taken into account in weighing the adverse consequences of delay, and this applies to natural persons and other litigants.
(f)The nature and importance of the amendment to the party amending must be taken into account.
(g)Attention must be given to the extent of the delay and the costs associated with it, the prejudice which might reasonably be assumed to follow from it, and any prejudice that is shown.
(h)The point in the litigation relative to the trial may be an important consideration.
(i)Where a discretion is sought to be exercised in favour of the party, an explanation will be called for.
(j)The point can be reached where a party has had a sufficient opportunity to put its case.
An amending party should explain any substantial delay in making the amendment.[7]
[7] Hightime Investments Pty Ltd v Lungan (No 2) [54].
The elements of unlawful means conspiracy
The essential elements of the cause of action of conspiracy to injure by unlawful means were stated by Bond J in Lee v Abedian as follows:[8]
(a)there was a combination or agreement between two or more persons to engage in conduct amounting to unlawful means;
(b)a purpose of that combination or agreement was to injure the plaintiff;
(c)the combination or agreement was carried into effect by the commission of the agreed unlawful acts; and
(d)those unlawful acts caused damage to the plaintiff.
[8] Lee v Abedian [2016] QSC 92 [70].
In Lee v Abedian, Bond J cited with approval the observations of Ryan J in Elliott v Seymour as to the way in which an unlawful means conspiracy should be pleaded.[9] In Elliott v Seymour Ryan J stated that the plaintiff would be allowed to continue to allege a conspiracy 'only if the statement of claim specifies with sufficient particularity the time and making of each agreement between the alleged conspirators, the unlawful means agreed to be employed and the facts or circumstances which made them unlawful'.[10] His Honour continued:
The unlawful means relied on should be indicated in the body of the pleading alleging the conspiracy or in particular specifically appended to that part of the pleading and should not be incorporated by reference to several other, otherwise unrelated, parts of the statement of claim. The pleading should also indicate what unlawful acts were performed pursuant to the alleged agreement and how those acts caused damage to [the plaintiff].
[9] Lee v Abedian [80].
[10] Elliott v Seymour (1999) FCA 976 [97].
Disposition
I will dismiss the application for the following reasons. First, it is made late in the proceedings and I am not satisfied that an adequate explanation for the delay has been provided. Secondly, if the amendments are allowed it is most likely that the provisionally listed trial will be adjourned and this will prejudice the defendants. Thirdly, in my view the proposed conspiracy claim is very weak.
Delay and the inadequacy of the explanation
This application is brought at a late stage in this action. On Mr Stuart's behalf it was submitted, in effect, that it was not until he had seen Mr Hanna's witness statements that he was in a position to determine that there had been a conspiracy because the witness statement did not disclose any matters or 'rational explanation' - such as a series of mistakes - that justified the termination of his employment.[11] This does not provide an adequate explanation for the delay in circumstances in which Mr Stuart has been proceeding with his existing claim on the basis that his contract of employment was terminated wrongfully and unlawfully for some years.
[11] ts 36.
Moreover, of the 32 overt acts pleaded in the particulars under par 49K of the proposed re-amended statement of claim from which Mr Stuart invites the court to draw inferences as to the existence of the conspiracy, only the matters pleaded in particulars (s), (t) and (y) are matters that might not have been known to Mr Stuart before the witness statements were served. Thus, I am not satisfied that the delay in making the proposed amendment was due to a lack of knowledge of critical matters that had, prior to the service of the defendant's witness statements, previously been within the sole knowledge of the defendants.
Prejudice
The matter of delay is not determinative in itself. The proposed amendments have a very real capacity to result in an adjournment of the trial provisionally listed to commence in April 2019. Having regard to the way in which this litigation has progressed to date, it is 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. Such further delay would constitute prejudice in and of itself.
Weakness of the conspiracy case
The proposed conspiracy plea suffers from difficulties at at least two levels. First, in my assessment the 11 matters that are pleaded in par 49I, from which it is alleged that the agreement, joint enterprise or common purpose are to be inferred, provide what can only be described as being very weak support for the inferences which the plaintiff seeks to draw. The same may be said of the 32 overt acts that are pleaded in the particulars to par 49K. Mr Hanna's senior counsel submitted that the inferences for which Mr Stuart contends do not arise from the pleaded particulars. I think there is force in these submissions.
Read either individually or in combination, the overt acts provide only the weakest level of support for the inferences which the plaintiff seeks to draw to sustain the allegations of the existence of discussions in 2006 regarding ways to force the plaintiff out of his employment, or of the agreement, combined joint enterprise or common purpose pleaded in par 49H of the statement of claim.
In making observations on the weakness of Mr Stuart's conspiracy case I do not ignore that the court must exercise the power to strike out a pleading on the grounds that it discloses no reasonable cause of action sparingly and by parity of reasoning, and when considering an application for leave to amend, only disallow the amendment if satisfied that the proposed amendment does not disclose a reasonable cause of action. I have considered whether this is such a case. With some hesitation I do not consider that I can reach the conclusion that Mr Stuart's claim is untenable, see General Steel Industries v Commissioner for Railways.[12] I do, however, reach the conclusion that it is a very weak case, and that is a factor I take into account from a case management perspective and which weighs heavily in favour of disallowing the amendment at this late stage in the proceedings.
[12] General Steel Industries v Commissioner for Railways (1964) 112 CLR 125.
The other level at which there are difficulties with the proposed amendment is the adequacy of the pleading itself. As this is not a matter that is critical to my reasoning I do not propose to deal with the pleading issues at any length. Mr Stuart is required to plead clearly and explicitly what unlawful means he alleges were employed to cause injury and he has not done so. In submissions in reply, Mr Stuart's counsel pointed to the plea in par 47 of the existing pleading as of the unlawful termination of the plaintiff's contract of employment and says those are the unlawful means. This does not constitute an adequate identification of the unlawful means. The unlawful means must be pleaded in precise terms within the metes and bounds of the conspiracy plea itself. In that respect I refer to what was said by Ryan J in Elliott v Seymour. A further difficulty is that there is no plea that the alleged conspirators in fact agreed to use those unlawful means. Agreement between the parties as to the unlawful means to be used is something that should have been pleaded.
A third difficulty with the conspiracy pleading is that causation is pleaded in a summary and inadequate form in pars 49J and 49P. The acts which are relied upon to establish the causal connection need to be pleaded out fully.
As already noted these observations about the pleading are not determinative of this application. If the application had been a pleading summons they are matters which would have warranted striking out of the existing plea, albeit with leave to re‑plead.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JB
ASSOCIATE TO THE HONOURABLE JUSTICE TOTTLE10 JULY 2018
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