Taboas v Abigroup Contractors Pty Ltd

[2013] NSWSC 1230

Supreme Court

New South Wales

Medium Neutral Citation:

Taboas v Abigroup Contractors Pty Ltd [2013] NSWSC 1230

Hearing dates:

23/08/2013

Decision date:

05 September 2013

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1) Grant leave to the defendant to file an Amended Defence in the form annexed to the affidavit of Claire Tingey of 22/8/13, provided that such Amended Defence is filed and served no later than 4pm 30/8/13.

(2) Order the defendant to pay the costs of and occasioned by any amendment.

(3) Reserve all other questions of costs to the trial Judge.

Catchwords:

PROCEDURE - notice of motion - leave sought to file amended defence - whether additional limitation defence affects the factual dispute between the parties and prejudice the plaintiff - whether amended defence is consistent with the overriding purpose of the Civil Procedure Act

Legislation Cited:

Civil Procedure Act 2005
Law Reform (Miscellaneous Provisions) Act 1946
Limitation Act 1969
Workers Compensation Act 1987

Category:

Principal judgment

Parties:

Robert Taboas (P)
Abigroup Contractors Pty Ltd (D1)
VSL Australia Pty Ltd (D2)

Representation:

Counsel:
P Beale (P)
D Benson (1D)
R Gambi (2D)
Solicitors:
CMC Lawyers (P)
Bartier Perry (D1)
Wotton + Kearney (D2)

File Number(s):

2011/171589

Judgment

1. On 25 May 2011, Robert Taboas, the plaintiff, commenced proceedings against Abigroup Contractors Pty Ltd ("Abigroup"), claiming damages arising out of the nature and conditions of his work between 6 June 2006 and 24 October 2006. As well, Mr Taboas claimed that on 24 October 2006, he sustained a frank injury while carrying out his normal work duties as a result of repeated lifting of heavy items such as hydraulic jacks.

1. On 1 November 2011, Abigroup filed a cross-claim against VSL Australia Pty Ltd ("VSL"). Pursuant to the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946, Abigroup claimed, that it was entitled to contribution or indemnity from VSL with respect to the plaintiff's injuries. As well, Abigroup claimed an indemnity pursuant to s 151Z(1)(d) of the WorkersCompensation Act 1987, in respect of compensation payments made by it to the plaintiff.

1. On 17 November 2011, Mr Taboas sought leave by Notice of Motion to file an Amended Statement of Claim. The significant amendment that was proposed was the joinder of VSL as a second defendant.

1. In response, apparently, to a facsimile of 14 December 2011, the contents of which are not in evidence, the plaintiff's lawyers wrote a letter to the lawyers for VSL which included the following:

"The plaintiff's motion is a simple motion to join a defendant to the proceedings. It is not an out of time application or an application to extend a limitation period.

...

The plaintiff has prima facie alleged that the date of discoverability is such that this matter is not out of time. We observe that your client has already been joined to the proceedings as a cross-defendant. Once your client has been joined as an additional defendant, it has the right, should it so elect, to plead a defence pursuant to the Limitation Act. It is respectfully suggested that the subject application is simply an application by the plaintiff to join a defendant in circumstances where a prima facie allegation has been made that the matter is within time. ...

It is respectfully suggested that it is premature at this point for you to seek to resist the plaintiff's application to join your client on the basis that the matter is out of time, and accordingly we are unsure on what basis you could be objecting the plaintiff's application. ..."

1. On 20 January 2012, VSL's lawyers wrote to the plaintiff's lawyers, in the following terms:

"As you know, we object to the joinder of our client as a further defendant to the proceedings on the basis that the plaintiff is statute barred against our client.

...

As you know, we advised the Court at the return of the Notice of Motion on 16 December 2011 before Judge Balla, that the issue of discoverability by the plaintiff pursuant to s 50D and to the Limitation Act 1969 (NSW) was relevant to the potential joinder of our client to the proceedings."

1. On 10 February 2012, the plaintiff's Notice of Motion was heard by Elkaim DCJ.

1. Although the judgment of Elkaim DCJ is not available, it is apparent from the evidence that one of the grounds for opposition by VSL to its joinder to the proceedings was that the claim against it was prima facie statute barred. VSL argued that the claim was "not maintainable" against VSL pursuant to s 50C of the Limitation Act 1969.

1. Elkaim DCJ found that it was appropriate in the interests of justice that VSL should be joined to the proceedings as a second defendant. He made orders permitting the plaintiff to file an Amended Statement of Claim within 14 days.

1. On 6 March 2012, VSL's lawyers sought particulars of the plaintiff's claim.

1. Request 99 of that Request for Particulars was in the following terms:

"These proceedings have been commenced well after three years from the date of the accident. We continue to maintain that your client faces a significant limitation issue having regard to s 50C of the Limitation Act 1969 (NSW).

To enable us to properly consider our position in this regard, please ..."

1. Eight sub-questions dealing the question of why proceedings were not commenced, and questions as to discoverability of the cause of action, obtaining legal advice and the like, were then asked.

1. On 15 May 2012, this letter was responded to by the solicitors for the plaintiff. Insofar as Request 99 was concerned, the answer to the questions was as follows:

"The Limitation Act does not form any basis for the plaintiff's claims. He is not obliged to provide particulars of matters that your client may wish raise in its defence, and which if pleaded, will bear the onus of proving. However, we note that you have previously seen the affidavit of Brendan Moran dated 21 November 2011, setting out the chronology of matters relevant to this issue should it arise."

1. On 6 June 2012, VSL filed a Defence. That Defence did not include any pleading of a limitation defence.

1. The parties agreed to participate in a mediation on 3 December 2012. When the lawyers for VSL were preparing the matter for mediation, it became apparent to them that they had inadvertently omitted to plead the limitation defence in the Defence filed on 6 June 2012.

1. After the mediation was conducted on 3 December 2012, the lawyers for VSL sent an Amended Defence to the plaintiff's solicitors. The letter of 19 December 2012, said:

"The amended Defence seeks to plead a limitation defence which has previously been raised with you.

As you are aware, the limitation point is very much alive and it was argued that the plaintiff's Notice of Motion to join VSL as a second defendant. His Honour Judge Elkaim was of the view that such a matter was appropriate for determination by the trial Judge. VSL has requested particulars relating to the limitation defence which your client has relied on in the affidavit of Brendan Moran dated 21 November 2011." (sic)

1. The letter concluded by asking for the plaintiff's consent to filing the Amended Notice of Defence. No response to that letter has ever been sent by the solicitors for the plaintiff.

1. The mediation was resumed on 28 February 2013.

1. The next scheduled directions hearing was on 24 July 2013. At that directions hearing the issue of filing an Amended Defence, which included a pleading of the expiration of the limitation period, was raised before the Common Law Registrar.

1. There is no transcript of those proceedings. However, Ms Tingey, the solicitor for VSL, has sworn an affidavit, upon which she was not cross-examined, which contained the following version of that directions hearing:

"The matter was listed for directions on 24 July 2013, before Registrar Bradford. VSL sought leave to file the amended Defence. Mr Beale of Counsel appeared on behalf of the plaintiff and advised the Court that the plaintiff did not consent to the filing of the amended Defence, but accepted that VSL would be raising this issue at the hearing on 28 October 2013, and that no prejudice had been suffered by the notification in December 2012 of the amended Defence. As the plaintiff did not consent to the filing of the amended Defence, Registrar Bradford did not grant leave and noted the Court file of the plaintiff's position."

1. Consequent upon that directions hearing, the present Notice of Motion was filed on 8 August 2013, and heard by the Court on 23 August 2013.

1. At the conclusion of the argument on the motion, the Court made the following orders:

"(1) Grant leave to the second defendant, VSL Australia Pty Ltd, to file and serve an amended defence in the form which is Annexure A to the affidavit of Claire Alise Tingey sworn 22/8/13. Order that such amended defence be filed and served on or before 4pm 30/8/13.

(2) Order that the second defendant pay the costs of and occasioned by the amendment.

(3) Costs."

1. At the time of making the orders, the Court indicated that it would deliver reasons in due course. These are the reasons for the orders which were made on 23 August 2013.

Civil Procedure Act 2005

1. Section 64 of the Civil Procedure Act 2005 provides adequate power to the Court to grant leave to VSL to file an Amended Defence: s 64(1) Civil Procedure Act.

1. Section 64(2) of the Civil Procedure Act provides that:

"Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings."

1. The Court is enjoined when deciding whether to grant leave for the amendment of any document to "... act in accordance with the dictates of justice": s 58(1) Civil Procedure Act.

1. In determining what, in a particular case, the dictates of justice require, the Court is obliged to have regard to the provisions of ss 56 and 57 of the Civil Procedure Act. Section 56 provides that the overriding purpose of the Civil Procedure Act and Uniform Civil Procedure Rules in their application to civil proceedings is to "...facilitate the just, quick and cheap resolution of the real issues in the proceedings".

1. Section 57 of the Civil Procedure Act provides that the management of any proceedings in the Court is to have regard to the just determination of the proceedings, as well as the efficient disposal of the business of the Court, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings at a cost affordable by the respective parties.

1. Section 58 of the Civil Procedure Act also provides for a number of matters to which a Court may have regard, to the extent that it considers them relevant. So far as that is appropriate in this case, the matters include the degree of difficulty or complexity to which the issues in the proceedings give rise; the degree of expedition with which the respective parties have approached the proceedings; the degree to which the respective parties have fulfilled their duties under s 56(3) of the Civil Procedure Act, and the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction.

Discernment

1. Ms Tingey's affidavit, and the submissions of Counsel for VSL, support the proposition that the initial omission to plead the limitation defence, was an oversight which did not become apparent until about six months after the defence was filed, when preparations were being made for a mediation of the proceedings.

1. At the time that it became apparent that this inadvertent omission had occurred, the proceedings were about to, or else were in the process of, being mediated. It seems that the approach then taken by the lawyers for VSL was, having informed the plaintiff of their intention to rely upon the limitation defence, to await the completion of the mediation between the parties in the hope or expectation that that mediation would resolve all issues between the parties.

1. The mediation was completed finally on 28 February 2013.

1. This approach was a reasonable one in all of the circumstances. After all, if the matter had resolved at mediation, then considerable cost would have been saved by adopting this approach.

1. There is no evidence as to why the lawyers for VSL failed in the period after the conclusion of the mediation at the end of February 2013, for a period of over four months up until the next directions hearing in the Court on 24 July 2013, to take any steps to file a Notice of Motion to seek leave to amend the Defence. Having regard to the fact that the lawyers had written on 19 December 2012, seeking the plaintiff's consent to the amendment, which letter had not been responded to, I am prepared to infer that the reason why nothing further was done was that the lawyers for VSL did not regard the amendment as being an issue between the parties, and expected that in due course, when the matter was next before the Court, the Amended Defence would be filed.

1. I draw this inference because of the course of dealings between the parties. From the very earliest interaction between the lawyers for the plaintiff and the lawyers for VSL, which occurred when the plaintiff sought to join VSL as a second defendant, it was apparent that VSL would be relying upon a limitation defence. Although the defence which was filed did not raise the limitation defence, it was apparent from December 2012 onwards, that VSL were continuing to rely upon the limitation defence. The absence of any response to their letter of 19 December 2012 would, against that background, have reasonably led to the conclusion, to which I infer the lawyers for VSL came, that there would be no opposition to the amendment, and it could be addressed when the matter was next before the Court. Such an approach would also have ensured the minimisation of legal costs.

1. Accordingly, examining the matter from the perspective of the conduct of the lawyers for VSL, I am persuaded that their failure to include the limitation defence in the original filed Defence, was due entirely to inadvertence, and there is a satisfactory explanation as to why the Notice of Motion formally seeking to file an Amended Defence was not filed until August 2013.

1. It is then a matter of considering what the consequence may be to the plaintiff from this amendment granted at this time, and what the dictates of justice require.

1. The immediate context for this consideration is that the proceedings are fixed for hearing on 26 October 2013.

1. The plaintiff filed an affidavit which sought to describe the prejudice that he would suffer by the filing of the Amended Defence.

1. The affidavit in question, being that of Mr James Doyon, was sworn on 21 August 2013. Mr Doyon, a solicitor in the employ of the solicitor on the record, deposes that he has perused the file, and then makes a number of statements based upon that perusal.

1. Some initial observations are appropriate:

(a)   It is not apparent when Mr Doyon first perused the file, nor whether he is in fact the solicitor with the care, control and management of the file;

(b)   He does not suggest that he has spoken to or discussed the matter with the plaintiff, or even with solicitor on the record for the purpose of the preparation of his affidavit;

(c)   In setting out whether or not the plaintiff is prejudiced by the proposed amendment, Mr Doyon does not articulate or describe any actual prejudice;

(d)   In setting out whether the plaintiff has made any assumption as the basis for his ongoing conduct of the proceedings, in light of the fact that the Defence did not raise the limitation period, Mr Doyon does not suggest that any such assumption was ever made.

1. The relevant parts of the affidavit are as follows:

"9. The plaintiff was entitled to assume that the limitation defence was not seriously relied upon in circumstances where a notice of motion had not been filed and appropriate orders sought in circumstances where case management principles require matters to be essentially prepared at the time matters are set down for hearing.

...

11. It is respectfully submitted that the plaintiff was entitled to assume that the limitation defence was not being seriously raised and has incurred significant legal costs and disbursements in prosecuting his claim in circumstances where his solicitor had formed the opinion that he had strong prospects of success in establishing liability and in circumstances where the limitation was not raised, being a total defence to the claim.

12. It is respectfully submitted that the plaintiff's prejudice cannot simply be cured by a costs order. However, should this Honourable Court hold to the contrary on this point, the second defendant should be ordered to pay the plaintiff's costs to date as between the plaintiff and second defendant on an indemnity basis.

13. It is my respectful submission that in this matter significant costs and disbursements have been incurred by the plaintiff as a result of the second defendant not raising the limitation defence formally, and the only way to cure the prejudice is to refuse the amendment, or to ensure that the second defendant pays the entirety of the plaintiff's costs of the proceedings up until the date of the amendment.

14. It is respectfully submitted that the second defendant has had ample opportunity to formally raise a limitation defence, and has elected not to do so. It is respectfully submitted that the plaintiff was entitled to assume that despite agitating the issue at the Motion seeking to join VSL, the second defendant had decided not to rely on this defence, possibly because of the plaintiff's answers to particulars.

...

17. It is further respectfully submitted that the plaintiff may have decided not to incur significant disbursements or legal costs, and may have conducted the matter differently had a limitation defence been raised."

1. The affidavit then goes on to set out various provisions of the Civil Procedure Act, and make submissions with respect to them. The affidavit concludes with this paragraph:

"27. It is respectfully submitted that the plaintiff will be subject to significant injustice as he has incurred significant legal costs and disbursements and has been conducting his claim in the belief that the limitation defence, being a total defence, was not formally pleaded, and could not be relied upon as Uniform Civil Procedure Rules, r 14.14(3) notes that matters which must be pleaded subject to sub-rule 2 of the said regulation, requires the statute of limitations to be specifically pleaded. It is respectfully submitted that in circumstances where a limitation period is required to be pleaded, but has not been pleaded, until shortly before a trial, the plaintiff is entitled to assume that the second defendant will not be entitled to rely on same when the matter is listed before the Court."

1. Some further observations are necessary. The principal one is that affidavits are not a substitute for submissions and ought not be used to set out submissions and arguments which are to be relied upon in a Motion. The purpose of an affidavit is to provide evidence in admissible form, which setsout facts and matters which are relevant to the issues in dispute.

1. The second observation with respect to this affidavit is that it is not apparent upon what basis of fact the submissions and assertions of prejudice are being made. The affidavit does not seek to give evidence, even on information and belief, of any fact, matter or circumstance which might amount to prejudice.

1. The third observation is that Mr Doyon has used, I assume carefully, the expression with respect to the plaintiff, that he "... was entitled to assume" that VSL was not proceeding with its limitation defence. Mr Doyon does not assert that any specific assumption was in fact made at any point in time. This is hardly surprising. It does not appear from his affidavit that Mr Doyon was the solicitor with the care and control of the matter. It does not appear from his affidavit that he was even employed at the time when the assumptions would have been made, namely between June 2012 and December 2012. As well, the absence of any affidavit from the solicitor on the record deposing to the plaintiff in fact making any such assumption, is telling.

1. Where a party wishes to establish that it has been prejudiced in specific ways, including as to costs, as a consequence of the conduct of proceedings by another party, then it is incumbent upon that party, by proper evidence, to set out in an affidavit what that prejudice is. This affidavit by Mr Doyon does not approach, let alone reach, a sufficient standard of proof of any prejudice whatsoever.

1. In particular, in light of Ms Tingey's unchallenged affidavit evidence as to what occurred before the Registrar, including an apparent concession by Counsel for the plaintiff that the defendant would not suffer any prejudice, the conclusion I would reach is that the use by the plaintiff's lawyers of this affidavit in this form, was intentional, because they could not establish any actual prejudice. Rather, they sought to place argument and submission before the Court which, as is now apparent, was not adequately based on fact.

Discernment

1. The Court is faced with an unchallenged claim on behalf of the solicitors for VSL, that its failure to include the limitation defence was due to inadvertence. The circumstances in which that inadvertence has occurred make it clear that it was always VSL's intention to rely upon such limitation defence. That intention was plainly known to the solicitors for the plaintiff.

1. At the time same, the solicitors for the plaintiff do not advance, by admissible evidence, any evidence of any prejudice which they have suffered as a consequence of the proposed amendment. Nor do they challenge the explanation for VSL that the failure to file the limitation defence was due to inadvertence.

1. What then are the interests of justice? VSL has a properly pleaded Defence. It raises an issue of substance. The plaintiff has been on notice of that issue of substance at all times since the proceedings commenced. No prejudice is proved which would result from allowing the defence to be filed.

1. It is not suggested in submissions, or by evidence, that as a consequence of the Defence being filed, there is factual material or evidence which is now unavailable to the plaintiff. Nor it is suggested that as a consequence of this defence being filed, the hearing of the case will take longer than it otherwise might.

1. In all of those circumstances, I am satisfied that leave to file an Amended Defence can be granted without derogating from the overriding purpose in the Civil Procedure Act. I am satisfied that granting leave to file the Amended Defence will promote the interests of justice by ensuring that all issues of substance between the parties are heard and determined in this particular case, at the hearing.

1. It is for these reasons that the Court pronounced the following orders on 23 August 2013:

(1)   Grant leave to the defendant to file an Amended Defence in the form annexed to the affidavit of Claire Tingey of 22/8/13, provided that such Amended Defence is filed and serve no later than 4pm 30/8/13.

(2)   Order the defendant to pay the costs of and occasioned by any amendment.

(3)   Reserve all other questions of costs to the trial Judge.

**********

Decision last updated: 05 September 2013