The State of South Australia v Spotless Group Limited
[2022] SADC 97
•26 August 2022
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
THE STATE OF SOUTH AUSTRALIA v SPOTLESS GROUP LIMITED & ANOR
[2022] SADC 97
Reasons for Ruling of his Honour Judge Calligeros
26 August 2022
PROCEDURE
Claim for recovery under the Return to Work Act 2014 – Application by the applicant to file and serve a third amended Statement of Claim - Does the proposed Statement of Claim plead a new cause of action and should it be allowed?
1. The proposed amended Statement of Claim seeks to raise a new cause of action in breach of contract which is based upon different facts to those pleaded in the existing statutory recovery.
2. As the proposed new cause of action is not based upon substantially the same facts as the existing cause of action, and as an extension of time in which to bring the new cause of action has not been sought, leave to file and serve a Third Statement of Claim is refused.
Return to Work Act 2014 (SA) s 66; South Australian Employment Tribunal Rules 2022 (SA); Uniform Civil Rules 2020 (SA) r 66, r 67, r 70, referred to.
H Stanke & Sons Pty Ltd v O'Meara [2007] SASC 254; Holcon Australia Pty Ltd v Corporation of the Town of Walkerville [2007] SASC 437; Brook v Flinders University of South Australia (1988) 47 SASR 119; Weldon v Neal (1887) QBD 394; Patelis v Sander (No 3) [2021] SADC 146; Jonathon v Synod of Diocese of Adelaide of Anglican Church of Australia Inc [2021] SADC 51; Savill v Hussain [2020] SADC 155; Swietlik v Central Linen Service (1991) 56 SASR 569; Bloeman v Atkinson [1977] Qd R 291; Trepic v ROH Industries [1991] SASC 2890; Brickfield Properties Ltd v Newton [1971] 1 WLR 862 ; Karasaridis v Kastoria Fur Products (1984) 37 SASR 345; Cutrona v Harnischfeger of Aust. Pty Ltd [1977] VR 306; Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49; Mannix Electrical Pty Ltd v Belport Pty Ltd [2021] SASC 115; Vaccarella v McNicol (1986) 131 LSJS 128 ; Cliff v Quinn (1988) 54 SASR 151 ; Perry J Danae Investment Trust Plc v Macintosh Nominees Pty Ltd (No 2) (1993) 10 ACSR 11 , considered.
THE STATE OF SOUTH AUSTRALIA v SPOTLESS GROUP LIMITED & ANOR
[2022] SADC 97
This decision concerns an application made by the State of South Australia (the State), to file and serve a third Statement of Claim (the Third SOC) in an action for recovery of compensation made under s 66 of the Return to Work Act 2014 (RTW Act) against two respondents (the Action).
Background
The Action concerns injuries sustained by Nicol Green on 23 November 2015 in the course of her employment with the Department for Correctional Services. The State accepted a claim for compensation made by Ms Green who asserts that she slipped and fell on a wet floor. Ms Green has subsequently been found to be a seriously injured worker within the meaning of s 21(2) of the RTW Act.
The Action was instituted by the State on 21 November 2018, two days before the expiry of the limitation period in s 66(7)(g)(ii) of the RTW Act. The State sought and received an extension of time in which to serve the proceeding so it could liaise with the first respondent’s solicitor about amending the name of the first respondent from Spotless Group Limited (SGL), as first pleaded, to Spotless Facility Services Pty Ltd (Spotless).
On 3 September 2019 the State brought an application to amend the identity of the first respondent. On 18 December 2019 I made consent orders allowing a second Statement of Claim (the Second SOC) to be filed with Spotless as first respondent. The order was made on the basis that Spotless neither consented to nor opposed the amendment and reserved its rights “as to any time limitation point for the commencement of an action”.
Para. 3.2 of the original Statement of Claim (the SOC) states that SGL was engaged by the State to provide facilities management services at various locations. Para. 4.3 of the SOC refers to a “subcontract, arrangement or understanding” between SGL and the second respondent, Jaga Nominees Pty Ltd (Jaga), whereby SGL engaged Jaga to provide cleaning services for the State at Yatala Labour Prison, including the holding cells at Holden Hill Police Station where Ms Green was injured.
Para. 5 of the SOC refers to the “contract referred to in subparagraph 3.2” and sets out in general terms, without making reference to an express term in a written contract, what the State asserts were the obligations of SGL. Para. 5.2 of the SOC asserts that SGL was responsible for any work performed by or subcontracted to Jaga.
In these reasons the written agreement between the State and Spotless is referred to as the Cleaning Agreement and the agreement between Spotless and Jaga is referred to as the Subcontract.
The second Statement of Claim
The Second SOC was filed on 23 December 2019. The Second SOC refers to the relationship between the State and Spotless and the relationship between Spotless and Jaga in the same terms as does the SOC.
The Second SOC refers to cl 29.9 of the Cleaning Agreement which provides that Spotless indemnifies the State “against all costs, expenses, losses or damages suffered or incurred by it to the extent that they may arise out of or in connection with a failure by the first defendant (the first respondent) to perform the Facilities Management Services in accordance with the contract”. The Second SOC also refers to cl 25.1 of the Cleaning Agreement under which Spotless is to “bear the risk of and must indemnify the plaintiff (the State) against any liability to or claim by a third party in respect of injury or death of persons or loss of or damage to property”.
To the extent necessary, the Second SOC seeks an extension of time pursuant to s 48(1) of the Limitation of Actions Act 1936 (LOA Act). The grounds in support of an extension of time assert that the State became aware that the first respondent had been incorrectly named after the limitation period had expired and acted promptly to rectify the error. The grounds assert that Spotless will not be prejudiced if the amendment is granted.
A number of interlocutory hearings scheduled in the Action in 2020 were adjourned at the request of the State and with the consent of Spotless and Jaga. Ms Green brought an action in negligence against Jaga in the District Court of South Australia. Mediation was to take place in the negligence action in the latter half of 2020 but did not go ahead.
The parties continued to seek adjournments of interlocutory hearings in the Action in the first half of 2021 to see if the negligence action might resolve. If it did, it would be unlikely that further steps would need to be taken in relation to the Action.
At some point in the latter part of 2021 I was advised that Ms Green had decided to not pursue the negligence action. Given that development, I advised the parties that steps should be taken to prepare the Action for hearing. In early 2022 orders were made that enabled the State to make discovery of Ms Green’s claims files.
In March and April 2022, the State and Spotless corresponded about the State’s wish to file the Third SOC. All interlocutory steps necessary to list a hearing were to be discussed and scheduled at a pre-hearing conference on 10 June 2022. Prior to that date, the State brought an application to file and serve the Third SOC. By the time the application was made the limitation period for an action for a breach of contract had expired.
The proposed Third Statement of Claim
The only cause of action pleaded in the first iteration of the Third SOC is a statutory recovery pursuant to s 66(7) of the RTW Act. After hearing argument on 27 July 2022 I gave the State leave to file and serve a second version of the Third SOC (the Third SOC2) as I apprehended that further amendments would likely be sought. In the Third SOC2 the State expressly pleads as a cause of action a breach of contract by Spotless.
Para. 3.2 of the Third SOC2 is in the same terms as para. 3.2 of the Second SOC save that it refers to the written agreement between Spotless and the State as “the Cleaning Agreement / the contract”.
Paras 3.4 and 3.5 of the Third SOC are new and outline the nature of work performed under the Cleaning Agreement and where it was performed. In the Third SOC2, the terms “facilities management services” and “designated locations”, which are contained in the Cleaning Agreement, are described and particulars of those terms are given.
Para. 5 of the Third SOC appears to try to lessen the confusion in para. 5 of the Second SOC. It is difficult to determine whether the amendment sought goes beyond clarification because there is limited reference to the terms of the Cleaning Agreement and the Subcontract in the Third SOC.
Paras 5.6 and 5.7 of the Third SOC are substantial revisions and refer to cls 29.9 and 25.1 of the Cleaning Agreement respectively. Clause 29.9 provides that Spotless indemnifies the State for any loss or damage sustained by not performing services in accordance with the Cleaning Agreement. Clause 25.1 provides that Spotless indemnifies the State for any loss or damage in respect of personal injury or death.
Para. 5.8 of the Third SOC is new and makes express reference to the Cleaning Agreement. It asserts that the cleaning and hygiene services provided by Spotless had to comply with the requirements of schedule H1, cl. 1.9 and with the Work Health and Safety Act 2012 (WHS Act) and regulations made thereunder. The Third SOC2 provides particulars of paras 5.1, 5.2, 5.3, 5.4, 5.5, 5.8.1, 5.8.3 and 5.8.4.
Para. 5.9 of the Third SOC is new. It asserts that Spotless must “comply with and achieve all contractual obligations” in the Cleaning Agreement and relies upon the terms of the Cleaning Agreement. In the Third SOC2, para. 5.9 is deleted because of the particulars now present in para. 5.
Para. 12 of the Third SOC provides that Spotless was responsible for cleaning the premises where Ms Green was injured under the Cleaning Agreement and the Subcontract. Para. 12 of the Second SOC refers to the Subcontract but does not make reference to the Cleaning Agreement.
Para. 16A of the Third SOC is new and sees the State allege that Spotless breached the Cleaning Agreement, an assertion not made in the Second SOC. The particulars of breach of contract in para. 16A are similar to those asserted in para. 16 of the Second SOC. In the Third SOC2, para. 16A refers to the particulars now provided in para. 5 and describes them collectively as either “the obligation for the management and performance of the second respondent or “the contractual safety obligations”. There is also some additional detail provided in relation to the asserted breaches of contract.
Para. 16B of the Third SOC is new and asserts that Spotless is required to indemnify the State for its liability to Ms Green in reliance upon paras 5.6 and 5.7. Para. 16B is not varied in the Third SOC2.
The remaining changes made by the Third SOC concern the nature and extent of the injuries sustained by Ms Green and the amount of compensation paid to her. Para. 22A seeks recovery of future payable amounts of compensation.
Para. 21B of the Third SOC2 is new and particularises Ms Green’s seriously injured worker status. Spotless had sought that information.
The Second SOC seeks an extension of time to name Spotless as the first respondent, no further or other extension of time is sought in respect of any amendment sought by the Third SOC or the Third SOC2.
Relevant statutory provisions and rules
Relevantly to this matter, s 66 of the RTW Act provides:
(5) If—
(a) compensation is paid or payable under this Act in respect of a work injury;
(b) a right of action exists against a person other than the employer for damages
in respect of the injury, the person by whom the compensation is paid or payable is entitled to recover from that other person the amount of the compensation in accordance with subsection (7).
(6) …
(7) If—
(a) compensation is paid or payable to a person (the injured party) under this Act;
and
(b) the injured party has received, or is entitled to, damages from another person (the wrongdoer) pursuant to rights arising from the same trauma as gave rise to the rights to compensation under this Act; and
(c) the person by whom the compensation is paid or payable under this Act (the claimant) is entitled to recover the amount of the compensation by virtue of subsection (5) or (6),
then the following provisions apply:
(d) the claimant is entitled to recover the amount of compensation paid or payable
under this Act from the wrongdoer or the injured party but subject to the following qualifications:
(i) no amount may be recovered from the wrongdoer in excess of the wrongdoer's unsatisfied liability to the injured party; and
(ii) the claimant must exhaust its rights against the wrongdoer before
recovering against the injured party; and
(iii) no amount may be recovered from the injured party in excess of the amount of the damages received by the injured party;
(e) the claimant must, on giving notice to a wrongdoer of an entitlement to recover compensation under this section, have a first charge, to the extent of the entitlement, on damages payable by the wrongdoer to the injured party;
(f) any amount recovered by the claimant against a wrongdoer under this subsection will be taken to be an amount paid in or towards satisfaction of the wrongdoer's liability to the injured party;
(g) an action for the recovery of compensation under this subsection—
(i) may be heard and determined in proceedings brought in the District Court of South Australia; and
(ii) must be commenced within 3 years after the date of the trauma referred to in paragraph (b);
(h)…
(11) In this section—
damages includes any form of compensation payable apart from this Act in respect of a work injury;
employer includes—
(a) any person who is vicariously liable for the acts of an employer;
(b) any person for whose acts an employer is vicariously liable;
(c) …
Rule 7 of the South Australian Employment Tribunal Rules 2022 (SAET Rules) provides that the Uniform Civil Rules 2020 (UCR) may be applied where an issue or procedure is not provided by the SAET Rules. Pleadings do not feature in many Tribunal jurisdictions and are not dealt with by the SAET Rules.
Given the detailed arguments put in relation to pleadings and the extensive reference made to the UCR it is appropriate to apply the UCR here.[1]
[1] Any reference to a specific rule in these reasons is a reference to the UCR unless otherwise stated.
Relevantly to this matter, r 67.2 provides:
67.2 Pleading rules
(1) …
(2) A pleading must—
(a) set out the affirmative facts relied on by the party to establish the party’s claim or defence to a claim;
(b) identify any statutory provision relied on by the party to establish the party’s claim or defence to a claim or in answer to an allegation of fact by the opposing party; and
(c)give fair notice of the party’s case to the opposing party so as to avoid the opposing party being taken by surprise at or in preparation for trial.
Relevantly to this matter r 69 provides:
69.1 Amendment without consent or leave
(1) Subject to subrule (2), a party may amend a Claim or pleading (but not to introduce an additional party) at any time up to 14 days after the last date on which lists of documents are due to be filed by operation of these Rules or order of the Court.
(2) A party may not amend under this rule if the amendment would add a cause of action that is statute barred or withdraw an admission.
(3) …
69.2 Amendment by consent or with leave
(1) A party may amend a Claim or pleading (including to introduce an additional party)—
(a) by consent; or
(b) with the leave of the Court.
(2) If leave is granted to amend a Claim or pleading—
(a) to add a cause of action that is statute barred;
(b) to add an applicant in respect of a cause of action that is statute barred; or
(c) to add a respondent in respect of a cause of action that is statute barred,
the amendment takes effect on a date fixed by the Court not earlier than the date on which the application for leave to amend was made or foreshadowed unless the Court makes an order under subrule (3).
(3) The Court may order that the amendment relate back to the date on which the claim the subject of the amendment was instituted—
(a) if subrule (2)(a) applies—if the new cause of action arises out of
substantially the same facts as the original cause of action; or
(b) if subrule (2)(b) or (c) applies—if the failure to join the additional party arose from a genuine mistake.
Rule 70.1 provides:
70.1 Request for particulars
(1) A party may by written notice request better particulars of an opposing party’s
pleading.
(2) A request for better particulars must be served within 28 days, or such other period as may be ordered by the Court, of receipt by the requesting party of the pleading in question.
(3) A party who receives a notice under subrule (1) within the time specified under subrule (2) must, within 14 days or such other period as may be ordered by the Court, provide a written response responding in respect of each request by either—
(a) providing better particulars;
(b) offering to provide better particulars and indicating when they will be
provided; or
(c) declining to provide better particulars.
Submissions of the State
The submissions described below all refer to the Third SOC and not to the Third SOC2 as the latter was not produced until after oral argument took place.
In his written submissions, Mr Ambrose, counsel for the State, said that the only interlocutory issue between the parties which is incapable of resolution is whether a breach of contract has already been pleaded. He said that the Third SOC pleads material facts in relation to the Cleaning Agreement and its alleged breach but does not raise a new cause of action. As discovery is still in train and the compass of the amendments sought is narrow, he said that no delay, inefficiency or prejudice to Spotless arises.
Mr Ambrose emphasised in oral submissions that any new facts described in the Third SOC have their genesis in the SOC and/or Second SOC. He submitted that there is a substantial similarity between the basis of the negligence alleged against Spotless from the outset and the basis of the breach of contract pleaded in paras 16 and 16A of the Third SOC.
Mr Ambrose contended that because a breach of contract has always been identified, the question of whether it is categorised as part of a recovery under the RTW Act, or as a separate claim for a breach of contract, is immaterial and a matter to be resolved at the hearing.
As to some of the detail that is sought by the solicitors for Spotless, Mr Ambrose said that detail amounted to asking the State to plead evidence.[2]
[2] See H Stanke & Sons Pty Ltd v O’Meara [2007] SASC 254 at [78] – [80]; Holcon Australia Pty Ltd v Corporation of the Town of Walkerville [2007] SASC 437 at [17] – [18].
Mr Ambrose acknowledged that s 66(7)(b) of the RTW Act only applies if the injured party to whom compensation is paid or payable is entitled to damages due to the same trauma for which compensation is payable. However, he then submitted that s 66(5)(b) is cast in more general terms than s 66(7)(b) and permits a recovery “if a right of action exists against a person other than the employer for damages in relation to the injury”.
Mr Ambrose contended that the Second SOC identifies two causes of action, in negligence against both respondents and in breach of contract against Spotless, however he accepted that the pleadings at present misconceive the nature of the breach of contract action.
Mr Ambrose submitted that the only contract pleaded in the Second SOC and the Third SOC is the Cleaning Agreement. The Subcontract and any contract between Spotless and Ms Green are not referenced. Later he said that the indemnity the State seeks to rely upon was pleaded in the SOC, but that reliance is made clearer by the Third SOC.
In terms of para. 16A of the Third SOC, Mr Ambrose said that the allegations it contains had already been made and all that is sought is to distinguish the particulars of negligence and the particulars of the breach of contract.
If I were to find that a new cause of action has been pleaded, Mr Ambrose submitted that I should then find that the amendments arise out of the same or substantially similar facts within the meaning of r 69.2(3)(a) which permits a cause of action that is statute barred to be added without leave.
As to the absence of an endorsement on the application seeking to invoke r 69.2(3)(a), Mr Ambrose made oral application to rely upon the rule. He referred to Brook v Flinders University of South Australia,[3] where von Doussa J made observations about the predecessor to r 69.2(3)(a).
[3] (1988) 47 SASR 119.
Finally, Mr Ambrose said that he was content for any amendment to be permitted on condition that the State expressly describe the clause or clauses in the Cleaning Agreement relied upon in the particulars of breach of contract in para. 16A of the Third SOC.
Submissions of Spotless
Mr Besanko, counsel for Spotless, said there were two main reasons why the application should be dismissed. First, the Third SOC seeks to introduce a new cause of action which is statute barred. Secondly, by reason of its defects, the Third SOC is liable to be struck out or the subject of further and better particulars and the Court should not exercise its discretion to grant the application to amend.
Mr Besanko observed that further amendments might be proposed and sought by the State and that the present application may not be the end of interlocutory disputation. Mr Besanko sought to agree as a fact that the Cleaning Agreement is 290 pages in length. Mr Ambrose consented.
In his written outline, Mr Besanko gave five reasons why the breach of contract pleaded in the Third SOC is a new cause of action.
First, the only cause of action relied upon in the SOC and Second SOC is a “statutory recovery pursuant to s 66(7) of the RTW Act” while the Third SOC seeks to assert a breach of contract.
Secondly, the Second SOC refers to s 66(7) and to s 5 of the Crown Proceedings Act 1992 but makes no reference to any breach of contract.
Thirdly, a reading of paras [14] to [17] of the Second SOC shows that a breach of contract was not advanced against Spotless. He said that what is there pleaded is a misconceived claim that Spotless was liable to Ms Green for breaching the terms of the Cleaning Agreement, and that the breach gives rise to an entitlement to the State to recover under s 66.
Fourthly, paras [25] and [26] of the Second SOC seek recovery of amounts of compensation paid and payable to Ms Green “in satisfaction of a claim for recovery of compensation”. That language is consistent with a claim made under s 66 and not with a claim for breach of contract.
Lastly, Mr Besanko submitted that the Second SOC does not seek damages for breach of contract.
In further written submissions made after the Third SOC2 was made available, Mr Besanko submitted that the expression “cause of action” in r 69.2(3)(a) has a different and narrower meaning than the concept of a “cause of action” for the purposes of Weldon v Neal. [4]
[4] (1887) QBD 394.
Consideration - A new cause of action?
In Weldon the plaintiff was refused leave to bring multiple new causes of action in addition to an existing action for slander after the limitation periods for the proposed new actions had expired. Weldon stands as authority for the proposition that at common law a court should not exercise its discretion to allow an amendment if doing so would introduce a cause of action which is statute barred. In time, rules of a similar in kind to r 69.2(3)(a) varied the common law position by providing that a new cause of action can be pleaded, despite being out of time, if it arises out of the same or substantially the same facts as an existing cause of action.
Mr Besanko submitted that it is well established that leave to amend a pleading should not be granted if the amendment is likely to be struck out, does not disclose a reasonable cause of action or requires further particulars. He said those principles continue to apply under the UCR.[5]
[5] See Patelis v Sander (No 3) [2021] SADC 146 at [67] per Burnett J; Jonathon v Synod of Diocese of Adelaide of Anglican Church of Australia Inc [2021] SADC 51 at [47] per Deuter J; Savill v Hussain [2020] SADC 155 at [27] – [28] per Schammer J.
In Swietlik v Central Linen Service,[6] Cox J held that although a further injury the plaintiff sought to plead in an amended Statement of Claim was described as an aggravation of an earlier, pleaded lower back injury, the latter injury did not arise out of the same or substantially similar facts:[7]
And that, I think, is the difficulty that faces the plaintiff in this case. His proposed amendment speaks of an "aggravation" of the original injury, but he is really setting up a fresh accident or incident that occurred, apparently, in a different section of the factory and under somewhat different unloading conditions from the first. The two causes of action have this in common, that both allege that the plaintiff was injured by being required to lift or otherwise manhandle laundry bags in circumstances that indicate a failure by the defendant to have proper regard for the plaintiff's safety. The particulars given of the defendant's breach of duty or breach of contract are, in many respects, much the same in each case. However the second incident was a different happening on a different occasion from the first, and seems to rest upon a fundamentally different set of facts, notwithstanding that the master and servant were the same in each case and that there was a degree of similarity between the two incidents.
[6] (1991) 56 SASR 569.
[7] Ibid, 572 – 3.
In Trepic v ROH Industries,[8] Cox J gave the plaintiff leave to amend a Statement of Claim to plead a psychogenic pain disorder in addition to the originally pleaded hand injury. The mental injury was said to have been caused by a foreman telling the plaintiff that he would be dismissed unless he showed that his hand injury was not incapacitating. The amendment was sought after expiration of the limitation period and without seeking an extension of time. Cox J allowed the amendment as his Honour considered that the further cause of action arose out of substantially the same facts as the hand injury and there was no relevant prejudice to the defendant.
[8] [1991] SASC 2890.
In Brook, von Doussa J considered an application to amend under r 53.03 of the Supreme Court Rules 1987 (SCR), the predecessor of r 69.2(3)(a). Each rule is to the effect that to allow a new cause of action to be pleaded out of time, it must arise out of the same or substantially the same facts as the existing cause of action. His Honour made reference to Brickfield Properties Ltd v Newton where Cross LJ said:[9]
…It is enough if the overlap between the two causes “is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action.
[9] [1971] 1 WLR 862 at 880.
In Karasaridis v Kastoria Fur Products,[10] King CJ referred with approval to an article by Susan Campbell entitled “Amendments and Limitations: The rule in Weldon v Neal”.[11] Ms Campbell posthulated that there are two main categories of amendments in scenarios like the present one. The first category concerns ‘change of facts’ amendments where facts are added but the legal categorisation of the claim is not altered. The second category involves a change in the legal categorisation of the claim and the introduction of a new cause of action “in the technical sense”.[12] In analysing a series of decisions of the Victorian Supreme Court commencing in the 1960’s, Ms Campbell concluded that the key focus in those decisions shifted from asking whether a plaintiff was seeking “to put a new factual story, of which the defendant has no prior warning”,[13] to asking if a new cause of action was being introduced by the amendment.
[10] (1984) 37 SASR 345.
[11] Susan Campbell. ‘Amendments and Limitations: The Rule in Weldon v. Neal’ (1980) 54(1) Australian Law Journal 643.
[12] Cutrona v. Harnischfeger of Aust. Pty. Ltd. [1977] VR 306 at 308.
[13] Australian Law Journal vol 54 643 at 650.
The cases referred to in the Campbell article are not directly relevant to this matter. Victoria had no equivalent to the predecessor to SCR r 30.03 when the article was written. However, the change in emphasis the learned author describes is relevant to characterising the amendment and also consistent with Mr Besanko’s submission that King CJ, von Doussa J, Perry J and Olsson J have all separately concluded that the term “cause of action” in the context of rules like r 69.2(3)(a) means the “legal characterisation of the facts” or “the technical form of the action”.[14]
[14] Karasaridis v Kastoria (1984) 37 SASR 345 at 351 per King CJ; Vaccarella v McNicol (1986) 131 LSJS 128 at 135 per von Doussa J; Cliff v Quinn (1988) 54 SASR 151 at 167 per Perry J Danae Investment Trust Plc v Macintosh Nominees Pty Ltd (No 2) (1993) 10 ACSR 11 at 19 per Olsson J. See also Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49 at [1610] per Bleby J.
In Brook von Doussa J observed that minor factual variations may lead a court to conclude that two causes of action arise out of substantially the same facts. In such cases, leave to amend may be granted without requiring a plaintiff to seek an extension of time.[15] However, in an example he gave with facts not dissimilar to the facts in Karasaridis, von Doussa J observed that if the further injury sought to be pleaded does not arise out of substantially the same facts as the pleaded injury, an amendment may still be allowed under the same rule if the plaintiff seeks an extension of time under s 48(2) of the LOA Act in relation to the newly asserted injury.[16]
[15] Under r 53.03 of the SCR, the predecessor of r 69.2(3)(a); (1988) 47 SASR 119 at 123.
[16] Ibid.
The introduction to the Third SOC advises that the cause of action relied upon by the State is a statutory recovery pursuant to s 66(7) of the RTW Act, the same cause of action pleaded in the introduction of the Second SOC. However, the introduction to the Third SOC2 expressly describes breach of contract in addition to statutory recovery.
Mr Ambrose maintains that the State has pleaded a breach of contract from the outset of the Action. It is necessary to analyse the pleadings as they were from time to time to test the submission.
Para. [14] of the Third SOC asserts that Ms Green’s injuries were caused by the negligence of Spotless and / or Jaga, or in the alternative, by a breach of contract by Spotless. Para. [14] of the Second SOC also refers to a breach of contract, but the breach there is said to be by both Spotless and Jaga.
While the Second SOC mentions breach of contract, it does not plead a cause of action in contract. Further, the Second SOC does not seek damages for breach of contract from Spotless. In addition to these obvious matters, the context in which a breach of contract is relied upon in the Second SOC is very different to that context in the Third SOC and Third SOC2.
Paras [5.6] and [5.7] of the Second SOC mention respectively; the contractual indemnity owed by Spotless to the State in cl 29.9 of the Cleaning Agreement if it does not perform the Facilities Management Services as required; and that Spotless bears the risk of, and indemnifies the “plaintiff” against, any liability to or claim by a third party for injury or death. Paras [5.6] and [5.7] must be read by reference to the introductory words of para [5]. Those words make it clear that para [5] sets out the general purpose and effect of the Cleaning Agreement.
It is only when paras [14], [16A] and [16B] of the Third SOC are read along with paras [5.6] and [5.7] that it is made apparent that the State wishes to proceed against Spotless in an action for breach of contract.
Mr Besanko submitted that while paras [5.6] and [5.7] were included in the Second SOC, their role or purpose was to support the statutory recovery by pleading that Spotless breached the contractual obligations that it owed to Ms Green under the Cleaning Agreement. For the following reasons, I accept that submission.
Paras [14] to [17] of the Second SOC assert that Spotless and Jaga each breached their duty of care and the obligations they owed to Ms Green under the Cleaning Agreement. Para 15 pleads that a duty of care was owed top Ms Green by Spotless and Jaga. Para 16 asserts that Spotless and Jaga “breached the duty of care and/or contract” in failing to take reasonable steps to identify, ameliorate and manage the presence of water on the floor. Para 17 asserts that Ms Green suffered personal injury due to the negligence and /or breach of contract of Spotless and Jaga. Those pleadings are all directed to the relationship between Ms Green and Spotless, not that between Spotless and the State. That context, along with the absence of any pleaded breach of contract, lead to the conclusion that the Third SOC seeks to introduce a new cause of action.
The cause of action sought to be introduced is not just a new cause of action, it is of a different nature to the existing statutory recovery action. In most of the cases cited above, the amendment sought to add a further action in negligence to an existing negligence action. The new cause of action pursued here goes beyond that and relies upon a very different legal characterisation of the facts than that originally pleaded.
Should the new cause of action be allowed?
In Karasaridis the plaintiff claimed damages for a back injury allegedly sustained whilst lifting a box at work in November 1980. Subsequently, and after the relevant limitation period had expired, the plaintiff sought to amend the Statement of Claim to allege an earlier back injury. The court disagreed about whether pleading the earlier injury gave rise to a new cause of action. King CJ said that it did, Jacobs J held that it did not. Zelling J did not express a concluded view on the issue. Zelling and Jacobs JJ allowed the amendment as they considered that it had not been established that the defendant would be prejudiced by it. King CJ disagreed. His Honour considered that the earlier injury was different from the later, originally pleaded injury as it was based upon a cumulative strain rather than a single traumatic event. An extension of time was therefore required but had not been pleaded. His Honour considered that the court had no power to allow the amendment.
As von Doussa J observed in Brook, the question whether an extension of time is granted is dealt with at the substantive hearing. His Honour said that a court may entertain a submission made by a defendant that an attempt to secure an extension of time will inevitably fail. If that submission is accepted, the amendment may be refused on the basis that to allow it would be futile.[17] If however there is an arguable case for granting an extension of time, the amendment should be allowed and the issue resolved at trial.
[17] Ibid, 124 – 5.
In this case, the State seeks to introduce a new cause of action but has elected not to seek an extension of time in which to do so. The amendment has not been sought on the alternative basis provided for by r 69.2(2)(a).
In Mannix Electrical Pty Ltd v Belport Pty Ltd, although the amendment sought concerned the date on which an event occurred and did not “in any way affect the underlying factual basis of the contractual relationship between the parties”, Parker J refused it as a change of that date would bring additional transactions into the scope of the litigation.[18]
[18] [2021] SASC 115 [82].
I have found that while the State had previously asserted a breach of the Cleaning Agreement, it had not sought to rely upon that breach in pursuance of a cause of a separate cause of action to a statutory recovery. That position would be altered if the Third SOC is allowed.
In my view it is not appropriate to allow the State to pursue a new cause of action in the absence of claiming an extension of time. To dos so would be futile in the sense intended by von Doussa J in Brook.
Mr Besanko referred to Bloeman v Atkinson where Hanger CJ held that if a document like a contract is relied upon in a pleading, the party relying upon the document should clearly identify what is relied upon:[19]
A plaintiff is not entitled to tell a defendant that his case is based on an identified document (which may contain five or fifty paragraphs – the number does not affect the principle) and leave the defendant to work out for himself what particular paragraph he thinks the plaintiff may be basing his case on. He is entitled to be told what the plaintiff says was the effect of the portion of the document which he relies on.
[19] [1977] Qd R 291 at 295.
Para. 16A of the Third SOC is vague in that it does not make any reference to the terms of the Cleaning Agreement relied upon. In addition, it does not comply with r 67.2(2) as it does not give fair notice of the State’s case and of the provisions in the Cleaning Agreement said to have been breached. The further detail given in relation to the Cleaning Agreement in the Third SOC2 appears to remedy or ameliorate the deficiency.
Remaining issues
Mr Ambrose submitted that if I found against the State on the two key issues as I have, the only further and better particulars issue that remains concerns para. 5 of the Second SOC. Mr Ambrose also made the point that the Defence filed by Spotless makes reference to the Cleaning Agreement in a general way, as if it was “set out in full herein”.
The parties may need some time to consider their respective positions. Further directions will be given on 14 September at 10am.
Orders
1.The application to file and serve a third Statement of Claim is dismissed.
2.The applicant is to pay the respondent’s costs of and incidental to the application.
3.List for telephone directions on 14 September 2022 at 10am.
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