Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyd's, London

[2011] VSC 370

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 2008 of 05957

ULTRA THOROUGHBRED RACING PTY LTD (ACN 103 106 207) trading as BAREE STUD	Plaintiff
v
THOSE CERTAIN UNDERWRITERS AT LLOYD’S, LONDON, members of Syndicate 2001 for the 2005 underwriting year of account	Defendant
and
PAT LADHAMS	Second Defendant
and
ANGUS O McKINNON	Third Defendant

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JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATES OF HEARING:	3, 4 August 2011
DATE OF RULING:	4 August 2011
CASE MAY BE CITED AS:	Ultra Thoroughbred Racing v Those Certain Underwriters & Ors (Ruling)
MEDIUM NEUTRAL CITATION:	[2011] VSC 370

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Action against veterinarian and horse owner – Application to amend – Particulars of loss – Principles – Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Sandbach	FrancisDaniel Lawyers
For the Second Defendant	Mr G Burns	Ryan Carlisle Thomas Lawyers
For the Third Defendant	Mr S Shaw	Meridian Lawyers

HIS HONOUR:

1. At the commencement of the trial the plaintiff made application to amend the particulars of loss in its claims against both the second defendant and the third defendant.

1. In its claim against the second defendant, Mr Ladhams, and the third defendant, Dr McKinnon, the plaintiff seeks to amend the particulars of loss, in effect to reduce the credit given to the defendants in respect of an insurance payout by taking into account legal expenses associated with securing the payout.

1. In the claim against the third defendant, Dr McKinnon, the plaintiff seeks to amend the particulars of loss to include a claim for veterinary and like expenses incurred in endeavouring to save the mare:

The plaintiff’s particulars of loss and damage are as follows (the Plaintiff will give credit for the insurance payout from the first defendant of $100,000 less its costs of $22,365.25.

As against the 3^rd Defendant:

C.Loss arising from the Plaintiff not exercising its rights under clause 9 of the Sale Agreement: $250,000 cash paid to the 2^nd Defendant.

D.     Veterinary expenses: $91,642.43 calculated as follows:

a.16/6/06: Horse sling from Care for Disabled Animals, $7,605.63;

b.27/5/05: Invoice from Dr Redden for $31,000 (AUD equivalent);

c.20/6/05: Invoice from Dr Redden for $43,000 (AUD equivalent);

d.March 05: Goulburn Valley Equine Hospital (“GVEH”) invoice for $1017.70 of which half was for Sound Action;

e.March 05: GVEH invoice for $644.40;

f.April 05: GVEH invoice for $3658.50 of which half was for Sound Action;

g.June 05: GVEH invoice for $7,053.30.

1. The power to grant an amendment to the particulars is contained in Order 36, Rule 1(1) which relevant parts read as follows:

For the purpose of

(a)determining the real question and controversy between the parties to any proceeding the court may at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.

1. The authorities relevant to an application such as this are well-known; I mention a few: The Commonwealth v Verwayen,[1] State of Queensland v JL Holdings Pty Ltd,[2] Etna v Arif,[3] Howarth v Adey[4] and Aon Risk Services Australia Ltd v Australian National University (‘Aon’).[5]

   [1][1990] 170 CLR 394.

   [2][1997] 189 CLR 146.

   [3][1999] 2 VR 353.

   [4][1996] 2 VR 535.

   [5](2009) 239 CLR 175.

1. With the decision in Aon the High Court has emphasised that applications such as these should not be granted without appropriate judicial scrutiny and should not be granted as a matter of course. In Aon, the High Court held as follows, as I set out (with one change) in Perpetual Trustees Australia Limited v Schmidt & Anor:[6]

(a) courts must now consider the wider public interests and the efficient use of limited court resources when deciding whether to grant applications to amend pleadings;

(b) parties will not be permitted to raise any arguable case in any stage of proceedings subject only to payment of costs; and

(c) amendments that produce delay impact on the entire court system and affect parties desirous of utilising that particular court system.

[6][2010] VSC 67, [112].

1. In Aon, the High Court said:

An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases…

A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to the parties having a sufficient opportunity to identify the issues they seek to agitate.

In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.[7] (emphasis omitted)

[7](2009) 239 CLR 175, 217, [111] – [113].

1. Aon demonstrates[8] that there are a number of factors relevant to an application such as this.  For instance:

(a)whether there will be a substantial delay caused by the amendment;

(b)the extent of any wasted costs;

(c)whether there is an irreparable element of unfair prejudice caused by the amendment;

(d)concerns of case management arising from the stage in the proceeding when the amendment is sought;

(e)whether the grant of the amendment will lessen public confidence in the judicial system; and

(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.

[8]See Namberry Croft v Watson [2011] VSC 136 [38].

1. It is, however, to be remembered that the primary question still remains: what do the interests of justice dictate?  Aon reminds us that the prism through which these interests are viewed is wider than just that of the moving party.

1. Here, it seems to me, the following matters are relevant to the amendment sought by the plaintiff of the particulars of loss:

(a)The Nature of the Amendment.  This is not an allegation of a new claim or cause of action made in the middle or towards the end of the trial, it is simply - and I use that word in its broadest sense – a variation of the plaintiff's particulars of loss.  True it is that neither matter had been adverted to, in the sense of the provision of particulars, prior to the commencement of the trial.  Nevertheless, it does not raise any new cause of action or plead something substantially different to that which had been alleged earlier.

(b)When the Application Was Made.  Notwithstanding orders made by Daly AsJ last year for the provision of a fresh set of particulars and the filing of those particulars, this application was  made at the commencement of the trial, a five to seven day trial.  Whilst it would have been preferable for the application to have been made to an associate justice prior to the commencement of the trial, it is not as though this amendment has been deliberately delayed or has been brought at the end of the trial or towards its end.

(c)Explanation.  In relation to both amendments, the plaintiff says that these matters were overlooked and that when new counsel came into the proceeding shortly prior to the commencement of the trial, it became clear that the amendment should be made.  This explanation needs to be viewed in the light of the orders made last year by Daly AsJ.  It is, in my view, not a particularly acceptable explanation but nevertheless, a poor explanation by itself should not prevent a party from litigating a point, provided that the interests of justice are protected.

(d)Prejudice.  I am not satisfied that the third defendant will suffer any real prejudice if I permit the claim against him to include the veterinary expenses itemised in the amended particulars of loss.  True it is, as was ably pointed out by his counsel, that issues related to causation and the reasonableness of the incurring of the expenses may arise: however there is, in my view, an underlying reality that has to be borne in mind, namely:

First, the third defendant Dr McKinnon is a highly experienced veterinary surgeon able to give instructions as to the reasonableness or otherwise of the expenses at, one would think, relatively short notice.  Second, Dr McKinnon, it can be reasonably surmised, is familiar with the treatment of this mare at the clinic at which he practises.  The treatment was carried out at the clinic under the supervision of one of his partners, as I so far understand the evidence.  The treatment of the mare by Dr Redden, whilst not one of the partners, was also conducted at the clinic.  It is fair to assume that Dr McKinnon, in the preparation of this case, is well familiar with the treatment of this horse, both before and after the horse passed his examination.  Thirdly, the bills that were delivered to the plaintiff on behalf of the veterinary clinic, which form part of the particulars, have been well-known to Dr McKinnon.  True it is that Dr Redden's bills did not come from the clinic but again, his involvement is a matter that does not take Dr McKinnon or his lawyers by surprise.

(e)Delay.  It is not likely that the trial will be delayed to any real extent if I grant these amendments.  The court will not sit next Thursday and Friday and this will give the defendants any additional opportunity they require to consider whether they wish to call any further evidence to contradict the matters the subject of amendment.  If there is a matter that arises out of the amendment that requires further cross-examination I will give leave to recall the relevant witness.  As I apprehend the situation, it is likely to only apply to Mr Buckley who will not be excused once he completes his evidence.

1. I accept readily that the bringing of a claim at late notice is most undesirable but nevertheless, the question is whether there is any real prejudice in the scheme of this trial.  At the present time I am unable to see any real prejudice in relation to this amendment.

1. I am somewhat less confident about the claim for the solicitor's fees incurred in pursuit of the insurance payout.  This is a matter which had not been adverted to in any previous documentation between the parties and it seems to have been raised as an afterthought on the part of the plaintiff's counsel.  However, it does seem to me that it is an arguable allowance that may need to be made and that any real contest may ultimately be over what are relatively minor matters, such as the actual costs incurred in relation to securing the payout as opposed to costs involved in the prosecution of the claim as a whole.

1. Notwithstanding my disquiet over the way the matter has surfaced, I am still of the view that, given the conduct of this trial, any prejudice will be minimal.

1. In summary, I propose to grant the amendments sought by the plaintiff, subject to the following direction: that the supporting material in relation to the amendment relevant to the insurance payout and the legal costs associated with it be provided by 4.15 p.m. this afternoon.  If the material is not provided, or is so inadequate as to render the granting of the amendment questionable, I will hear further argument about it but I emphasise the material must be provided by 4.15 this afternoon.