Wesfarmers Kleenheat Gas Pty Ltd v Coffey LPM Pty Ltd
[2015] WASC 176
•22 MAY 2015
WESFARMERS KLEENHEAT GAS PTY LTD -v- COFFEY LPM PTY LTD [2015] WASC 176
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 176 | |
| Case No: | CIV:2072/2010 | 15 MAY 2015 | |
| Coram: | CHANEY J | 22/05/15 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Portion of amended defence disallowed Application for disallowance otherwise dismissed | ||
| B | |||
| PDF Version |
| Parties: | WESFARMERS KLEENHEAT GAS PTY LTD COFFEY LPM PTY LTD WA SEAFOOD EXPORTERS PTY LTD |
Catchwords: | Practice and procedure Amendment to pleadings Trial part heard Disallowance of amendments Approach to disallowance |
Legislation: | Nil |
Case References: | Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 Pacific National (ACT) Ltd v Queensland Rail [2005] FCA 535; (2005) 215 ALR 544 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
COFFEY LPM PTY LTD
First Defendant
WA SEAFOOD EXPORTERS PTY LTD
Second Defendant
Catchwords:
Practice and procedure - Amendment to pleadings - Trial part heard - Disallowance of amendments - Approach to disallowance
Legislation:
Nil
Result:
Portion of amended defence disallowed
Application for disallowance otherwise dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr J A Thomson SC & Mr H H Jackson
First Defendant : Dr J T Schoombee & Mr M N Blandford
Second Defendant : No appearance
Solicitors:
Plaintiff : Hardy Bowen
First Defendant : SRB Legal
Second Defendant : No appearance
Cases referred to in judgment:
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
Pacific National (ACT) Ltd v Queensland Rail [2005] FCA 535; (2005) 215 ALR 544
1 CHANEY J: This action concerns responsibility for loss and damage resulting from contamination of a service station site (site) which the plaintiff leased from the second defendant between 1999 and 2004. The first defendant is alleged to have caused or contributed to the contamination as a result of work which it did on the site in late 2004. Each party has cross-claims against both other parties for causing and being contractually responsible for the loss and damage.
2 The trial in this matter was originally listed for hearing for 12 days to commence on 2 February 2015. It became evident at the commencement of the trial that it was far from ready for hearing. Parties had not complied with pre-trial directions, late expert evidence had been filed, and objections to evidence had not been dealt with as required by earlier directions. The expert conferral and joint report process had not been completed and adjournment of the trial was foreshadowed if late expert evidence was to be permitted. Procedural questions were raised concerning a related action containing a claim which could, and should, have been made in these proceedings. Those questions had not been the subject of adequate conferral, and amendments to pleadings were foreshadowed. The related matter involved a claim by the second defendant against the first defendant in this action essentially on the basis upon which the plaintiff claims against the first defendant in this action. The related matter had not progressed beyond the provision of a statement of claim shortly before the trial in this matter was due to commence.
3 The disarray evident at the commencement of the trial invited consideration of its adjournment to enable the parties to identify and deal in an orderly way with outstanding issues. Having regard, however, to the fact that the Court had set aside 12 days for the hearing, I determined that, although it had become inevitable that the trial could not be completed in the available time, the scarce availability of hearing dates in all the Court's jurisdictions demanded that the time set aside be utilised to the extent possible. The trial proceeded but, as it happened, far less progress of the action was achieved than the parties' proposed timetable suggested. By 13 February the evidence of only four lay witnesses had been completed. Those witnesses were Mr Mortley and Ms Huxtable (called by the plaintiff), Mr Cook (called by the second defendant) and Mr D'Ercole (called by the first defendant). The parties were agreed that, rather than embark upon any of the expert evidence, in respect of which there remained outstanding questions of objections and joint conferral, the trial should more efficiently be adjourned to a resumed hearing when dates were available. The parties then estimated that a further three weeks would be required to complete the trial.
4 On 18 February 2015, I made further directions as to steps to be taken in order to ensure that, when the trial resumed, it could proceed efficiently. Amongst the directions which I made were directions for the filing of any amended pleadings on the basis that if a party objected to a pleading, application could be made for disallowance. After producing several versions of an amendment to the first defendant's defence and counterclaim, which were made as a result of conferral between the plaintiff and the second defendant, the first defendant filed a document dated 16 March 2015 and entitled 'Further Amended Further Further Re-amended Defence and Counterclaim'. The plaintiff made an application to disallow certain paragraphs of that pleading. It is those objections to which these reasons are directed.
5 The objections are to paragraphs 40C, 40D and 40E. Each of those paragraphs plead matters which are said to comprise instances of contributory negligence on the part of the plaintiff such as to reduce any damages that might be recoverable from the first defendant by the plaintiff.
The approach to allowance of the amendments
6 The first defendant contends that all of the amendments simply emerge from and rely on identified evidence already led at trial and do not constitute some new case. It relies on the observations of Dawson J in Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd1to the effect that pleadings do not impose so rigid a framework that, where evidence admitted at trial without objection raises fresh issues, the case should not be decided on a basis which embraces the real controversy between the parties. It was said that the pleadings or particulars should be amended so that the record reflects the proceedings as they have been conducted.
7 In response, the plaintiff, referring to Pacific National (ACT) Ltd v Queensland Rail2 as an example, submits that where witnesses have given evidence shaped and directed by the state of the pleadings at the time they gave their evidence, significant amendments which raise issues which can no longer be effectively addressed by those witnesses may cause substantial injustice.
8 I accept that a rigid approach to pleadings should not prevent a determination of the real controversy between the parties. That does not mean, however, that a party should be allowed to introduce, part way through a trial, whatever new issues may potentially emerge from the way evidence comes out. Whether an amendment should be permitted will depend on questions of fairness having regard to all the circumstances of the case.
9 In approaching the question of whether the paragraphs objected to should be disallowed, the approach I would take is as follows.
10 To the extent that the proposed amendment does not constitute a new case, but merely refine the pleaded case having regard to the evidence which has emerged, it should be allowed.
11 To the extent that the proposed amendment is inconsistent with the case which the moving party has run at trial to date, the amendment should be disallowed.
12 An amendment should be disallowed if it is based on evidence which has emerged by reason of the other parties' approach to the evidence on the basis of the pleadings as they stood at the time, if that approach may have been different had the pleadings been in the form proposed by the amendment.
13 If the proposed amendment raises new issues which may open whole new areas of inquiry in the evidence, it should be disallowed. In taking that approach, I am mindful of the fact that this case has already been beset by changes in position by different parties, the trial has already run for two weeks, and the directions for preparation of the balance of the trial have all been predicated upon the existing issues, and in particular the scope of expert evidence.
Paragraph 40C
14 Paragraph 40B picks up, as contributory negligence, paragraphs 28 and 29 of the defence which plead negligence on the part of the plaintiff in failing to provide an accurate layout plan to the first defendant when requested to do so by the first defendant. No objection is taken to paragraph 40B.
15 Paragraph 40C contains a number of subparagraphs. It pleads that the plaintiff contributed to its loss by failing, in or after 1999, to obtain an accurate layout plan from the second defendant. The subparagraphs refer to the role of Mr Mortley. Relying on the evidence given by Mr Mortley, and Mr Cook, it is pleaded that:
(i) Mr Mortley was aware of the importance of obtaining accurate layout plans of the installation of pipework;
(ii) Mr Mortley knew that an environmental assessment of the site would be required before the end of the term of the lease;
(iii) Mr Mortley was in a position to ask for and insist upon the provision of accurate layout plans by Mr Cook, a consultant of the second defendant; and
(iv) during the installation of the pipework in 1999, Mr Cook was also a consultant to the plaintiff in relation to its becoming a lessee of the site and was in a position to insist that the person who installed the pipework provide an accurate layout plan.
16 The plaintiff objects to paragraph 40C on the basis that it pleads an entirely distinct case of contributory negligence from that previously pleaded. The existing pleading is that the plaintiff was negligent in failing to provide the first defendant with an accurate layout plan. That is said to have occurred at the time of the first defendant's engagement by the plaintiff, in 2004 when the contract between the parties was entered into.
17 The first defendant contends that paragraph 40C 'simply explicates' the issues arising under paragraph 28, and specifically, particular (4) of that paragraph. Paragraph 28(4) particularises an allegation of negligence in failing to provide an accurate layout plan as follows:
The Plaintiff failed to obtain an accurate layout plan from the Second Defendant as lessor under the lease.
18 I accept that paragraph 40C pleads, in effect, more particular facts as to the alleged failure referred to in paragraph 28(4). It does not raise a new or different case.
19 A further objection by the plaintiff to the paragraph is that the allegations contained in it were not squarely put to Mr Mortley or Mr Cook during their evidence, and that some questions by the first defendant's counsel to Mr Mortley as to whether he should have asked for a plan in 1999 were the subject of successful objection. It is correct that counsel for the first defendant cross-examined Mr Mortley about whether he had sought to obtain accurate plans of the installation at the time it was done. Objection was taken to a question as to whether Mr Mortley should have asked Mr Cook for plans. The objection was to the effect that the question invited a legal conclusion. Before any ruling was made on the objection, counsel for the first defendant rephrased his question to ask whether Mr Mortley considered it important that an as built plan be obtained. Matters apposite to the proposed paragraph 40C were, therefore, addressed in cross-examination of Mr Mortley.
20 In identifying evidence which the first defendant contends is relevant to, and provides a basis for, paragraph 40C, counsel for the first defendant referred to what he described as the 'able' cross-examination of Mr Cook by junior counsel for the plaintiff. That cross-examination centred upon the provisions of a code of practice for the design and installation of underground petroleum storage systems, and in particular the requirements of the code of practice to obtain as built drawings of installations. In response, the plaintiff contended that that cross-examination illustrates a difficulty in the new plea now sought to be brought against the plaintiff. That difficulty is that a forensic decision was taken to pursue the line of cross-examination of Mr Cook in relation to the code of practice having regard to the pleadings as they stood at the time, and that had paragraph 40C been alleged at that time, that line of cross-examination may not have been undertaken.
21 That submission overlooks particular (4) of paragraph 28 of the defence. In light of my conclusion that paragraph 40C pleads facts encompassed within the broad particularisation in paragraph 28(4), I do not consider that it can be said that the underlying case of the first defendant has changed by the introduction of paragraph 40C. The cross-examination was pursued notwithstanding the existing pleading that the plaintiff was negligent in failing to obtain a plan from the lessor, on whose behalf Mr Cook was acting
22 I would therefore decline to disallow paragraph 40C.
Paragraph 40D
23 Paragraph 40D pleads that the plaintiff contributed to its loss by going into possession of the site under the lease in circumstances where a report which had been obtained by Caltex, the outgoing lessee of the site, at the expiry of its lease, and then provided to the second defendant (the OTEK Report), reported the presence of diesel contamination on the site. It is pleaded that Mr Mortley was aware of that report and that despite limitations as to the extent of testing revealed by the report, he took the position that the site was free of contamination and did not require any further remediation, and failed to take any steps during the currency of the lease to have groundwater tested for contamination. It is pleaded that the plaintiff, through Mr Mortley, thereby contributed to the continued influence of prior contamination of the site.
24 In my view paragraph 40D does introduce potentially new areas of disputation which go significantly beyond what was previously pleaded.
25 The first defendant's case in relation to when it said contamination occurred was the subject of considerable debate on the third day of trial, while the parties were still skirmishing about amendments to pleadings, and no evidence had yet been called. Senior Counsel for the plaintiff raised a concern, which he said arose from the first defendant's opening remarks, about whether the first defendant ran a positive case that the contamination occurred in the Caltex period, being the five years up to June 1999 when Caltex was in possession of the site as lessee. In the course of those exchanges, counsel for the first defendant disavowed any positive case that contamination should be attributed to the Caltex period. Rather, the first defendant's case was that, by reason of certain expert opinion as to the age of the contamination, contamination had been present in the soil from a time which predated the critical date of August 2004 when the first defendant became involved in works on the site. Accordingly, the first defendant's case was: 'it couldn't have been us' that caused the pollution, rather than a positive case as to when the contamination occurred (other than that it was some time prior to 2004).
26 That issue was said to be of importance to the plaintiff because of the plaintiff's alternative claim against the second defendant that contamination occurred during the period in which the second defendant was in possession as lessee, that is between 1999 and 2004. A positive case of contamination prior to 2004 would have required a focus on the specific evidence in relation to the site, and possible sources of contamination pre-1999, which did not fall for consideration on the basis of the existing pleadings.
27 What is proposed in paragraph 40D carries with it the inherent positive allegation that there was contamination during the Caltex period, and that certain steps should have been taken to identify and deal with that contamination. That allegation is a new allegation, and, if the other parties were provided with a fair opportunity of meeting the allegation, it would necessarily require considerable further investigation and expert advice and evidence on the issues which arise in connection with it.
28 Paragraph 40D should be disallowed.
Paragraph 40E
29 Paragraph 40E pleads that the plaintiff contributed to its own loss by failing to inform the first defendant in 2004 that the underground pipes on the site were made of fibreglass. That is said to be important because the service locator set out in the first defendant's proposal to test the site for contamination, does not pick up underground fibreglass pipes. The failure to inform the first defendant of that fact is said to have materially increased the risk of damage of underground pipework by augering, being the mechanism by which the plaintiff claims the site became contaminated.
30 Issues concerning the fact that the pipes installed on the site in 1999 were fibreglass, and that the service locator used by the first defendant did not identify non-metallic pipes, received some attention in the course of the evidence to date.
31 The plaintiff's objection to paragraph 40E is that it raises issues which would have been the subject of cross-examination of the first defendant's witness, Mr D'Ercole, and that the propositions pleaded were not adequately put to Mr Mortley and Ms Huxtable in the context of the specific allegations now sought to be made. The plaintiff further says that even if there was cross-examination in relation to the matter, the proposition pleaded is doomed to fail. That is because it is said that it is an untenable proposition that the plaintiff could be expected to know the capabilities of the contracted expert's service locator and to warn the expert that the pipes were fibreglass.
32 There is force in both of the plaintiff's contentions. It is true that counsel for the first defendant asked both Ms Huxtable and Mr Mortley questions about their knowledge of the presence of fibreglass pipes, and their knowledge of the capabilities of particular service locators. The questions were not, however, asked in the context of a specific allegation of negligent behaviour (in the contributory negligence sense) in relation to those matters. More importantly, had the first defendant's case been pleaded as in paragraph 40E, there may well have been additional or different evidence-in-chief or re-examination in relation to those matters.
33 I also agree that there is little prospect that the plea could successfully support an allegation of contributory negligence. The first defendant was experienced in the task which it was contracted to undertake, and was undoubtedly engaged because of its expertise. It provided for the costs of a service locator in its quotation. Mr D'Ercole, its principal, gave evidence that he was aware at the relevant time that fibreglass pipes were used in some service station installations, although they were a relatively new thing. The service locator which he used was incapable of locating fibreglass pipes. It follows that, if that service locator were used, it would not have located any of the pipes on the site. Pipes were necessarily present. The failure of a service locator to locate pipes could only mean that the pipes were not metallic. The only evidence of an alternative is that they were fibreglass. It is difficult to see how it could be said that responsibility for advising the expert of the presence of fibreglass pipes could be said to amount to a failure to protect the plaintiff's interests.
34 In making the above observations, I note that, as yet, there is no evidence that a service locator was actually used. That does not, however, bear upon the question of what reasonable steps might have been required by the plaintiff's employees in relation to the engagement of the first defendant.
35 In my view, paragraph 40E seeks to introduce an issue not properly addressed in evidence so far and which raises an issue with little or no prospect of success which will simply just delay and distract from the resolution of the real issues in this case. Paragraph 40E should be disallowed.
Conclusion
36 For those reasons, I would dismiss the application to disallow paragraph 40C, but order that paragraphs 40D and 40E are disallowed.
1Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279, 296 - 297.
2Pacific National (ACT) Ltd v Queensland Rail [2005] FCA 535; (2005) 215 ALR 544.
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