Williams v AusNet Electricity Pty Ltd (Ruling No 1)

[2015] VSC 659

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI  2014 05296

STEVEN ELLIOT WILLIAMS

Plaintiff

v

AUSNET ELECTRICITY PTY LTD

HUME CITY COUCIL

ACTIVE TREE SERVICES

First defendant

Second defendant

Third defendant

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JUDGE:	T FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 November 2015
DATE OF JUDGMENT:	18 November 2015
CASE MAY BE CITED AS:	Williams v AusNet Electricity Pty Ltd & ors (Ruling No 1)
MEDIUM NEUTRAL CITATION:	[2015] VSC 659

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PRACTICE AND PROCEEDURE – Pleadings - Proposed amendment to statement of claim – Expansion of claims alleged – Objections – Principles relevant to application to amend – Test for determining whether amendment futile – Some evidence capable of supporting the allegations in the proposed amended pleading – Amendments allowed - Supreme Court (General Civil Procedure) Rules 2005 r 36.01.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff	Mr G. Dalton Mr A. Fraatz	Maddens Lawyers
For the first defendant For the second defendant For the third defendant	Ms L. Nichols Mr M. Hooper Mr R. Andrew	Herbert Smith Freehills DLA Piper Wotton + Kearney

HIS HONOUR:

1. This proceeding was issued by writ and statement of claim on 1 October 2014.  The second and third defendants were joined by the first defendant’s defence on counterclaim as a party to the proceeding.  They were joined as defendants on 19 January 2015. 

1. Orders for discovery were made on 8 April 2015 and in due course a total of more than 20,000 documents were discovered.

1. Review of the documents was delayed somewhat by difficulties associated with electronic processing.  Eight thousand of AusNet’s August discovered documents were not available for review until early September 2015.  Understandably, this review took some time.

1. Following the review, the plaintiff asserts that he considered it necessary to amend his statement of claim. The plaintiff’s written submissions read: ‘The plaintiff considered it necessary to make amendments to the pleading to ensure that the real questions in the controversy between the parties are decided’. This picks up the language of Rule 36.01(a) of the Supreme Court (General Civil Procedure) Rules 2005, to which I shall return later in these reasons.

1. The plaintiff served a proposed Second Amended Statement of Claim on the parties on 12 October 2015. 

1. On 12 October, by consent, I made an order as follows:

Unless any party notifies the plaintiff of an objection to its proposed Second Amended Statement of Claim by 4.00pm on 23 October 2015 the plaintiff has leave to file and serve a Second Amended Statement of Claim in the form proposed by 26 October 2015.

1. On 23 October, the third defendant, Active Tree Services, objected to the proposed Second Amended Statement of Claim, particularly proposed paragraphs 22C and 22G. I reproduce those paragraphs:

22C. At all material times, Ausnet’s procedures required assessors conducting assessments of vegetation outside the clearance space in the course of pre-summer tree inspections:

(a)         to have the following knowledge and experience:

(i)     a sound knowledge of horticulture and/or agriculture;

(ii)   completed an approved horticulture/arboriculture course; and

(iii)     at least 3 years’ experience in the field assessing trees.

Particulars

VEM 20-02; clauses 4.1 and 3, definition of “Field Officer/Field Assessor”.

(b)         to identify and assess hazard trees in the normal course of conducting the pre-summer tree inspections, by:

(i)     prior to 15 March 2010, identifying any tree that was considered a threat to any AusNet electrical asset (VEM 20-03, issues 1 to 4);

(ii)   from 15 March 2010 to 17 February 2011, identifying any tree that was considered a threat to any Ausnet electrical asset, and which was assessed to be a Rating 3 or 4 Hazardous tree pursuant to VEM 20-01 (VEM 20-03, issue 5);

(iii)     from 18 February 2011 to 15 February 2012, identifying any tree that was considered a threat to any AusNet electrical asset, and which was assessed to be a Rating 4 or 5 Hazardous tree pursuant to VEM 20-01 (VEM 20-03, issue 6);

(iv)     from 16 February 2012, carrying out at every opportunity only a quick visual inspection of the adjacent vegetation from the location where they had positioned themselves to view the clearance space for the purpose of identifying any obvious hazard tree, being any tree that was considered a threat to any AusNet electrical asset, and which was assessed to be a Rating 4 or 5 Hazardous tree pursuant to VEM 20-01 (VEM 20-03, issues 7 to 9).

(c)         To complete and submit a Tree Assessment – Hazard Span or 56M Span Form upon identifying and assessing a hazard tree in accordance with (b) above.

Particulars

(i)     VEM 20-02; cl. 4.1.1;

(ii)   VEM 20-03;

A          issues 1 and 2; cl. 4.5, sub-heading, ‘Hazard trees’;

B           issues 3 to 6; cl. 5, sub-heading, ‘Hazard trees’;

C           issues 7 – 8: cl. 6.24.1; and issue 9: cl. 6.25.1, sub-heading, ‘Hazardous Tree Rating Criteria’;

(iii)     the Tree Assessment – Hazard Span or 56M Span Form is Ausnet document VEM 20-01A (AST.400.009.2081).

22G. To be competent to inspect for, identify and assess hazard trees, an assessor conducting pre-summer tree inspections requires appropriate training in the inspection and identification of hazard trees (Appropriate Training).

Particulars

Appropriate Training is that necessary to enable a person without any previous arboricultural qualifications or experience to be able to identify signs that a tree was potentially a hazard tree that required assessment by a qualified arborist. Appropriate training would include:

(i)     a visual tree assessment training course, such as that offered by QTRA;

(ii)   an appropriately designed in-house training course conducted by a qualified arborist;

Additional training in tree risk assessment would enable an inspector to both identify and assess potentially hazard trees. Such training would include:

(iii)     a tree risk assessment training course, such as that offered by QTRA;

(iv)     an appropriately designed in-house tree risk assessment course conducted by a qualified arborist.

The knowledge, training and expertise required by Field Assessors under VEM 20-02 also amounted to Appropriate Training.

Negotiations between the parties did not result in a satisfactory pleading formula.  By the directions before me on 17 November 2015, the first and second defendants did not object to any proposed amendment.

1. Paragraph 22C of the proposed Second Amended Statement of Claim is directed by the plaintiff at AusNet.  It alleges AusNet’s procedures required assessors conducting vegetation assessments during pre-summer tree inspections and outside the clearance space to have certain knowledge, training and experience (‘the expertise’).  This is said to arise from the definition of Field Assessor in the Vegetation and Easement Management Document VEM 20-02.  The definition of Field Assessor is a ‘person who has a sound knowledge of horticulture/arboriculture, who has completed an approved horticulture/arboriculture course with at least three years’ experience in the field assessing trees.’  VEM is an acronym for Vegetation and Easement Management. As I understand it, VEM 20-02 is an internal AusNet document which set out the management procedure for hazardous trees.[1]  

   [1]All VEM series documents are internal AusNet documents.

1. I shall turn to the third defendant’s objections.

1. An analysis of the affidavit filed by Mr Andrew Marinkovic on behalf of the third defendant discloses three objections. Counsel for the third defendant argued all three together. The first objection is that there is no proper basis to proposed paragraph 22C. The third defendant contends that the allegation that AusNet’s procedures required assessors conducting pre-summer tree inspections to have this particular expertise has no evidentiary foundation.  In short, the third defendant asserts that the VEM 20-03 does not require the assessors to have the impugned expertise. The first defendant does not make the same objection. The plaintiff’s response to the third defendant is that it does not allege that VEM 20-03 makes this requirement of assessors.  The basis for the allegation is the definition of ‘Field Assessor’ contained in VEM 20-02,  to which I have already referred.

1. The second objection also relates to paragraph 22C.  It asserts that the expertise pleaded under proposed paragraph 22C(a)(i)-(iii) is irrelevant to Active Tree Services contractual arrangements with the first defendant.  The plaintiff responds –

(1)that the third defendant had a duty to report to AusNet any hazardous trees it observed while performing its normal contracted duties owed to AusNet (see AusNet’s Distribution Network Clause: 1.9);

(2)AusNet’s procedures required AusNet to assess vegetation outside the clearance space to identify hazardous trees.  Its assessors, including those supplied by the third defendant, therefore required expertise to identify hazardous trees outside the clearance space;

(3)the proposed amendment is also relevant to the allegation made in paragraph 82(aa) of the proposed Second Amended Statement of Claim: that Active Tree Services failed to ensure persons engaged by it to do pre-summer inspections under the Services Agreement had appropriate training.

1. The third objection relates to paragraph 22G of the proposed Second Amended Statement of Claim.  That paragraph alleges that to be competent in the pre-summer assessment of hazardous trees, an assessor requires appropriate training.  The third defendant objects on the basis that neither the Service Agreement nor VEM 20-03 required assessors to inspect, identify or assess hazardous trees.  The plaintiff responds by:

(1)pointing to the assessments for hazard trees conducted by Active Tree Services under the Service Agreement – clause 1.9.

(2)alleging that AusNet’s procedures required it to assess vegetation outside the clearance space to identify hazardous trees as part of its pre-summer inspections. The plaintiff contends that VEM 20-03 required the identification, assessment and reporting to AusNet of hazardous trees.  These allegations, the plaintiff says, are also contained in paragraphs 22A, 22C(b) and (c) of the proposed Second Amendment Statement of Claim and are not objected to by the third defendant.

Principles relevant to an application to amend

1. Rule 36.01 of the Supreme Court (General Civil Procedure) Rules 2005 provides that 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.  This discretion may be exercised, inter alia, for the purpose of determining the real question in controversy.[2]  In AON Risk Services v Australian National University,[3] the High Court set out various principles in relation to amendments of pleadings.  Those principles have been conveniently summarised by Vickery J as follows:

   [2]Supreme Court (General Civil Proceedure) Rules 2005 r 36.01(a)

   [3]AON Risk Services v Australian National University (2009) 239 CLR 175.

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

   (b)       The extent of wasted costs that will be incurred;

   (c)Whether there is an irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for whatever costs may be awarded;

   (d)Concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;

   (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.[4]

   [4]Namberry Craft Pty Ltd v Watson [2011] VSC 136.

2. Referring to these principles, J Forrest J noted an addition to this non-exhaustive list:

It is well established that an amendment will not be allowed if it is ‘so obviously futile that it (would) be struck out if it appeared in an original pleading’.[5]

On this type of application a court will not ‘engage in an examination of the merits of the case foreshadowed by the proposed amendment, but where that amendment introduces a patently hopeless issue for determination then its inclusion will be futile and that will be a significant, and probably decisive matter in the exercise of the court’s discretion’.[6]

[5]Matthews v SPI Electricity Pty Ltd & ors (Ruling No.6) [2012] VSC 70 citing Horton v Jones (No.2) (1939) 39 SR NSW 305; 310; see also CAN 074 971 109 & anor v The National Mutual Life Association Australasia Ltd [2010] VSC 186, [29].

[6]Matthews v SPI Electricity Pty Ltd & ors (Ruling No.6) [2012] VSC 70, at [33].

1. In careful submissions Mr Andrew, for the third defendant, took me to the affidavit of Andrew Marinkovic and numerous documents exhibited to that affidavit.  The thrust of Mr Marinkovic’s affidavit and the submissions made was that the allegations sought to be incorporated in the proposed amended paragraph 22C and 22G were demonstrably incorrect, and there was therefore no proper basis for the amendment.  I have set out in paragraphs [9] to [11] of these reasons the objections and the responses thereto. Mr Andrew guided me through the various parts of 14 documents that were said to determine AusNet’s hazard tree clearing obligations and thus to define the relationship between AusNet and Active Tree Services in this respect. These documents were exhibited to the Marinkovic affidavit. 

1. Having considered the arguments of the interested parties, I have concluded that I ought allow the proposed amendments.  I accept that the definition of the phrase ‘Field Assessor’ only came to light during the recently completed discovery process, and I further accept that it was this discovery that gave impetus to the amendments contained in paragraphs 22C and 22G.  It is true that there may be additional costs and delay incurred by allowing the amendment, however this is a very large piece of litigation and I doubt that any additional complexity and/or costs will assume a disproportionate significance in the overall perspective. I also doubt that the evidentiary implications of paragraphs 22C and 22G will result in great inefficiencies from a case management perspective. 

1. The primary argument advanced was that there was no proper basis for the allegations sought to be pleaded.  I am simply not satisfied of this.  The third defendant must demonstrate that the allegations made are ‘obviously futile’. I do not accept that they are.  It is insufficient to show that they are inherently weak or tenuous, or that the evidence that underpins them is at odds with other evidence in the case. It is conceivable that the plaintiff might be able to make something of the definition of Field Assessor in VEM 20-02. Equally, there may well be a complete answer to it on the basis of the documents that Mr Andrew submits control and define the relationship between AusNet and his client. At this stage I simply cannot say. All I can say is that I do not consider the impugned amendments to be an exercise in obvious futility.

1. If there is some evidence capable of supporting the allegations made in the amended pleading then it will be determined at trial.  As I am to be the judge who hears the trial, I doubt that it is sensible to say more.  Accordingly, I will allow the amendments sought by the plaintiff in the Second Amended Statement of Claim.