Wise v Chu Underwriting Agencies Pty Ltd [No 4]
[2016] WADC 84
•3 JUNE 2016
WISE -v- CHU UNDERWRITING AGENCIES PTY LTD [No 4] [2016] WADC 84
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WADC 84 | |
| Case No: | CIV:1051/2001 | 1 APRIL 2016 | |
| Coram: | HERRON DCJ | 3/06/16 | |
| PERTH | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Orders made to strike out pleadings and for leave to re-amend defence | ||
| PDF Version |
| Parties: | DOUGLAS RANKIN WISE CAROL JANETTE McKEOWN DOROTHY MARGARET WISE CHU UNDERWRITING AGENCIES PTY LTD |
Catchwords: | Insurance Policy of indemnity Amendments to pleadings Defence Strike out application |
Legislation: | Nil |
Case References: | Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Second Plaintiff
CAROL JANETTE McKEOWN
Third Plaintiff
DOROTHY MARGARET WISE
Fourth Plaintiff
AND
CHU UNDERWRITING AGENCIES PTY LTD
Defendant
Catchwords:
Insurance - Policy of indemnity - Amendments to pleadings - Defence - Strike out application
Legislation:
Nil
Result:
Orders made to strike out pleadings and for leave to re-amend defence
Representation:
Counsel:
Second Plaintiff : Mr G J Pynt
Third Plaintiff : Mr G J Pynt
Fourth Plaintiff : Mr G J Pynt
Defendant : Mr M J Feutrill
Solicitors:
Second Plaintiff : Momentum Legal
Third Plaintiff : Momentum Legal
Fourth Plaintiff : Momentum Legal
Defendant : Moray & Agnew
Case(s) referred to in judgment(s):
Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281
- HERRON DCJ:
Preliminary
1 On 13 November 2015 I delivered oral reasons for decision in relation to the plaintiffs' application to strike out certain paragraphs of the defendant's further amended defence dated 21 May 2015 and also in relation to the plaintiffs' application that the defendant provide further and better particulars of the further amended defence as requested.
2 I ruled that the application to strike out that part of par 17 of the further amended defence by which the word 'approved' was sought to be substituted for the word 'engaged' be allowed and ordered that par 17 be struck out.
3 I adjourned the hearing to 20 November 2015 to allow the parties' time to confer with a view to agreeing a minute of proposed orders to reflect my ruling. However, when the parties next came before me on 20 November, they had been unable to reach agreement and sought further time to discuss any outstanding matters between themselves with a view to ultimately agreeing a minute of proposed consent orders. Accordingly, I adjourned the matter sine die.
4 Regrettably, the parties were unable to agree a minute of proposed orders which flowed from my reasons and the matter came back on for further argument before me on 1 April.
History of the action
5 This action has had an extended history. By writ of summons dated 26 April 2001 the action was commenced on behalf of the first and second plaintiffs. On 13 June 2002 the first plaintiff's action against the defendant was compromised by a consent judgment (par 1 of the amended statement of claim). In 2004 the third and fourth plaintiffs were added as parties to the action. Since then there have been significant periods of no or little activity followed by various interlocutory disputes about the state of the pleadings. On 10 February 2010 Wager DCJ delivered written reasons for decision in which she granted the plaintiffs' application for leave to amend the substituted statement of claim.
6 The action then proceeded to a trial of issues before Yeats DCJ on 15 and 16 June 2011 and on 27 July 2011 her Honour answered the four issues for determination. That decision was then appealed to the Court of Appeal and on 15 June 2012 the court set aside the answer to issue 4 and otherwise dismissed the appeal.
7 As I observed in my oral reasons given on 13 November 2015, after the Court of Appeal decision was delivered it seems not much happened for a significant period of time until the defendant brought an application to strike out the action for want of prosecution. That seems to have then led to the plaintiffs filing an application to amend the statement of claim. Those applications came on for hearing before Sweeney DCJ who delivered written reasons for judgment on 2 April 2015 dismissing the defendant's strike out application and granting the plaintiffs leave to amend the statement of claim in accordance with a minute of proposed amended statement of claim dated 17 March 2014. In accordance with Sweeney DCJ's orders an amended statement of claim was filed on 7 April 2015 followed by the defendant's further amended defence to the substituted statement of claim filed on 21 May 2015.
The issues
8 Both parties have filed minutes of proposed orders. The defendant has also filed a minute of proposed further re-amended defence dated 18 November 2015 which I am informed was drafted in response to my ruling. By that minute the defendant seeks to introduce pars 16B, 16C and 17A.
9 By its amended statement of claim dated 7 April 2015 the second to fourth plaintiffs (the plaintiffs) claim that by a policy of insurance for the period 30 April 1998 to 30 April 1999 the defendant agreed to indemnify the plaintiffs in respect of damage to units erected on lots in a strata plan during the period of insurance by payment, or at the defendant's option, by Reinstatement, Replacement or Repair which is described as the Reinstatement, Replacement or Repair Option (par 15). The plaintiffs then plead that the defendant by its servants or agents instructed Carroll to repair the damage to the units and that Carroll completed certain repair works. The plaintiffs further plead that by reason of the factual background the defendant elected to exercise the Reinstatement, Replacement or Repair Option (the Election).
10 Paragraphs 16A to 16C, 17 and 17A of the minute of proposed further re-amended defence are in the following terms:
16A. In or about March to August 1999, the defendant, through Robertson, agreed to pay for the costs of repair work in respect of Cyclone Damage, where Robertson approved the repair work and the contractor and the first plaintiff agreed to allow the contractor to enter on the Common Property to effect the repair work.
16B. In or about March or April 1999, Robertson approved Carroll (as defined in paragraph 17 below) as a contractor to carry out approved repair work on the Common Property.
16C. In or about March to June 1999, Robertson and the first plaintiff agreed that Carroll was to carry out approved repair work on the Common Property and the first plaintiff agreed to allow Carroll to enter onto the Common Property to perform that work (as defined in paragraph 17 below as the Carroll Repair Work).
Particulars
- A. In or about April to June 1999 the second plaintiff represented to Robertson and other representatives of the defendant that he was the caretaker for the first plaintiff.
B. In or about April to June 1999 Carroll and representatives of Robertson inspected the Common Property and Carroll prepared various undated documents entitled 'Scope of Works' particulars of which are given in paragraph 17.A below.
C. Robertson approved the repair work set out in the documents entitled 'Scope of Works'.
D. In or about April to June 1999, the second plaintiff agreed, purportedly on behalf of the first plaintiff, that approved repair work would be carried out by Carroll and the second plaintiff would provide reasonable access to the Common property and to allow such repairs to proceed.
17. In or about March or April 1999, Robertson engaged John Carroll's Building & Maintenance (Carroll) to effect certain repairs to Cyclone Damage (Carroll Repair Works) and agreed with Carroll that the defendant would pay any invoice rendered by Carroll in respect of those works (Carroll Contract).
Particulars of Carroll Repair Works
Reinstatement, Replacement or Repair
- A. The Carroll Repair Works are set out in various undated Carroll documents entitled 'Scope of Works'.
17A. It is to be inferred from the facts pleaded in paragraphs 15 to 17 above, that the first plaintiff and the defendant agreed, in effect, that the Carroll Repair Works were to be carried out for and on behalf of the first plaintiff and the defendant agreed to indemnify the first plaintiff for the cost of those repair works under the terms of the contract of insurance pleaded in paragraphs 8(a), 8(aa) and 8(ab) above.
11 Although the minute which was filed refers to 'the second defendant' in par D that is an error and should read 'The second plaintiff'. I have corrected the error in setting out the proposed amendments.
12 The defendant goes on in par 18 to plead:
By reason of the facts pleaded in paragraphs 15 to 17A, the first plaintiff, as principal, and Carroll made a contract to carry out the Carroll Repair Works and the defendant agreed to pay for such works under the terms of the contract of insurance pleaded in paragraphs 8(a), 8(aa) and 8(ab) above.
13 At the hearing before me on 1 April the plaintiffs' counsel submitted that the proposed new pars 16B, 16C and 17A did not advance the matter any further and essentially gave rise to the same issue which had arisen because of the previously pleaded par 17, which I disallowed, ruling that par 17 cannot be amended by the substitution of 'approved' for 'engaged'. The submission is that the proposed pars 16B and 16C, by which it is pleaded the second plaintiff agreed on behalf of the first plaintiff that repair would be carried out by Carroll, is inconsistent with the plea in par 17 that Robertson engaged Carroll. The plaintiffs do not object to a plea that Robertson engaged Carroll as agent for the first plaintiff but do object to a plea that the first plaintiff directly engaged or agreed with Carroll or that the second plaintiff, as agent for the first plaintiff, contracted with Carroll. The plaintiffs do not object to the defendant being able to plead that when Robertson on behalf of the defendant engaged Carroll he was doing so on behalf of, or as agent for, the first plaintiff, but they do object to a plea that the second plaintiff on behalf of the first plaintiff engaged Carroll, which, it is submitted, is inconsistent with the plea in par 17 that it was Robertson who engaged Carroll and when it is pleaded at par 15 that the defendant engaged Robertson.
14 Further objection is taken to par D of the particulars of par 16C by which it is sought to plead 'the second plaintiff agreed, purportedly on behalf of the first plaintiff, that approved repair work would be carried out by Carroll', because it is not pleaded with whom the second plaintiff agreed.
15 Paragraphs 16B, 16C and 17A seek to plead, it is submitted, that the first plaintiff and the defendant agreed that the Carroll repair work was to be carried out for and on behalf of the first plaintiff which, it is submitted, is inconsistent with the plea in pars 16A and 17 that the defendant through Robertson agreed to pay for the costs of repair work and that Robertson engaged Carroll to effect the repairs.
16 Further, the plaintiffs submit that by pars 15 – 18 of its amended defence dated 10 February 2011 (the version of the defence before the further amended defence to the substituted statement of claim dated 20 May 2015) which pleaded that the defendant engaged Robertson who in turn engaged Carroll, and the defendant agreed to indemnify the first plaintiff under the contract of insurance, the contract with Carroll being entered into by the defendant, as agent, for the first plaintiff, as principal, the defendant is permitted to run a case that Robertson, or the defendant, was an agent for the plaintiffs when they entered into the contract with Carroll, but, it is not permitted to run a case that the first plaintiff and the defendant agreed that the Carroll Repair Works were to be carried out for and on behalf of the first plaintiff. The plaintiffs submit that such a case is inconsistent with the plea of engagement by the defendant of Robertson and by Robertson of Carroll. It is a different case from that which the defendant has always pleaded.
17 The defendant's counsel submits that the defendant's case has always been that Robertson engaged Carroll but the true nature of the relationship between Carroll and the plaintiffs was that there was an agreement between the strata company, the first plaintiff, and Carroll, the legal effect of which was that the defendant agreed to indemnify the first plaintiff for the cost of repairs. The defendant's case is that it only agreed to indemnify the plaintiffs for the cost of repairs, it did not elect to exercise the Reinstatement, Replacement or Repair option.
18 In summary therefore, the defendant says it is entitled to put its case on the basis the legal consequence of all of the factual circumstances is that there was a contractual arrangement between Carroll and the strata company, the first plaintiff, through the agency of the defendant and Robertson by which the defendant agreed to indemnify the plaintiffs for the cost of repairs undertaken by Carroll. The plaintiffs object to the defendant being able to plead that the first plaintiff entered into an agreement with the defendant by which the defendant agreed that Carroll would perform the repair works on behalf of the first plaintiff. The plaintiffs do not object to the defendant being able to present a case that there was only an agreement to indemnify and that there was an agency agreement between Robertson, Carroll and the first plaintiff, that is, when Robertson on behalf of the defendant engaged Carroll he was doing so on behalf of or as agent for the first plaintiff.
The pleadings
19 When on 13 November 2015 I ruled that the defendant could not amend par 17 of its defence by substitution of the word 'approved' for 'engaged' because it was arguable that such an amendment sought to withdraw an admission of fact which is relevant to the relief sought by the plaintiffs and which is potentially a matter materially affecting the position of the parties, I emphasised that my determination of that issue was only for the purposes of the interlocutory application and was a matter which remained a live issue between the parties at trial as to whether or not the pleading in par 17 and the use of the word 'engaged' meant the defendant contracted with the builder Carroll. The defendant submitted, and continues to maintain the position, that there was no withdrawal of an admission and that its pleaded position has always been that the defendant never elected to exercise the reinstatement, replacement or repair option and that it never contracted with Carroll, it only agreed to indemnify the plaintiffs by meeting the costs of the repair work to be performed by Carroll. As I understand the defendant's position, when it pleaded in par 17 that Robertson engaged Carroll it means that Robertson approved Carroll. It is not an admission that the defendant contracted with Carroll through the agency of Robertson.
20 As I attempted to make clear in my oral reasons of 13 November 2015, whether par 17 as pleaded constitutes an admission that the defendant engaged, in the sense that the defendant contracted with, Carroll, is ultimately a matter for determination by the trial judge having heard all the evidence.
21 I also have regard to par 18 of the defence as previously drafted by which it is pleaded 'the Carroll Contract was entered into between the defendant, as agent, for the first plaintiff, as principal, and Carroll' which in my view is consistent with a reading of par 17, that when the defendant engaged Carroll it contracted with Carroll.
22 It is extraordinary that 15 years after this action was commenced issues remain between the parties regarding the state of the pleadings. One of the main difficulties caused by such a significant delay is the reliability of witnesses' memories of what was said and done over 17 years ago. In this case that difficulty is compounded by the fact that the builder who performed the repair works, Mr Carroll, will not be able to give evidence at the trial because he has died. This action, assuming it is unable to be settled, must proceed to trial without any further delay and without ongoing disputes as to the state of the pleadings.
23 I have regard to the following observations of Martin CJ in Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281 [5] – [10]:
In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions.
Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met.
In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the Court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained.
In this case, I have reviewed the statement of claim and the objections to it and I have done so in the case management context to which I have referred. It is my view, that many of the objections which have been taken are pedantic and pettifogging in nature. In many cases, elucidating and resolving the objection would consume an amount of time and resources, which is entirely disproportionate to the benefit to be derived from that process in terms of the identification of the true issues which have to be met in the case.
In many cases, consideration and determination of each objection would give rise to precisely the type of time and resource wasting forensic exercise which the Commercial and Managed Cases List was created to discourage. That is not to say that buried within those voluminous objections there might not be a criticism that should be properly be seriously entertained, but having looked myself at the statement of claim, it is my view that any lawyer looking at that pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, would have no difficulty in ascertaining those matters.
24 While the District Court does not have a case management practice to the same extent as the Supreme Court, the observations of his Honour Martin CJ are pertinent and applicable to the role pleadings play in the District Court. While I accept the amendments to the pleadings have raised important issues which it has been necessary to address and resolve, the point has been reached when further time taken up with objections about the pleadings cannot be justified and this action must be finalised, either by settlement or determination after trial.
Conclusion
25 While the proposed further re-amended defence is not an easy pleading to follow, it seems to me the issues which are to be tried, and which have been further ventilated and clarified in the hearings before me on 9 November 2015 and 1 April 2016, and which are understood by the parties so that they know the respective cases they must meet at trial are:
1. Whether the defendant entered into a contract with Carroll for Carroll to perform the repair work or whether the contract was entered into between the first plaintiff and Carroll;
2. Whether there was a contractual relationship between the first plaintiff and Carroll and the defendant and the first plaintiff by which the defendant agreed to indemnify the first plaintiff for the cost of repairs performed by Carroll, i.e. pay the cost of the repairs;
3. Whether par 17 is an admission the defendant through its agent Robertson engaged, in the sense contractually engaged, Carroll to perform the repair works or whether the defendant simply approved Carroll undertaking the repair works which did not give rise to any contractual relationship between the defendant and Carroll; and
4. Whether the defendant elected to exercise the reinstatement, replacement or repair option or whether it only agreed to indemnify the first plaintiff by agreeing to pay for the cost of the repair works to be performed by Carroll.
26 If I have not properly understood the issues between the parties, or I have not properly identified the issues, the parties should agree a statement of the issues to be determined.
The proposed further amendments
27 The proposed par 16B seeks to plead that Robertson approved Carroll (as defined in par 17 below) as the subcontractor to carry out approved repair work. However, par 17 does not refer to Robertson approving Carroll and does not define how Robertson approved Carroll. Paragraph 17 pleads Robertson engaged Carroll. The separate pleas of Robertson 'approving' Carroll and 'engaging' Carroll are inconsistent and apt to confuse. In my view par 16B adds nothing to par 17.
28 The defendant is not permitted to plead par 16B.
29 As to par 16C the wording 'Robertson and the first plaintiff agreed that Carroll was to carry out approved repair work' is unclear and confusing. It is uncertain whether by the plea it is being alleged the first plaintiff and Carroll contractually agreed Carroll was to carry out the repair work or whether it is being pleaded the first plaintiff simply agreed in the sense that he gave Carroll permission or allowed him to carry out the repair work in the way that it is later pleaded 'the first plaintiff agreed to allow Carroll to enter onto the common property'.
30 By par D of the particulars, it seems that it was intended by par 16C that the first use of the word 'agreed' means a contractual agreement, that is, that the second plaintiff entered into a contract on behalf of the first plaintiff that Carroll carry out the repair work. However, that plea does not sit comfortably with the plea in par 17 that Robertson engaged Carroll, although I acknowledge one of the issues to be determined at trial is what is meant by 'engaged' and is it an admission the defendant contracted with Carroll. It is also a different case to that which has previously been pleaded. It has not previously been pleaded that the second plaintiff entered into a contract with Carroll as agent for or on behalf of the first plaintiff.
31 If the intention of the proposed pleading is that although Robertson engaged Carroll, that is, Carroll was engaged by Robertson as the agent of the defendant, there was some sort of agency agreement by which there was a contract between the first plaintiff and the defendant, as is pleaded in the proposed par 17A, the basis for that needs to be more clearly pleaded. That is, the pleading needs to be consistent with the plea in par 17 that Robertson engaged Carroll. If what is proposed is that although Robertson engaged Carroll there was some type of agency agreement which existed by which the legal consequences are that the first plaintiff and the defendant agreed that Carroll would perform the repair works on behalf of the first plaintiff, that factual basis needs to be clearly pleaded.
32 In my view, par 16C as drafted, does not establish a sufficient factual basis for the proposed plea in par 17A. Neither is it clear to me that the proposed plea in par 17A adds anything to what is pleaded in par 18. Therefore I do not allow the defendant to plead pars 16C and 17A. But the defendant is permitted to present a case that the defendant did not agree to indemnify the plaintiffs by electing to exercise the Reinstatement, Replacement or Repair Option but only agreed to indemnify the plaintiffs by agreeing to pay for the repair works completed by Carroll, which is what I understand is pleaded at par 18.
Costs
33 I then turn to deal with the issue of costs. The defendant submits that the plaintiffs ought pay 50% of the defendant's costs of the plaintiffs' application. The plaintiffs' submit the defendant ought to pay two thirds of the plaintiffs' costs of the application.
34 To a significant degree the plaintiff was successful in his application. In the hearing before me little time was spent in relation to the application seeking to compel answers to the plaintiffs' request for further and better particulars of the amended defence and much of what was sought fell away. The majority of the argument was directed towards the proposed amendment to par 17 of the defendant's further amended defence. The plaintiffs were successful in relation to that issue.
35 I order that the defendant pay two-thirds of the plaintiffs' cost of its application dated 26 June 2016 and to include the hearings on 20 November 2015 and 1 April 2016.
Orders
36 Consequent upon these reasons and my earlier oral reasons delivered on 13 November 2015 I make the following orders:
1. The defendant's amendments to par 17 of the further amended defence to the substituted statement of claim be struck out.
2. The defendant be given leave to file a further re-amended defence to the substituted statement of claim to be filed no later than 14 days from today.
3. Within 7 days the defendant file and serve its answers to pars 1, 2, 13, 14, 22, 31, 32 and 33 of the plaintiffs' requests for further and better particulars of the defendant's further amended defence dated 18 June 2015.
4. The plaintiffs' application dated 26 June 2015 be otherwise dismissed.
5. The defendant pay two-thirds of the plaintiffs' costs of the application, including the appearances on 20 November 2015, 1 April 2016 and today.
37 I will otherwise hear from the parties as to how this action should be progressed.
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