Concrib Pty Ltd v Cumner Contracting [2022] QSC 50 [2022] 15 QLR

SUPREME COURT OF QUEENSLAND CITATION: Concrib Pty Ltd v Cumner Contracting [2022] QSC 50 PARTIES: Concrib Pty Ltd (respondent) v Cumner Contracting (applicant) FILE NO/S: SC No 7251 of 2020 DIVISION: Trial PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED EX- TEMPORE ON: 22 March 2022 DELIVERED AT: Brisbane HEARING DATES: 21, 22 March 2022 JUDGE: Henry J ORDER: 1. The Defendant have leave pursuant to Rule 188 to withdraw such admissions as are contained in its defence filed 7 September 2020 to permit the filing of its amended defence filed 22 October 2021. 2. The Claim be amended pursuant to Rule 377 to reflect that the name of the Defendant is Cumner Contracting Pty Ltd. 3. The Defendant pay the Plaintiff’s costs of meeting the application to be assessed on the standard basis. CATCHWORDS: PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT – PLEADING – LEAVE TO WITHDRAW ADMISSIONS – where the defendant, the operator of the quarry supplied rocks to the plaintiff to be used in a residential development in a gabion wall – where the rocks allegedly started to weather and disintegrate – where the whole structure was replaced – where the plaintiff commenced a proceeding against the defendant for damages for breach of contract, negligence or misleading and deceptive conduct – where the defendant made application for leave to withdraw four admissions contained in its defence – where a proposed amended defence was sent to the plaintiff who did not respond – where the plaintiff later advised the defendant leave was required by the court to withdraw the admissions – where the defendant also made an oral -- 1 of 7 -- 2 application to amend its name in the claim – whether leave to withdraw admissions pursuant to r 188 of the Uniform Civil Procedure Rules (Qld) 1999 should be granted in all of the circumstances Uniform Civil Procedure Rules 1999 (Qld), r 188 Hanson Construction Materials Pty Ltd v Norlis [2010] QSC 34, cited Rigato Farms v Ridolfi [2000] QCA 292, cited COUNSEL: G Radcliff for the applicant/defendant D Williams for the respondent/plaintiff SOLICITORS: Legacy Legal for the applicant/defendant Mills Oakley for the respondent/plaintiff HIS HONOUR: The defendant to a claim in the Supreme Court applies for leave, pursuant to rule 188 Uniform Civil Procedure Rules 1999 to withdraw four admissions contained in its defence. The defendant, the operator of a quarry, supplied rocks to the plaintiff, a constructor of retaining walls and erosion control systems. The rocks were used at a residential development in a gabion wall structure, a gabion being a cage filled with rocks. The structure was evidently intended as a hydrological system to cascade stormwater runoff in order to prevent erosion. The rocks allegedly started to weather and disintegrate, and in the end result, the structure was wholly replaced, allegedly resulting in a loss of $752,118.38. That amount is claimed by the plaintiff as damages for breach of contract, negligence or misleading or deceptive conduct. The claim was filed on 3 July 2020, the defence on 7 September 2020 and the reply on 21 September 2020. A mediation conducted on 15 July 2021 did not resolve the matter. It was flagged at or soon after mediation that the defendant intended to file an amended defence. The proposed amended defence was sent to the plaintiff’s lawyers on 26 August 2021. Rather than amend the existing paragraphs of the defence, the amended defence was a complete repleading of the defence. Its content was inconsistent with four admissions that had been made in the defence. The proposed amended defence was sent with this request: “I would be grateful if you could please advise whether your client objects to the filing of the amended defence. If so, please advise me of the basis of any such objection.” This request was never met with a direct answer; instead, in an email of 8 October 2021, the plaintiff’s lawyers simply asked when the defendant intended to file the amended defence. The defendant’s lawyer, on returning from annual leave, advised on 21 October 2021, against that background, that it was assumed there was no objection and the amended defence would shortly be filed. It was filed on 26 October 2021. -- 2 of 7 -- 3 It was not until 21 January this year, after the issue of a case flow intervention notice by the court, that the plaintiff’s lawyers announced they were taking the point that the defendant needed to seek the Court’s leave to withdraw the admissions. Even then, the point about that step was not accompanied by any indication of whether or why the plaintiff would resist such an application. Rather, it was made in the context of it being the first step in a series of steps involving completion of disclosure, exchange of expert reports, the holding of another mediation by 30 August 2022 and, should the mediation fail, the filing of a request for trial date. Those orders were made by Williams J on 1 February 2022 and the present application was made consistently with them. Against that background, it was unsurprising the defendant’s counsel effectively characterised the plaintiffs now-announced resistance to the grant of leave as ringing hollow. It remains, of course, that it is for the defendant to secure the court’s leave and, as Margaret Wilson J observed in Hanson Construction Materials Proprietary Limited v Norlis & Ors [2010] QSC 34 [16], such leave is not obtained for the asking. However, the defendant’s historical absence of communication of any prejudice, indeed the continuing absence of positive evidence of prejudice, is a relevant consideration. The absence of positive evidence of prejudice is, of course, not determinative and there is nothing improper about a plaintiff not wanting to lose the inherent advantage of admissions to aspects of its case. Wilson J’s observations in Hanson highlighted a variety of other potentially relevant considerations. One of particular importance emphasised in other authorities, such as Rigato Farms v Ridolfi [2000] QCA 292, is the explanation provided for why an admission was made and why it now needs to be withdrawn. That explanation has here by advanced by Mr Tan, the solicitor with carriage of the defendant’s case. He explains: “[6] …In or around early September 2020, I initially drafted and filed the defence based upon instructions from the defendant in which the main issue (at the time) was that the defendant alleged that no specifications or durability requirements were given to the defendant in relation to the rock aggregate and no information was given in relation to the intended purpose of the rock aggregate. [7] Then, in or around June 2021, after the engagement of counsel and further discussions with the director of the defendant, it became apparent that there was a secondary live issue in dispute, specifically that the defendant only provides one type of rock aggregate product and that the plaintiff, on the defendant’s case, well knew that the defendant supplied only one rock aggregate product.” Mr Wright, the sole director of the defendant, affirms that explanation, though frankly that is scarcely necessary. It is quite apparent from the particular admissions to which I now turn that they are not driven by any factual revelations and, with one exception to which I will later return, they go to the meaning and the effect of the agreement between the parties. Putting it another way, they are the product of a realisation the defence was not pleaded in such a way as to properly define the real issues in dispute. Moving specifically to the admissions, firstly, the statement of claim at paragraph 14 pleaded: -- 3 of 7 -- 4 “[14] In the premises, it was an express term of the contract that the aggregate rock provided by the defendant to the plaintiff would be gabion rock suitable for the express purpose of use in gabion walls for the structure.” Paragraph 11(a) of the defence admitted it was an express term of the contract that the aggregate rock would be gabion rock. However, paragraph 11(b) denied the allegation the rock would be suitable for the express purpose of use in gabion walls. The amended defence pleads, at paragraph 10: “[10] With respect to paragraph 14 of the statement of claim concerning the express terms, the defendant says: [i] The defendant supplied the rock product for no express or implied purpose; [ii] Repeats that the term “gabion rock” is a non-sequitur or misnomer; [iii] The rock product which it supplied was the same rock product as it had provided to the plaintiff on numerous occasions for an excess of 10 years; [iv] Repeats that it knew nothing of the structure as alleged in paragraph 4 hereof.” The plaintiff submitted this was an evasive pleading. But it is not so when read in the context of the paragraphs preceding it. They explain the point repeated in paragraph 10(2) that the term “gabion rock” is a non-sequitur or misnomer. By way of illustration, paragraph 5(3) of the amended defence explains: “That the word “gabion” is a non-sequitur or misnomer for the plaintiff’s product, as the gabion process is reference to the retention of rocks of all description in a caged environment.” Further, paragraph 2(2) of the amended defence contains the defendant’s assertion that: “As the plaintiff well knew, the defendant supplied only one rock aggregate product, namely a rock product which can vary in size and dimension from 100 millimetres to 250 millimetres (the rock product), and some much smaller drainage rock products which were entirely different to the rock product.” The issue now more correctly identified, and which would, in any event, have arisen as an issue at trial, is whether or not in an agreement to supply the rock, its description as gabion rock conveyed some special meaning as to its suitability for the special purpose of using the rock within gabion cages. In any event, the admission at paragraph 11(a) of the defence could never have carried the effect the plaintiff would seek to hold the defendant to in light of the denial at paragraph 11(b) of the defence. For all of these reasons, leave should be given to withdraw that admission. -- 4 of 7 -- 5 The second and third admissions to which I turn arise in connection with parts of paragraphs 15 and 16 of the statement of claim. Specifically, paragraph 15(a) alleged it was an implied term of the contract to supply the rocks, that the defendant, its servants and agents would: “…exercise the reasonable care and skill of a competent quarry and supplier of aggregate rocks so as to avoid economic loss to the plaintiff.” To this, the defence pleaded at paragraph 12(a) that the allegation was admitted. Similarly, paragraph 16(a) of the statement of claim alleged the defendant, its servants and agents owed the plaintiff a duty of care to: “…exercise the reasonable care and skill of a competent quarry and supplier of aggregate rock so as to avoid economic loss to the plaintiff.” Again, the defence pleaded at paragraph 13(a) that the allegation was admitted. Both admissions are at odds with the defendant’s position that it assumed no special obligation or duty to the plaintiff merely by agreeing to supply the same rock product it had long supplied to the plaintiff. Again, the admissions did not, in any event, rest comfortably with the subparagraphs following them, for in each instance the defendant pleaded the plaintiff’s failure to convey the specific intended use or purpose. Such information obviously had been relevant to whether the defendant assumed some special obligation regarding the quality of the rock and whether it would be fit for the plaintiff’s intended purpose for it. For these reasons, I am again readily satisfied that leave to withdraw the admissions should be given. The fourth and final admission to which the application relates is the exception I said I would return to. Paragraph 3(d) of the statement of claim pleaded that at all material times the defendant: “…was and is vicariously liable for the conduct of its employees and servants.” This was admitted in the defence but the amended defence instead pleads, at its paragraph 3: “[3] The defendant does not plead to paragraph 3(d) of this statement of claim, as it is an allegation relating to a matter of law.” The plaintiff asserts that the allegation was at best a mixed statement of fact and law. No evidentiary explanation for the change in pleading on this issue was deposed to. However, it cannot be an inviolable rule that such an explanation is required by affidavit evidence. That is because, in some cases, the explanation may logically be inferred from the past and proposed pleadings. This is such a case. The reason for the admission and the seeking of leave to withdraw it is readily inferred from the respective versions of the pleadings to which I have referred. Whether the defendant was or was not vicariously liable for the conduct of its employees and servants would inevitably depend upon the particulars of the conduct. An admission of vicarious liability is an admission of a conclusion of law, of realistically no value unless it -- 5 of 7 -- 6 is related to conduct which is relevant in the proceeding and to which vicarious liability can, at law, attach. The plaintiff’s argument, in effect, that the admission is also an admission of fact lacks substance given its own pleading of vicarious liability at its 3(d). It was not supported, as rule 149(2) requires, by the pleading of material facts in support of the pleaded conclusion that the defendant was vicariously liable for conduct of its employees and servants. It is not so supported elsewhere in the statement of claim, not even by inference, through subsequent pleaded reference to particular conduct by particular employees. Rather, the pleading of conduct later found in the statement of claim is effectively of corporate conduct, that is to say, the conduct of the business generally. This renders the admission of the standalone pleading of vicarious liability contextually valueless, unqualified as it is by reference to the conduct to which it allegedly applies. Against that background, I readily infer the admission was not really made in error but if not withdrawn, its continuance would jeopardise the expeditious resolution of the real issues. That is because of the risk of the admission letting loose a false issue which would invariably be accompanied by confusion at trial as to what unknown, unpleaded conduct the admission supposedly related to. To hold the defence to this admission of the plaintiff’s allegation would ignore that the plaintiff’s allegation is itself not supported by sufficient material facts to give it relevant meaning in the case. This would ignore one aspect of the rules while applying another aspect of them without regard to the rules’ overarching purpose. That purpose, as rule 5(1) provides, is to facilitate a just and expeditious resolution of the real issues. Holding the defendant to this admission would obstruct, rather than facilitate, that purpose. Leave should be given for the admission to be withdrawn. It follows the application for leave should be granted. The proposed mechanism for effecting the withdrawal in the draft order before me is to formally permit the filing of the already filed amended defence. I am content to take that approach. Finally, an oral application is made by the defendant pursuant to rule 377 for the amendments of its name in the claim to become Cumner Contracting Proprietary Limited. That application is not opposed and it is uncontroversial that it ought to be granted. I will hear the parties as to costs and any consequential orders. … HIS HONOUR: The defendant has placed material before me from which it invites the inference that the plaintiff has not litigated the issue that I had to resolve in the spirit of the rules, referring me to various offers that were made about a prospective consent order and to other correspondence. The determinative point here is that the defence needed to be corrected. The fault for that was the defendant’s and it needed the court’s leave to correct it. In the circumstances, the need for the application have been before me and to have been made before the Court was inescapable under the rules. I accept, of course, that there will be situations in which an application of this kind might be sorted out amongst a multitude other, possible last-minute changes made, for example, -- 6 of 7 -- 7 on the morning of trial so as not to attract any particular discrete costs order. But here we have an application that has been made against a background I have already described, including where another judge of this court ordered that the application be made by a given date and well in advance of the trial, indeed well in advance of the second mediation. In the circumstances it is inevitable, in my view, that costs should simply follow the event on the standard basis and I will shortly so order. No particular order is sought in respect of costs thrown away, both the parties being content to let the rules do their work and or to leave that argument for another day, should it need to be argued. I have amended the draft order before me by adding paragraph 3: “The defendant pay the plaintiff’s costs of meeting the application to be assessed on the standard basis.” I order as per the amended draft order, signed by me and placed with the papers. -- 7 of 7 --