Austin Engineering Pty Ltd v DA Story Pty Ltd [2001] QSC 94

t I t 0 ci_ . o1, oq tI State Reporting Bureau ~~::~:,'.::~~::=:,t Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority oi the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MULLINS J No 81757 of 1991 AUSTIN ENGINEERING PTY LTD and DA STORY PTY LTD and DOUGLAS GEORGE ARUNDEL STORY and MARILYN STORY By Originating Action DA STORY PTY LTD and AUSTIN ENGINEERING PTY LTD BRISBANE .. DATE 14/03/2001 JUDGMENT "' floor, The Law Courts, Georg€ Street, Brisbane, a. 4000 1 REVISED COPIES ISSUED State Reporting Bureau Date/&/ ~/ v I Plaintiff First Defendant Second Defendants Plaintiff Defendant Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 10 -- 14032001 Tl/MSB26 M/T 1/2001 (Mullins J) l HER HONOUR: This is a supervised case. A chronology of the proceedings was prepared by Ms Luchich of the defendant's solicitors and is Exhibit MJL(l) to one of her affidavits filed by leave on 27 February 2001. One matter not adverted to in that chronology is that the parties were advised of the tentative allocation of trial dates for the period 2 April until 27 April 2001 in late September 2000. Cases on the supervised case list are managed in order to achieve a just and timely resolution. Parties to a supervised case have greater accountability to the Court in relation to the steps undertaken to bring the case to trial. The advantages the parties may reap from being on the supervised case list are a firm allocation of trial dates and a firm allocation of a trial judge. After the parties were notified of the tentative allocation of trial dates the directions made on the review hearings from 24 October 2000 onwards were focused on having this case ready for hearing on 2 April 2001. Prior to the hearing on 27 February 2001 no request for trial date had been filed. Presumably, until raised at the review hearing on 9 February 2001, it had been overlooked by the parties because the parties were not depending on allocation of trial dates in the normal course, which is usually dependent on the filing of a request for trial 2 JUDGMENT lC 3( 51 6 -- 2 of 10 -- 14032001 Tl/MSB26 M/T 1/2001 (Mullins J) date. No order had been made deeming the request for trial date to have been filed. The relevance of a request for trial date is that pursuant to Rules 378 and 379 of the UCPR an amended pleading may be filed without leave as often as necessary prior to the filing of a request for file date, subject to an entitlement in the opposing party to apply to disallow all or part of the amendment. When a review of this matter was held on 9 February 2001 the defendants foreshadowed that they wished to amend their defence. As a result I ordered, as Order lA made on that day: "The defendants serve on the plaintiff a draft of their proposed amended defence on or before 4 p.m. on 12 February 2001." Notwithstanding the express terms of this Order and the express requirement of paragraph 19 of Practice Direction 6 of 2000 which does not appear to have been complied with in relation to the proposed amendments and the underlying basis of the directions made in this matter since 24 October 2000 that the issues between the parties were substantially settled by the pleadings, on 12 February 2001 the defendants purported to deliver a further mended defence and counterclaim ("Fourth Defence") endorsed as "Amended pursuant to Rule 378 of the Uniform Civil Procedure Rules 1999 11 • I consider that in these circumstances no reliance could be placed on Rule 378 and that leave is required 3 JUDGMENT 1 10 20 30 40 50 60 -- 3 of 10 -- 14032001 Tl/MSB26 M/T 1/2001 (Mullins J) before an amendment could be made to the defence and counterclaim. If I were wrong on this aspect the plaintiff filed an application seeking to have the amendment made in the Fourth Defence struck out. The hearing on 27 February 2001 proceeded on the basis that a determination was required as to whether leave to make the amendments was required or whether they should be struck out. Of the amendments made in the Fourth Defence the plaintiff opposes only the amendments being the insertion of words in paragraph 5A(d) and the insertion of paragraph 7AA. The amended statement of claim containing annexure A schedule of damages was delivered by the plaintiff on 12 September 1996. That annexure sets out the quantification of the plaintiff's loss. It has remained substantially in that form since September 1996. The amended defence and counterclaim of the defendants delivered on 4 June 1997 simply denied the plaintiff's claims for relief. On 16 July 1997 the Court appointed an engineer, Mr Hinds, as special referee to inquire into and report on a specific list of issues arising in the proceedings pursuant to section 255(1) of the Supreme Court Act 1995. There were 25 hearing days before the special referee. The 191 page report of the referee dated 24 August 1999 was delivered to the Court on 25 August 1999 and, subject to one 4 JUDGMENT J 1( 31 6 -- 4 of 10 -- 14032001 Tl/MSB26 M/T 1/2001 (Mullins J) answer being modified by the consent of the parties, it was ordered that the report of the special referee be accepted and adopted by the Court for the purpose of the proceedings. The balance of the issues raised by the pleadings not disposed of by the report of the special referee remain to be determined by this Court in these proceedings. Further amendments to the defence and counterclaim were made on 16 November 1999, 10 December 1999, 4 August 2000 and 17 November 2000. The plaintiff amended the prayer for relief in the amended statement of claim in or about August 2000. Paragraph SA(d) of the defence, which was inserted as a result of the amendments made in the amended defence delivered on 4 June 1997 and prior to the amendments sought to be made by the Fourth Defence stated: "further or alternatively say upon any winding up of such partnership or joint venture the Plaintiff and the First Defendant were obliged by law to contribute in equal shares to any loss on such winding up" There was therefore no assertion on the defendants' behalf that if any partnership or joint venture were wound up that a loss would have been sustained. The essence of the amendments incorporated in paragraph 7AA of the Fourth Defence is that if damages were calculated using the methodology adopted in annexure A to the amended Statement of Claim there would have been a loss suffered, or alternatively, using the methodology adopted by the defendants in the annexure to the Fourth Defence, the 5 JUDGMENT 1 10 20 30 40 50 60 -- 5 of 10 -- 14032001 Tl/MSB26 M/T 1/2001 (Mullins J) defendants now allege that the project under the head contract was carried out and completed by the first defendant at a loss. Prior to the delivery of the Fourth Defence the first defendant had not provided any quantification of any claim that it or the partnership had sustained a loss or profit in relation to the completion of the project which is alleged by the plaintiff to be the subject of the partnership or joint venture. The significance of the insertion of paragraph 7AA is that it requires the defendants to rely on 54 ring binder folders containing in excess of 11,000 documents which the plaintiff had not had any cause to analyse for the purpose of the preparation for trial prior to the delivery of the Fourth Defence. Although the defendants discovered these documents in 1996 the plaintiff chose not to have regard to them because of the methodology adopted by the plaintiff in calculating its loss and the lack of an issue on the pleadings as to whether the project was completed at a loss to the first defendant. The difficulties which analysis of the 54 folders of documents would now entail are set out in the affidavit of Gloria Hazel Austin filed by leave on 27 February 2001. 6 JUDGMENT 1 10 3( 51 6 -- 6 of 10 -- 14032001 T2/LM9 M/T 1/2001 (Mullins J) The defendants' calculation of loss to the first defendant in relation to completing the project are based on a spread sheet prepared by one of the second defendants, Mrs Story, from the source documents in the 54 folders. That spreadsheet itself is 48 pages in length. At the time of the hearing on 27 February 2001 that spreadsheet had not been referenced to the source documents and the defendants proposed that Mrs Story would undertake that task immediately. This itself is recognition to some degree of the difficulties outlined by Mrs Austin in relation to those source documents. If the plaintiff can establish liability of the defendants in respect of the plaintiff's claim, the plaintiff seeks a number of alternative remedies. Ultimately that may depend on what the plaintiff can prove to be the appropriate relief or what remedy the plaintiff elects to pursue. The question now raised by the Fourth Defence of whether the first defendant completed the project at a loss might not even fall for determination depending on what elections are made by the plaintiff in relation to remedy. What is asserted on behalf of the plaintiff, and I accept, is that if paragraph 7AA is allowed to be inserted in the defence at this stage, the plaintiff would not be able to prepare for a hearing on the issue of whether the first 7 JUDGMENT 1 10 20 30 40 50 60 -- 7 of 10 -- 14032001 T2/LM9 M/T 1/2001 (Mullins J) defendant completed the project at a loss in the weeks allocated for the trial commencing on 2 April 2001. During the hearing of this application on 27 February 2001 both parties indicated that they otherwise could proceed with the trial on 2 April 2001. If the proposed amendments were allowed that could result in a further hearing subsequent to the hearing commencing on 2 April 2001. The law applicable to the determination of this application is that found in the High Court's decision in State of Queensland v. J L Holdings Pty Ltd (1997) 189 CLR 146. Justice to all parties is the paramount consideration in determining whether an amendment to a pleading at a late stage should be made. Having regard to the relevant considerations to which I have adverted already in these reasons and particularly the following: (a) the course which these proceedings have followed since the special referee's report was adopted by the Court; (b) the timing of the proposed amendments less than two months before the trial was due to commence; (c) the amendments raise complex issues of fact borne out by the reliance of the defendants on 54 folders of documents in relation to the calculations of loss required to be made by the amendments; 8 JUDGMENT 1{ 31 5 6 -- 8 of 10 -- 14032001 T2/LM9 M/T 1/2001 (Mullins J) (d) the issue raised by the amendments may ultimately have no relevance to the relief pursued by the plaintiff; (e) the risk that the trial due to commence on 2 April 2001 may be hijacked by the parties' attention being diverted by preparation directed towards the issue raised by the amendments; the justice of the matter does not favour allowing the defendants to rely on the amendments to paragraphs 5A(d) and 7AA as set out in the Fourth Defence for the purpose of the trial commencing on 2 April 2001. As that defence has been filed, I order that the amendments to paragraph 5A(d) and 7AA as set out in the fourth further amended defence and counter claim filed on 12 February 2001 be struck out. It follows that I give leave to the defendants to make the other amendments that are otherwise incorporated in the Fourth Defence to which no objection was taken by the plaintiff. It follows that the defendants should pay the costs of the plaintiff in respect of the application required to determine whether those amendments should be allowed but I will hear the parties on that issue. 9 JUDGMENT 1 10 20 30 40 50 60 -- 9 of 10 -- 14032001 T2/LM9 M/T 1/2001 (Mullins J) HER HONOUR: In relation to costs of the application required to determine whether the amendments to the Fourth Defence should be allowed I order that the defendants pay the plaintiff's costs of that application. HER HONOUR: Include in the directions that the plaintiff's statements in reply be delivered on or before 4 p.m. on Friday. I direct the parties approach my Associate about the fixing of the date for the hearing of objections to the witness statements. I order that the costs of the review today not associated with receiving the judgment be costs in the cause. 10 JUDGMENT 1 10 3( 51 6 -- 10 of 10 --