JUDGMENT No. «Beaded LZ32. IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION No. G 384 of 1986 NEW SOUTH WALES DISTRICT REGISTRY ) Between: BRIAN JAMES COLEMAN Applicant And: GORDON M. JENKINS AND ASSOCIATES PTY. LIMITED Respondent CORAM: Einfeld J. DATE: 27 August 1987 —— FEDERAL COURT OF AUSTRALIA 2u JAN 2003 LIBRARY *, PLACE: Sydney EX-TEMPORE JUDGMENT The applicant came to the Federal Court for the purpose of commencing a case identified by the statement of claim as an alleged breach of section 52 of the Trade Practices Act 1974 (the Act) by the respondent, and in the exercise of the accrued jurisdiction of the court, in negligence and breach of contract. The applicant also alleges breaches of section 53 of the Act. At the commencement of the hearing, the applicant sought leave to file an amended statement of claim, which I was informed was first made available to the respondent yesterday afternoon. It is clear from a consideration of the amended statement of claim that it substantially broadens the legal and conceptual basis of the claim, and it appears also to broaden its factual matrix by altering in some significant ways, the basis of certain of the exercises of the court's accrued jurisdiction. In meeting the application for leave to proceed upon the amended statement of claim, the respondent, whilst formally objecting, acknowledges that it is likely that the court would permit the applicant to conduct his full claim, rather than force him to proceed on_ the truncated basis supplied by the original statement of claim and application. In these circumstances, the respondent says that it should be granted an adjournment, with its costs thrown away by the nature of the amendments, by reason of the fact that the amended statement of claim will require it to do considerably more preparation and investigation, including at least the requirement of additional particulars and discovery, and perhaps an application for leave to administer interrogatories. In addition, today, the applicant provided, for the assistance of the court, and without prejudice to any right which the respondent may wish to exercise to apply for appropriate orders, a schedule of damages. It is agreed that this schedule had not previously been supplied to the respondent. It constructs the applicant's claim for damages by reference to four conceptual matters. The first is the amount which the applicant alleges was said by the respondent to be the maximum cost of the building to be erected. That item, whilst apparently disputed by the respondent, could not catch the respondent by surprise because it has always been part of the applicant's allegations. The second amount contained in the schedule of damages is the sum which the applicant says he has expended up to date, exclusive of interest, in the construction of the building concerned. That is an alleged amount of $138,000, which, however it may vary in number from other figures given to the respondent, is also unlikely to embarrass the respondent in any particular respect. The third item that is referred to is called, in the document, rectification costs of $65,000, but which the applicant explains is really the maximum cost to complete the building to either a satisfactory condition or, perhaps, to the condition in which the applicant believed the building would be if, on his allegation, the contract was adequately performed by the respondent. That matter appears to be entirely new, at least in that the respondent was of the opinion that the case did not embrace any issue concerning the completion of the building, and therefore its quality up to date, either in terms of general legal principles or in terms of the contractual arrangement which has been alleged. I can see that the inclusion of this amount would considerably change and would certainly lengthen the nature of these proceedings. On the one hand, the respondent was expecting to meet a case which was, in substance, a breach of contract case. On the other hand, the applicant proposes to lead evidence that even on the completion of the contract for a higher price than he says he was to be charged, he still has not obtained the building which he allegedly contracted to obtain. That means that the respondent would have to meet a case based upon the defects, perceived or otherwise, of the current building, and the appropriateness as well as the costing of any additions that need to be made to it. Although the amount involved in this aspect may he as low as $55,000, even though the document alleges $65,000, and in the overall amount claimed is only less than half of the amount in issue, it obviously would be likely to occupy a considerable amount of court time in adjudicating; and it is clear that evidence would have to be specifically directed to this matter of a quite different kind to that which would comprise the proof of or defence to the remaining part of the claim. The fourth item in the schedule of damages deals with interest. It is conceded, and properly so, that the amounts set out under this heading in the schedule are, at least, mathematically incorrect and conceptually wrong. Nonetheless, they would have a very significant effect on _ the amount of damages to which the applicant may be entitled, and would undoubtedly be the subject of considerable argument, both conceptually and mathematically. By itself it seems to me that inclusion of this item and its particularization in the schedule of damages, even as amended later by fresh calculations, would not create any serious prejudice to the respondent if the case were commenced today. Appropriate orders could be made in the course of the proceeedings which would protect any difficulties that the respondent might have in meeting this aspect. In response to the request of the respondent for an adjournment, the applicant says that if faced with a choice of an adjournment or the amended statement of claim, he would choose to forego the amended statement of claim, so far as the addition of paragraphs 11B to 11E are concerned. These allege, inter alia, negligent misstatements and other assertions which are quite new to the proceedings today. However, the applicant does not concede the amendments submitted in the amended statement of claim, so far as they affect some factual assertions of significance, particularly those in paragraphs 6 and 7, where the original timing and content of the dealings between the parties has undergone substantive alteration. This litigation, in factual terms, goes back to 1983, when the parties first, apparently, came into contact. Already, therefore, some four years have passed between many of the factual allegations to be made and the occasion when witnesses are going to have to swear to conversations which took place at that time. It is always unsatisfactory that such a long time should be allowed to take Place between the actual happenings of events such as this and their relation in the witness box on oath. To lengthen that time even further, albeit perhaps for only three to six months, makes even more difficult the ascertainment of the facts by the court, especially when I am told that there are considerable factual disputes about what did pass between the parties at the time. Senior counsel for both parties have informed me that this case, either on the original statement of claim, and particularly on the amended statement of claim and the schedule of damages presented, is quite unlikely to finish in less than three days and may, in fact, take more than five days. | My own experience tells me that five days is probably the least we could be looking at. The matter was fixed originally for one day plus or two days and we have already taken half a day on this argument. I must therefore face the reality that if the case were to commence this afternoon, and I were to be able to make available a considerable portion of tomorrow, plus Monday and Tuesday, which may be made available by re-arrangements within the court, it is unlikely that the case will be completed, and it will then have to be adjourned part~—heard until November at the earliest. If the matter is adjourned, it is possible that a hearing date could be obtained so that the matter could be heard without interruption to completion within the last month of the 1987 court year. In these circumstances the applicant would lose nothing in terms of time of any significance if the hearings were all to take place in November/December, as opposed to being completed in that time. However, the respondent's application for adjournment carries with it the understandable sting of an order for costs, and it therefore becomes necessary to consider the matter in principle, especially as _ the costs thrown away may bear a very significant disproportion to the amount that might uitimately prove to be in issue between the parties. Therefore, the real question that falls to be determined is whether the applicant by amendments to clauses 6 and 7 of the statement of claim, or as now appears in the amended statement of claim as clauses 6 and 7, has so substantially altered the case as to have caught a well prepared respondent by surprise, especially when one adds to it the third item of damages to which I have referred, namely, the costs alleged to be now required to bring the building up to either the standard embraced by the contract or a reasonable standard, whichever might happen to be held to be appropriate. I should also consider in this connection the significance to the applicant of the withdrawal from the case of proposed paragraphs 11(B) to (E), especially paragraph 11(E)(iii). This is a clause which alleges, though not I think yet in adequate or precise enough terms, that in fact the applicant was induced by the representations of the respondent to borrow moneys from the State Bank and incur debts with building contractors for the erection of the dwelling involved over and above the $80,000 which the applicant believed he would have to have in hand to finance the building discussed and allegedly agreed between him and the respondent. Attempting to relate that allegation with the schedule of damages is difficult but it is possible, and I say no more than that, that the fourth concept comprised in that schedule is really intended to be the particularisation of that allegation. At present it falls short of doing so, as do _ the words of the actual allegation in the amended statement of claim, but in discussion during the course of argument it appears that that is in substance what the allegation means. If so, it is a substantial allegation in money terms, as_ well as in legal terms and if successful would make a very considerable difference, at least potentially, to the size of any verdict of damages which the complainant would hope to achieve in these proceedings. It is obvious that if there is to be an adjournment on the basis of the amendments that now comprise clauses 6 and 7 of the amended statement of claim, the applicant will persist in his assertions of paragraphs 11(B) to (FE), and the considerable changes which they make to clause 12 whose opening words would have a meaning quite different if 11(B) to (E) are included than they would if 11(B) to (E) were excluded. It is always unsatisfactory in substantial litigation to conduct it on some truncated or abbreviated basis, especially in a piece of complex litigation such as this apparently is to be. The problems that can arise in the course of a hearing, in this type of circumstance, do not need to be outlined exhaustively, but it will suffice to say that, should the applicant present his case on some basis similar to that contained in the original statement of claim, even with different factual allegations, and it should turn out that he fails to prove a case under the relevant statutes or common law counts, as_ they used to be called, but could prove a case on the same evidence under one of the removed heads of liability, a substantial injustice could result. This would particularly be so if as a result of embarking upon such a hearing a claim which might have been available had it been pursued when the hearing commenced, ceased to be available, for example, by reason of becoming statute barred in the meantime, or for some other factual or legal reason. I should mention the possibility of a defence to some part of the amended statement of claim based upon the appropriate statute of limitations forecast in argument by senior counsel for the respondent, and whilst an adjournment for some months may not have any effect at all on that matter, it is not possible for me at the moment to say that it would not have some effect. In all these circumstances, it seems to me that the balance of justice requires that an adjournment be granted to the respondent. The respondent faces the prospect of the applicant's maximum claim of having to pay damages of or in excess of $200,000. On any view, this would he a substantial sum, and whilst it represents the maximum of the claim of the applicant as presently framed, and whilst on another view, the matter might be an argument only over $50,000 or $60,000, assuming damages at all, I must view it from the position of the case which the respondent is presently being asked to meet, even if it should eventually turn out that the maximum claim of the applicant is wholly exaggerated and quite invalid. The parties reaily must come to court to fight the same substantive case. I would not be at all concerned if they came to court to fight cases which were different in terms of the damages about which each was speaking, provided the philosophical or conceptual bases for the construction of those damages were the same, and provided they were said to flow from the same legal premises. It is clear that neither of these matters exists in this case at the present time, and for those reasons I feel that the applicant is entitled to the amendment which he seeks in the statement of claim, and the respondent is entitled to the adjournment which it seeks as a result of the amendment. Because this adjournment has been brought about solely by the late amending of the statement of claim in such matters of substance, it follows that the respondent should have the costs thrown away by the amendment and the consequent adjournment. In order to enable this matter to be brought back into the list fully prepared at the earliest possible time, I direct that the parties bring - 10 - in short minutes of orders for the future conduct of this case tomorrow morning, Friday 28 August, at 9.30 am. The directions proposed should embrace the interlocutory steps which the parties consider are appropriate, including the filing of further amendments which may be necessary to the statement of claim in order to clarify its content, and the filing and serving of an amended statement of defence, the exchange of particulars as may be appopriate and the other interlocutory steps which the parties may desire or feel is necessary. I direct further that if interrogatories are desired, and in order to save time, the leave of the court which is required for their administration should be fixed as part of the timetabling so that it is possible to set down for hearing at an early time any argument that might arise on the question of whether leave should be granted. This matter will be listed for hearing before me the week commencing 11 April 1988.