JUDGMENT No. com Wh Fh bG IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No. QG198 of 1986 ) ) GENERAL DIVISION BETWEEN: CABOOLTURE PARK SHOPPING CENTRE PTY. LIMITED * , . Applicant AND: WHITE INDUSTRIES (QLD) PTY. LIMITED FEDERAL COURT. Respondent OF AUSTRALIA 4 FEB 2004 AND: WHITE INDUSTRIES (QLD) PTY. LIMITED First Cross-Claimant AND: CABOOLTURE PARK SHOPPING CENTRE PTY. LIMITED First Cross—Respondent COURT: SHEPPARD, BURCHETT and GUMMOW JJ. DATE : 8 FEBRUARY 1989 REASONS FOR JUDGMENT SHEPPARD J.: This is an application for leave to appeal against an interlocutory judgment of a judge of this Court (Ryan J.) which was delivered on 9 December last. The judgment was delivered in relation to an application to amend a statement of defence to a cross-claim in long-running litigation between the parties, which is concerned with the amount which should be paid to the respondent for building work done by it for the applicant 2. in the construction of a shopping centre. His Honour refused to allow a further amendment to the defence which was formulated in a paragraph numbered 37 which was as follows:- "237. Save as aforesaid,and excepting those items of work expressly admitted in the Scott Schedule delivered * herein by the cross-respondent, the cross—respondent:-— (a) Denies that the cost of the items of work claimed in paragraph 30 of the Amended Defence and Cross Claim was a provisional sum, or an adjustment thereto, to which paragraph 4.03.03 applied; (b) Denies that the items of work, the cost of which is claimed in paragraph 30 (of the statement of cross-claim) were undertaken pursuant to the instruction of the Architect as required by Clause 4.03.03; (c) Denies that the items of work, the cost of which is claimed in paragraph 30, are items of work to which paragraph 4.03.03 applies; af (d) Denies that the amount claimed for the items of work pleaded in paragraph 30 is a fair and reasonable and (sic) amount for the work or is a proper valuation. of the work pursuant to Clause, 10.27.03;" . Clauses 4.03.03 and 10.27.03 are two of the conditions of the contract entered into between the parties. In the course of his reasons for refusing leave to amend, his Honour said:- "This paragraph is a reformulation of what was formerly paragraph 41. However, it 3. suffers from substantially the same defects and leave to insert it is refused for the reasons indicated at pp. 53 and 54 of the judgment of 28 October 1988." His Honour's reference to the earlier judgment makes it necessary to refer. to what he then said. He was then dealing, as he indicated, with a new paragraph 41 which said:- "41. Save as aforesaid and excepting those items of work expressly admitted in the Scott Schedule delivered herein by the cross—respondent:- (a) denies that the amounts and items of work claimed pursuant to paragraphs 30,31 and 32 of the defence and cross-claim are properly claimable pursuant to clauses 4.03.03 and 10.27.03 of the said agreement; (b) denies that the amounts claimed represent a fair and reasonable value, pursuant to clause 10.18 or otherwise, for the items or work referred to therein." bad " Having referred to para. 41, his Honour continued:- , "It is not clear whether this paragraph is, intended merely to summarise the specific denials contained in the previous paragraphs or to add something to them. If it reflects . the latter intention it offends against 0.11 r.18 (of the Court's rules) because the basis on which it is alleged that the amounts claimed pursuant to paragraphs 30, 31 and 32 of WIQ's defence and cross-claim are not properly claimable or are in excess of the fair and reasonable value of the work involved has not been pleaded. It also seems that this plea is. inconsistent with the partial admission in paragraph 14(a) of Caboolture Park's reply and answer reproduced at pp. 9-10 of these reasons. I refuse leave to insert a new paragraph in terms of the proposed paragraph 41." 4. His Honour dealt with the matter upon the basis that the cross-respondent sought to amend its defence to the cross-claim by adding the entirety of para. 37 which I have earlier quoted. In the course of the argument today, counsel for the applicant for leave to appeal - that is, the cross-respondent - has abandoned any application for 'leave to amend in terms of sub-paras. (c) and (d) of para. 34, and has argued the matter upon the basis that his Honour was' in. error in not allowing an amendment to enable the cross~respondent to plead sub-paras. (a) _and (b) thereof. That concession immediately raises a difficulty because we are now asked to look at the matter in a context which is quite different from that in which his Honour looked at it. The blanket traverses in paras. (c) and (d) were thought by his Honour not to comply with Order 11, rule 18 of the Court's rules. It is probable that his Honour took the same view of sub-paras. (a) and (b), but certainly his Honour dealt with the matter asa whole, and against the background of an application to insert a new para. 37 in the terms quoted in its entirety. There was no segregation in the argument before his Honour to break the paragraph up so that his Honour was not invited to allow the . amendment whether in whole or in part. We should remember, as I have indicated, that this application was made in long running litigation which has been the subject of a hearing before his Honour for some months and which will apparently go on for some months to come. Numerous applications to amend have been made to him not only in relation to this particular aspect of the matter but in relation to a number of other aspects of it as well. 5. This is the second application designed to raise questions about the applicability of the two clauses which are mentioned in both the former para. 41 and the para. 37 which is now under consideration. His Honour has clearly expressed concern about the fact that the litigation is running on as it is and the number of applications for amendment that have been made and has said, quite reasonably in my respectful opinion, that further applications to amend should be'specific and should clearly be shown to raise what may be described as genuine or realistic questions for decision. The cross-claim relies on two clauses of the building contract to make a money claim. In order to understand the argument that we have had, it is necessary to refer to the terms of them. Clause 4.03.03 says:- "where a Provisional Sum is for work to be carried out by the Buildér or for some other purpose not provided for in paragraphs 4.03.01 or 4.03.02 then the Architect shall issue the necessary instructions to the Builder and the provisions of paragraph 10.27.03 shall apply." Clause 10.27.03 provides:- ' "In the case of Provisional Sums to which paragraph 4.03.03 applies then, unless otherwise provided or agreed, work carried out to which that paragraph applies shall be valued as a Variation and any difference between such value and the particular Provisional Sum shall be added to or deducted from the Contract Sum as the case may require." 6. So, the cross-claimant relies upon the clauses to base one of its causes of action against the cross-respondent. The purpose of the proposed para. 37, as I understand what has been put to us today, is to deny certain of the conditions precedent which must be in existence before the clauses will operate. In particular, the cross-respondent wishes to maintain that the sums in question are not provisional sums and that the work was not undertaken pursuant to the instruction of the architect. The matter is not mentioned in his Honour's reasons but pleading in relation to conditions precedent is provided for in Order 11, rule 6 which provides:- "6. -(1) It shall not in any pleading be necessary to make a general allegation of fulfilment of a condition precedent to a right of action. (2) Any party wishing to deny the fulfilment of any such condition precedent shall plead such denial." - " It is that which counsel for the cross~respondent says is being done in the two sub-paragraphs of para. 37 which remain. Counsel for the cross-—claimant has, however, raised difficulties about this submission. In relation to provisional sums, he says that it is not clear from the terms of sub-para. 37(a) in what respect the sums claimed are not provisional sums within the contract. We were informed that there is no definition of that expression in the contract, but we were referred to clause 15.03 which lists a number of sums which are therein described as provisional sums and which are provided for in relation to a host of works including demolition and earthworks, soil retaining . 7. system, structural steel, and so on. There are some 41 items in all. Counsel for the cross-claimant has submitted that for the plea in sub-para. 37(a) to be satisfactory it should indicate in respect of the items set out in para. 15.03 why the items do not fall within that clause. Counsel for the cross-respondent, however, does not put his case in that way. It is unnecessary to go to the detail of what he said to us, but in my opinion whether the matter is looked at as a pleading matter strictly or as one which can be dealt with by particulars, it would not be right to take the view that the discretion which his Honour had miscarried simply because he refused the amendment which was sought in bald terms without the information which counsel for the cross-claimant says is absent. In the end, one has to reach a conclusion whether there has been a miscarriage of his Honour's discretion. It seems to me that it is difficult to say that there has been such a miscarriage in the absence of a clear statement in the pleading or in accompanying particulars of the precise circumstances in which it is said that the sums in question are not provisional sums. I bear in mind, of course, that his Honour's reasons do not deal with this point specificallly and may be said for that reason to be somewhat elliptical, but that is understandable bearing in mind the circumstances in which the judgment was given, as I say, in the run of long and complex litigation. A similar difficulty, I think, arises in relation to 8. sub-para. 37(b) which denies that the items of work were undertaken pursuant to the instruction of the architect. A background factor which is not irrelevant is that it seems unlikely, on what we have been told, that the architect is intended to be called as a witness in the proceedings. It is unnecessary to go into the reasons for this, but one might have expected that if there were an issue about instructions given by an architect, the best person to ask about whether they were . given or not would be the architect himself. It is in relation to what is pleaded in sub-para. 37(b) that a trial judge concerned to control long running litigation, and to try to bring it, consistently with the due administration of justice, to a. conclusion, would be concerned to see that only issues which were real or genuine issues would be raised. In the course of the argument which has ensued, it has been suggested from the bench that the problem could be overcome if affidavits or other material were put before the Court which would indicate the particular items. in respect of which it is said that instructions were either not given or in relation to which the cross-respondent is unable to say whether they were given or not. This would, one would hope, cut down the area of dispute. In-the absence of any attempt by the cross-respondent to do something of this kind, particularly bearing in mind the stage of the proceedings at which the application for amendment was made, sub-para. 37(b) seems to me to suffer from the same sort of problem that surrounds sub-para. 37(a). In relation to the application which has been made, we should 9. not, as I have said, grant leave or interfere with what his Honour has done unless we are clearly satisfied that there has been a miscarriage of the discretion which he had. I mentioned some background matters at the commencement of these reasons, and they are important. Also important are the considerations which I have mentioned in relation to the specific terms of both sub-paras. (a) and (b) of para. a7. I myself find it impossible to take the vi'ew that there has been demonstrated here any miscarriage of his Honour's discretion. That must lead, in my opinion, to the dismissal of the application, but I should not be thought to have the view that the cross-respondent should be shut out from relying on genuine matters of defence which there may be in relation to the two conditions of the building contract relied upon, or that the cross~respondent should not otherwise be permitted to show that there is a serious question concerning the application of those clauses to the sums which are claimed and thus to _ the cross-claimant's right to recover them under those clauses. In other words, notwithstanding the problems that there may be about further amendments to the pleadings in this litigation, if there is a properly formulated application to amend which plainly, either in its own terms or with the aid of particulars, indicates precisely what it is that the cross-respondent wishes to rely upon, and which is supported by some evidence or other material which discloses that the issues sought to be raised are genuine and real, it may well be appropriate for an amendment to be allowed. I do not wish to say anything, however, which would 10. bind the discretion of the judge. The matter is for him if and when such an application is made to him. In the circumstances, I am of the opinion that' the application for leave to appeal should be dismissed. BURCHETT J.: I agree. His Honours judgment demonstrates he saw the defence propounded by the applicant as offending an important rule of pleading to which his Honour referred. (Some of the cases confirming the importance of that rule are set out in Williams, Supreme Court Practice Victoria, 2nd ed., vol. 1, at p. 1329; Civil Procedure, Victoria, vol. 1, pp. 2928-9.) It also appears to me that the amendment in question did offend that rule, but that. is particularly because of sub-paras. (c) and (d) of the amendment to the pleading, and perhaps because of some aspects of the drafting of sub-paras. (a) and (b). had " Sub-paras. (c) and (d) are no longer pressed. What is sought is to plead non-fulfilment of quite specific pre-conditions of particular liabilities alleged. That is different altogether from the problem his Honour dealt with. On the face of it, subject to discretionary considerations with which his Honour did not find it necessary to deal, a sufficiently precisely pleaded defence raising these matters could well have been seen as appropriate. But a defence of that kind, extricated from the problems which are now admitted to bedevil the pleading as drafted, was never proffered to his Honour. I do not think it would be proper to grant leave to argue an appeal which would raise in reality a fresh pleading, not dealt with by his Honour, 11. and inevitably would involve discretionary considerations upon which his Honour has not ruled. It goes without saying that this ground of refusal of leave involves the corollary that an application to do what is now sought would be a new application, raising new issues, and it is still open to the applicant to make such an application to his Honour. If the applicant does' so, the full breadth of his Honour's discretion will be unaffected by the present decision. GUMMOW J.: I agree with what has been said by my brother Sheppard, and have nothing further to add. SHEPPARD J.: _ Well, the order of the Court then is that the application for leave to appeal is dismissed with costs. bad " l certify that uns and the O PRers ao r cn. . 3 pages are a true copy the rearons fo a - y Oagrt judgment herein of oa Neate Detee 8 FEPRVPRY /787 & Counsel for the Applicant: Mr. R. Meldrum, Q.C. and Mr. R. Perry Solicitors for the Applicant: Messrs. Flower & Hart Counsel for the Respondent: Mr. H. Fraser Solicitors for the Respondent: Messrs. Morris, Fletcher "Cross Date of Hearing: 8 February 1989 Place of Hearing: Sydney