Australian Petroleum Pty Ltd v Parnell Transport Industries Pty Ltd & Ors [1998] FCA 1160

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY SG 36 of 1996

BETWEEN: australian petroleum pty ltd

acn 000 032 128

Applicant

AND: parnell transport industries pty ltd

acn 007 691 447

FIRST Respondent

JOHN WHITFIELD SETH PARNELL

SECOND RESPONDENT

GREG PATTEN

THIRD RESPONDENT

PARNELL MOGAS PTY LTD

ACn 071 920 155

FOURTH RESPONDENT

J & j PARNELL PTY LTD

FIFTH RESPONDENT

JUDGE: MANSFIELD J

DATE: 9 september 1998

PLACE: ADELAIDE

REASONS FOR DECISION

HIS HONOUR: This matter was listed to commence hearing on 31 August 1998, that hearing date having been fixed on 29 May 1998. On 22 June 1998 the Court gave directions for the exchange of witness statements and the preparation of a book of documents for the trial and setting a timetable for the exchange of those documents. In the events which have happened, those directions have not been complied with fully. In noting that, I do not intend to convey any criticism of those involved, as the work involved has obviously been extensive, but simply to note that the statements of the applicant which were directed to be provided by 31 July 1998 and the statements of the respondents which were directed to be provided by 21 August 1998 in response have not been exchanged. It is, I think, only in the last few days that all of the witness statements proposed to be relied upon by the applicant have been provided, including those supplementary statements to which I have been referred. The hearing in those circumstances commenced a little late, on 3 September 1998, when Mr Conti QC opened for the applicant. In the course of his opening it became apparent that the applicant was relying on an agreement not precisely in terms of the agreement alleged in par 12 of the statement of claim, but as constituted by a document dated 7 August 1992. That document is referred to within par 12 of the statement of claim as being part of, but not exclusively constituting, the agreement being sued upon. The statement of claim, until its amendment in terms which I allowed this morning, alleged a distribution agreement partly in writing, partly oral, and partly to be implied. When the matter resumed for evidence on 7 September 1998 following the opening, Mr Wells QC expressed concern about the inconsistency, as he described it, between the pleading and the opening. The nature of the applicant's claim was clearly opened upon and based upon the document of 7 August 1992 (at least, the applicant's primary claim). In the light of that, the applicant sought and was granted leave this morning to amend the statement of claim by substituting reference to that document, and alternatively reference to that document with some other correspondence, as constituting the relevant agreement. Upon that amendment being allowed, Mr Wells QC has today applied for the matter to be adjourned out of the list. If it is not adjourned, the trial will resume on Monday, 14 September 1998. If it is taken out of the list, it is unclear when it will be relisted for hearing. The basis of the application for adjournment, which I state, and I suspect state inadequately, is that the amendment now allowed changes the nature of the case in two significant respects: firstly, that it alleges an agreement made on 7 August 1992 rather than an agreement made over a period of time and including negotiations particularised previously in par 12 of the statement of claim; and secondly, that it now alleges an agreement which is said to be confined to a distribution agreement, rather than a composite agreement dealing with all matters concerning the relationship between the applicant and the first respondent, including both distribution and cartage issues. It is then put that previously the respondents had made a forensic decision to plead to the agreement as initially pleaded, simply non assumpsit, that is, that there was no agreement at all, and not to raise defences possibly available to them. The respondents acknowledge that those defences might have been raised in accordance with O 11 r 10 of the Federal Court Rules. I use the words "possibly available" simply because I do not wish to commit Mr Wells' clients to my expression of those defences as they are identified to me, and I acknowledge that he indicated that they were by way of illustration rather than necessarily a comprehensive list. They are that the agreement was a conditional agreement, subject to a condition precedent which did not at any time come to be fulfilled; that the agreement was terminated by agreement no later than 31 December 1994; that the agreement, if it existed, was breached by the applicant in some way not specified to me, but constituting repudiatory conduct on the part of the applicant, which was accepted by the respondents or by the first respondent, so that there was at material times no agreement in force between them; and fourthly, some form of estoppel. It is said that there is a desire in the light of the amended pleading and a review of the forensic decision previously made to plead those matters now. Then it is said that the alleged separation of the distribution agreement from the cartage arrangements between the applicant and the first respondent (as it is perceived by the respondents, but not necessarily accepted by the applicant) leads to a need on the part of the respondents to explore matters of further discovery and further possible evidence in areas which they have not previously done. The respondents therefore say that in the light of those two additional areas of focus which they did not previously have, they need to undertake a number of steps: the drafting and presentation of amendments to the defence to reflect the proposed defences to which I have referred in general terms; the reinterviewing of proposed witnesses, in particular focusing upon the document of 7 August 1992 and its significance, and the circumstances in which it came to be signed by certain of the respondents; the interviewing of a number of other potential witnesses who have not been identified; the review of discovered documents in the light of the new forensic decision to plead those defences to which I have referred; the possible need for further discovery and the possible need to identify and proof further witnesses. The applicant's response is to say firstly - and I do not take these points in order of significance or necessarily in the order in which Mr Conti QC put them - that it will not object to the respondents being given leave to amend the defence to raise the sort of issues which have been foreshadowed, so that it will not be prejudiced if the matter proceeds by being unable during the course of the hearing to raise by way of defence those matters which previously it had elected not to raise; secondly, that in any event the pleading did not clearly treat issues of distribution and cartage together, and in fact communications between the parties included assertions by or on behalf of the respondents of a separate cartage contract at least in terms of a document apparently dated 28 March 1994, so that as an issue the respondents were aware of and asserted such a separation of those issues; thirdly, that in any event the pleadings illustrate a significant focus upon the document of 7 August 1992, both in terms of the particulars to par 12 of the agreement but, more specifically, because the relevant terms of the agreement being sued upon, whether the wider agreement previously alleged or the agreement now alleged, which are identified as the terms which have been breached, are essentially clauses of the document of 7 August 1992. They are expressed in par 14 of the statement of claim. As well, that document of 7 August 1992 was identified as one of the documents describing or fixing the term of the agreement to have commenced on 7 August 1992 in par 15 of the statement of claim to which my attention has also been drawn. The respondents say in par 15.3 that the relationship as pleaded was terminable at will. Fourthly, no critical new witness has been identified and no compelling reason has been proffered as to why the sorts of investigations contemplated by the respondents could not be carried out and proceed in the next several days until the trial is to resume and during the course of the trial, without unfairness to the respondents, particularly bearing in mind that the document of 7 August 1992 was such a significant document on all accounts, or at least by reference to the statement of claim itself. The obligation of the Court on this application is essentially, as best it can, directed to the attainment of justice in all the circumstances of the case. In particular, in the present circumstances, I must bear in mind that this application is made in the context of, and on the basis of Mr Wells QC's submissions by reason of, the amendment, albeit that the particular defences could have been pleaded in response to the earlier statement of claim. The applicant has also pointed out that its focus on the document of 7 August 1992 as constituting the agreement was clear at least from the time its statements were filed, in the case of Mr Conaghty on 25 August 1998, and in the case of Mr Wziontek filed on 24 August 1998, because of the content of those statements, so that the respondents, upon review of those statements when served upon them, should then have perceived the nature of the applicant's case as now pleaded. That may be true, but it is equally fair to say that the applicant at that point itself could have appreciated that its pleading in par 12 of the statement of claim did not reflect or accord entirely with those statements, and could then have given notice to amend its statement of claim in the way in which it has now done. In my view, the question really turns not so much upon whether the respondents should be given the opportunity to plead what has not otherwise been pleaded, because the applicant acknowledges that it will not oppose the respondents being given that opportunity, but whether they should now be given the opportunity to do what they have not otherwise done in relation to pleading and investigation of those proposed defences, having regard to the amendment, and, if so, whether that opportunity in the interests of justice requires that the trial of this action should be deferred beyond 14 September 1998. In reaching a conclusion on that matter, I have sought to have regard to the nature of the issues to which focus is drawn by the pleading, the matters inevitably addressed in proofing of witnesses by the applicant and by the respondents, the fact that the respondents have not yet filed witness statements, and presumably the proofing of witnesses is ongoing and may incorporate without too much difficulty any additional focus which the amendment requires, and the fact that the respondents will for the early stages of the trial simply have to cross-examine witnesses presented by the applicant. I do not know how many additional witnesses the respondents may require to proof, but that may simply be as a result of the respondents not presently themselves being aware of that. Nothing has been put to me to suggest that witnesses that the respondents may require to proof are not readily available to them. I have borne all those matters in mind, but ultimately it seems to me the question must be decided on the basis of what has been put to me by counsel for the respondents, that, as a matter of fact, the four days between today and 14 September 1998, or the five days, counting today, between today and 14 September 1998, will not be sufficient to complete the tasks which are now sought to be completed. I am not able to, nor do I think it proper for me to second‑guess that judgment. I think I must accept it. I return then to the question of whether the consequences of that circumstance should be visited upon the applicant in the sense that the matter should be taken out of the trial list, at least for the time being. The applicant says that there is no plausible explanation as to why those matters were not done earlier. Again it seems to me that I am not in a position to, nor should I, second-guess the wisdom of the judgment which was made as a forensic judgment, not to address those matters earlier. Much could be said as to the wisdom of those matters, but it would be said from a point of view of ignorance of the material available to the respondents at the time those decisions were taken. Accordingly, it seems to me that I should accept that it is as a consequence of the amendment that the applicants have changed their forensic judgment as to what matters they wish to raise by way of defence to these proceedings, and that they are unable, in fairness to them, to do so within the time available before 14 September 1998. I am, however, reluctant to adjourn the matter out of the list at this point because it is not apparent to me and, I suspect, not apparent to those advising the respondents just how much additional work is necessary. As I have said, the respondents have not yet filed witness statements, although they have had the statements of the applicant progressively from about 13 August 1998, and I assume therefore that the proofing process is ongoing. I do not see at present that the additional proofing process or the additional review of documents which might be necessary should be unduly extensive. I may be wrong about that. I do not presently see that the range of witnesses to be interviewed or reinterviewed, to the extent interviews have taken place, will be extensive because, as the pleadings and to an extent the evidence of Mr Wziontek now shows, the occasion of the document of 7 August 1992 being executed was an occasion at which a limited number of people were present. Also, the correspondence to which I was referred during opening shows that the number of persons involved in the communications leading up to that document being signed by the first respondent, and involved in communications in the succeeding period of time between the applicant and the first respondent or others, was relatively limited. I propose therefore to adjourn this matter for mention to a date later next week when the respondents will have had an opportunity to address those matters in more detail, to have formulated the proposed amendment, and to be in a better position to indicate to the Court why the matter should not then proceed. If it is a matter of agreement between the parties at any time prior to that date, I will vacate the hearing for the week succeeding next week, that is, the week of 21 September 1998, because there was only that limited remaining period available for the hearing of this matter. I will in the meantime cause inquiries to be made with a view to my associate informing the solicitors for the parties of what, if any, time can be made available by the Court during October 1998 or November 1998, so that counsel and solicitors for the parties may consider not simply preparedness for trial but the availability of counsel and solicitors in that period of time, to see whether the matter can proceed if such time is available. I accordingly adjourn the matter to 9.30 am on 17 September 1998 for mention, and subject to any agreement or further application, for further hearing from 21 September 1998. I certify that this and the preceding six (6) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.