FEDERAL COURT OF AUSTRALIA Mundraby v Commonwealth of Australia [2000] FCA 411 PROCEDURE – application to amend statement of claim – negligence – amendment added a claim for exemplary damages – respondent unable to be ready - whether need to vacate hearing dates –– when respondent on notice of claim for exemplary damage – whether original particulars of negligence substantially identical to those grounding the claim for exemplary damages – short time till hearing date ELLIS MUNDRABY v COMMONWEALTH OF AUSTRALIA NG 808 OF 1998 TAMBERLIN J SYDNEY 10 MARCH 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 808 OF 1998 BETWEEN: ELLIS MUNDRABY APPLICANT AND: COMMONWEALTH OF AUSTRALIA RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 10 MARCH 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant be permitted to amend the statement of claim in the terms of the amended statement of claim annexed to the notice of motion dated 6 March 2000. 2. The hearing dates be vacated. 3. Costs be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 808 OF 1998 BETWEEN: ELLIS MUNDRABY APPLICANT AND: COMMONWEALTH OF AUSTRALIA RESPONDENT JUDGE: TAMBERLIN J DATE: 10 MARCH 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Before me are two matters, NG 808 of 1998 brought by Mr Mundraby against the Commonwealth of Australia and NG 809 of 1998 brought by Mr Lewis against the Commonwealth of Australia. Both proceedings arise out of a gassing incident. 2 Four days have been set aside in early April for the hearing of both matters which were commenced in 1998. These dates were fixed some considerable time ago. An application has been made by the applicants in each case for leave to amend the statements of claim in a number of respects, the principal amendment being to include a claim for exemplary damages. 3 The history of this matter, which I accept, is that the issue of exemplary damages was not "flagged" until early February 2000. Subsequently the matter was spelt out in greater detail but the application to amend was not filed until 7 March 2000, only three days ago and about five weeks before the hearing date. 4 An allegation of exemplary damages is a most important and serious allegation. Unlike a claim for compensatory damages it focuses not on the injury to the plaintiff but on the conduct of the defendant which is claimed to be so outrageous that it warrants an additional penalty to express indignation at the conduct, and to effect deterrence or retribution. This law still applies in Australia although in England some doubt has been cast on the availability of exemplary damages as being incompatible with the essentially compensatory nature of civil liability. 5 Paragraph five of the amended statements of claim seeks the exemplary damages. It is acknowledged that these amendments ought to have been made in accordance with the Rules, or expressly pleaded in the original Statement of Claim pursuant to O 12, r 4. Order 12 r 4 provides that where a party claims exemplary damages they shall give particulars of the facts and matters on which they rely to establish that claim. 6 For the applicant it is said that the Commonwealth should have been aware from particulars given as to negligence of the facts and matters in broad and substantial terms which go to the claim for exemplary damages. However, in my view, a claim for exemplary damages is not something to be inferred from particulars of negligence. Having regard to the serious effects such an allegation can have on the reputation of persons involved, often persons in responsible positions, it should be fully spelt out giving a respondent a full opportunity to meet it. 7 It is common ground that Mr Mundraby's case is not in a position to proceed on the dates allocated. I am informed that subject to the filing of a further report, in support of a number of other reports which have been filed since 3 February to support the exemplary damages case, Mr Lewis' case could proceed. However, it seems clear that even if this matter were to proceed on its own then it would not be resolved within four days. A considerably longer time could be taken in relation to this case alone. 8 The Commonwealth has put on evidence that it would face great difficulties in getting the case ready. The solicitor handling the case on the part of the Commonwealth has stated that there is no way in which he could prepare the Commonwealth's case on exemplary damages by 5 April 2000. He points out that the claim was not pleaded until recently. Indeed at the date of affirming the affidavit, 17 February, the claim had not been pleaded or particularised. 9 In all the circumstances it seems to me that if leave is granted to plead exemplary damages in a proper way, as ought to be done, it will not be possible to have these matters ready to proceed in any acceptable form on the dates fixed for hearing. This is so even if only Mr Lewis' case is to proceed. 10 So far as the amendment itself is concerned there is no strong opposition from the Commonwealth. Perhaps there is no basis for objecting to the amendment, provided that the matter does not proceed to a hearing on the days which have been fixed. This appears to be the position which has been taken by the Commonwealth. In my view the amendment is one which, in order to fully investigate and determine the issues in dispute, ought to be allowed. I do not express any view as to the merits one way or another. 11 Accordingly, what I propose to do is to allow the amendments in terms of the amended statements of claim but, unfortunately, and with a great deal of regret, I will also vacate the four days which had been set aside for the hearing of these matters. There are still some outstanding questions in relation to discovery and subpoenas and no doubt arrangements will have to be made for the resolution of these, and any other interlocutory matters necessary to have the proceedings ready for hearing. A decision will also have to be made as to whether the two cases will be heard together or separately. 12 I will reserve any question of costs in relation to the adjournment. Although I can see a substantial argument on the part of the Commonwealth in relation to costs I will not determine this question until I have heard the merits of the whole of the case. 13 The order I make is that the notice of motion to make the amendments set out in the amended statement of claim annexed to the notice of motion of 6 March 2000 be granted, but that the hearing dates which have been fixed be vacated and the costs be reserved. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 31 March 2000 Counsel for the Applicant: D Kennedy SC A Iuliano Solicitor for the Applicant: Szekely & Associates Counsel for the Respondent: T Morahan Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 10 March 2000 Date of Judgment: 10 March 2000 14