New South Wales Supreme Court CITATION : Waste Recycling & Processing Corporation v Global Renewables Eastern Creek Pty Limited [2009] NSWSC 443 HEARING DATE(S) : 18/05/09 - 21/05/09 JURISDICTION : Equity Division Commercial List JUDGMENT OF : Einstein J EX TEMPORE JUDGMENT DATE : 21 May 2009 DECISION : No requirement for defendant to vary its pleadings. CATCHWORDS : Pleadings issue raised in final address - Need for clarity and disclosure in conduct of litigation - Holding a party to considered forensic decision LEGISLATION CITED : Civil Procedure Act 2005 (NSW), CATEGORY : Procedural and other rulings Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd & Ors [2008] NSWCA 243 Bellevarde Constructions Pty Limited v CPC Energy Pty Limited [2008] NSWCA 228 Boyes v Colins [2000] WASCA 344 Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80 CASES CITED : Hooker v Gilling [2007] NSWCA 99 Khan v Armaguard Ltd [1994] 1 WLR 1204 Mercer v Chief Constable of the Lancashire Constabulary [1991] 1 WLR 367 Nowlan v Marson Transport Pty Limited [2001] NSWCA 346 Sutton v Erect Safe Scaffolding (Aust) Pty Ltd [2006] NSWCA 265 White v Overland [2001] FCA 1333 PARTIES : Waste Recycling & Processing Corporation (Plaintiff) Global Renewables Eastern Creek Pty Limited (Defendant) FILE NUMBER(S) : SC 50020/09 COUNSEL : Mr M Walton SC, Mr J Potts (Plaintiff) Mr F Gleeson SC, Mr R Foreman (Defendant) SOLICITORS : Clayton Utz (Plaintiff) Watson Mangioni (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST Einstein J Thursday 21 May 2009 ex tempor Revised 25 May 2009 50020/09 Waste Recycling & Processing Corporation v Global Renewables Eastern Creek Pty Ltd JUDGMENT The pleadings issue raised in final address 1 Shortly after Mr Gleeson SC appearing for the defendant had commenced his final address a matter concerning the state of the pleadings came up. More particularly Mr Walton SC appearing for the plaintiff contended that it was not open to the defendant to contend that WSN had not proved that it acted in reliance upon particular assumptions in its decision to enter into contracts with councils. Whilst it is regrettable that such a matter after the calling of all the evidence becomes the matter of disputation it is appropriate for the Court to deal with the issue. To do so requires some excursion into the history of some of the material changes in the pleadings. 2 A close analysis of the respective arguments put to the Court by both senior counsel was transcribed and is to be found at transcript pages 210-219. Indeed I sought to summarise the respective arguments as I understood them at transcript 215-216. Although these short reasons should be self-explanatory, the background readily available through the subject transcript pages may also be referred to. 3 In its amended commercial list response filed on 11 May 2009 the defendant responded to paragraph 42 of the commercial list statement [which in relation to the estoppel by a convention issue had pleaded that if the defendant was permitted to depart from the suggested conventional basis of the relationship, WSN would suffer particular detriment]. The defendant's response to that paragraph denied the allegations in the paragraph and continued: [The defendant says] "that in the absence of pleading and particularising in the detriment WSN allegedly suffered from action or inaction in reliance upon the assumption upon which the alleged conventions are founded, the plaintiffs list statement discloses no reasonable cause of action." 4 That matter was plainly treated seriously by the plaintiff which then again shortly before the commencement of the final hearing put forward an amendment which relevantly was in the following terms: 41C. WSN at all material times relied on the assumption common to both parties which formed the conventional basis of the relationship as set out in paragraphs 41, 41A, and 41B. Particulars WSN has ordered its business operations and its affairs both with GRL and third parties such as councils in reliance on the common assumptions 5 The defendant's solicitors then wrote to the plaintiff's solicitors seeking particulars in the following terms: "1. What is meant by the words "ordered its business operations" in paragraph 41C of the Second Further Amended Commercial List Statement? 2. In respect of: (a) GRL; and (b) each Council (by name), identify: (i) when; (ii) how; (iii) in what manner; and (iv) by whom on its behalf, did WSN "order its business operations" and whether it was by way of alleged action or inaction. 3. What evidence, documentary or otherwise, is relied upon in support of the proposed new pleading, if permitted." ************ "1. What is meant by the words "ordered its …affairs" in paragraph 41C of the Second Further Amended Commercial List Statement? 2. In respect of: (a) GRL; and (b) each Council (by name), identify: (i) when; (ii) how; (iii) in what manner; and (iv) by whom on its behalf, did WSN "order its… affairs" and whether it was by way of alleged action or inaction. 3. What evidence, documentary or otherwise, is relied upon in support of the proposed new pleading, if permitted?" [Exhibit D8 behind tab 5, the two letters both dated 16 May 2009 6 The response from the plaintiff's solicitors was as follows: "1. & 2. In reliance on the convention between the parties, WSN entered into a series of contracts with councils, being: (a) Blacktown City Council contract dated 29 June 2005; (b) Fairfield City Council contract dated 16 December 2003; (c) Holroyd City Council contract dated 20 March 2009; (d) Hunters Hill council contract dated 3 July 2006; (e) Lane Cove Council contract dated 29 August 2007; (f) North Sydney Council contract dated 1 January 2008; and (g) Willoughby City Council contract dated 6 September 2006. These were entered into on a mutual understanding between WSN and each of the councils that waste would only be collected on Mondays to Fridays. 3. The Supply contracts discovered in the proceedings. [the second letter from Clayton Utz which is dated 18 May 2009 and is also behind tab 5 in Exhibit D8] 7 When the plaintiff early in the final hearing sought leave to file its new pleading and the Court enquired as to the defendants attitude to the application, Mr Gleeson made clear that on the express basis that the plaintiff did not depart from the particulars to which I have referred, and did not depart from the case outlined by Mr Walton during the morning, the defendant would not oppose the amendments. On and only on that basis the Court granted leave to the plaintiff to file the second further amended commercial list statement. 8 This occurred only minutes before the plaintiff called its first witness Mr Kanofsky whose cross-examination took place and following a two or three question continuance by Mr Gleeson whose short re-examination took place early the next day. 9 Against that background that the position taken by Mr Walton when he rose early in Mr Gleeson's address to contend that he had run his clients case on the basis that paragraph 41C in the amended pleading had not been denied and was not an issue simply constitutes a forensic decision which must bind the plaintiff. His further proposition that had the matter been expressly denied by an amended commercial list response the plaintiff would have undoubtedly sought to lead further evidence from Mr Kanofsky also constitutes a forensic decision which must bind the plaintiff. Importantly it must be recalled that in the defendants letters seeking particulars they had expressly asked what evidence, documentary or otherwise, would be relied upon by the plaintiff in support of the proposed new pleading if permitted, which question was answered: "The Supply Contracts discovered in the proceedings" 10 Had there been any need for the defendant to expressly join issue with the new paragraph 41C it would not have been appropriate for the cross-examination of Mr Kanofsky to begin pending the propounding of a pleading issue with that new paragraph. 11 Further the defendant's overview submissions furnished to the Court and the plaintiff prior to the commencement of the hearing had specifically identified the elements which required to be established in order for estoppel by convention to arise, including the elements of reliance and detriment. [cf paragraphs 48 and 52]. 12 In Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd & Ors [2008] NSWCA 243, Alsop P [at 159 and following] made the point that it is most unfortunate when a hard fought commercial case in the Commercial List should descend on appeal to an argument about whether a point was run below. 13 His Honour's comments included the following: 160 …it cannot be emphasised too strongly that it is the responsibility of the parties, through their legal representatives, to exercise a degree of co-operation to express the issues for trial before and during the trial. Such co-operation can now be taken as an essential aspect of modern civil procedure in the running of any civil litigation, including hard-fought commercial cases. The need for clarity, precision and openness as part of this co-operation has been emphasised in the context of ambush or surprise: White v Overland [2001] FCA 1333 at [4], expressly approved in Nowlan v Marson Transport Pty Limited [2001] NSWCA 346; 53 NSWLR 116 (Heydon JA, with whom Mason P and Young CJ in Eq agreed); Glover v Australian Ultra Concrete Floors Pty Limited [2003] NSWCA 80 at [59]-[60] (Ipp JA, with whom Sheller and Hodgson JJA agreed); Sutton v Erect Safe Scaffolding (Aust) Pty Ltd [2006] NSWCA 265 at [4] (Bryson JA with whom Basten JA agreed); and Hooker v Gilling [2007] NSWCA 99 at [52] (McColl JA, with whom Ipp and Basten JJA agreed). 161 The need for clarity, precision and openness in the conduct of litigation and the responsibility of parties and their legal representatives therefore flows most clearly from the statutory duty of a party and his, her or its legal representatives in civil proceedings to assist the court to further the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in dispute and to participate in the processes of the Court to that end: see Civil Procedure Act 2005 (NSW), 56. It may be that the provision no more than restates the proper approach of the modern law of procedure reflected in cases such as Nowlan v Marson Transport . It places the proper approach, however, on a firm statutory foundation. These principles can be seen to be reflected in the longstanding rules of pleading requiring any matter that may cause surprise to be pleaded. 162 An enhanced requirement of clarity and disclosure in modern civil litigation can be seen in Australia and England from at least the early 1990s: see the discussion of the "cards on the table" approach by Ipp J (as his Honour then was) in Boyes v Colins [2000] WASCA 344; 23 WAR 123 (with whom Pidgeon and Wallwork JJ agreed), citing Mercer v Chief Constable of the Lancashire Constabulary [1991] 1 WLR 367 and Khan v Armaguard Ltd [1994] 1 WLR 1204. Indeed, from the late 1970s and early 1980s, the Commercial List of this Court (in which List this hearing took place) has been sought to be run on the strict basis of the clear and full enunciation of issues for trial, in a way that has always demanded the fullest co-operation among parties and legal practitioners to delineate and illuminate the real issues in dispute. 163 The clear statutory duty to assist the Court, and, in a practical way, to co-operate to bring forward the real issues in dispute, encompasses the requirement to be clear and precise in the illumination of the issues for trial. The occasion for this is not merely pleading (using the word broadly to encompass the modern commercial list summons and defence), it extends to all aspects of the engagement in the Court's processes. For similar responsibilities in the conduct of references, see Bellevarde Constructions Pty Limited v CPC Energy Pty Limited [2008] NSWCA 228 at [55]-[56]. 164 This does not deny the possibility, as occurs in real life in litigation, that issues will develop. Litigation is a dynamic human activity. Changes in how a case is put can be expected. This often occurs in large commercial cases. Such change, and the potential for it, makes it, however, all the more important that legal practitioners and parties ensure that the clear enunciation of issues keeps pace with that growth and change. This responsibility will encompass parties and their legal representatives making clear what is being put and also what they regard as not legitimately part of the controversy, if it is apparent to them that an issue not pleaded or presented is being relied on. 14 Against the background that the Court might take the view that the defendant, in the circumstances, should have expressly pleaded that the defendant denied paragraph 41C of the plaintiffs amended pleading, Mr Gleeson contended that he should be granted leave to join issue with that paragraph and that if granted leave, the amendment propounded would read: "The defendant denies paragraph 41C". 15 In the special circumstances which I have outlined above, in my view there is no need for any such pleading. 16 Had I been incorrect in this view, the court in the principled exercise of the relevant discretion would have granted the leave but not have permitted any further evidence to be adduced by either party. **** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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