Supreme Court New South Wales Medium Neutral Citation: Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown [2017] NSWSC 632 Hearing dates: 8 May 2017 Date of orders: 08 May 2017 Decision date: 08 May 2017 Jurisdiction: Common Law Before: Garling J Decision: Grant leave nunc pro tunc to Futurewood Pty Ltd to file the Amended Statement of Cross Claim in the form in which it was filed on 23 February 2017 and for the matter to proceed on the basis of that pleading, amended as it was on 8 May 2017 Catchwords: PRACTICE AND PROCEDURE – leave to file Amended Statement of Cross-Claim – introduction of new issue at a late stage – no actual prejudice shown – interests of justice require amendment to be permitted Legislation Cited: Uniform Civil Procedure Rules r 14.28 Civil Procedure Act 2005 (NSW) Cases Cited: Le v Brown [2017] NSWSC 162 Texts Cited: Not applicable Category: Procedural and other rulings Parties: Thi Le Le (P) (14/271370) Cindy Xuan Vy Nguyen (P) (14/347492) Van Diep Tran (P) (14/358521) Rachal Monica (P) (15/172536 Stephen Huggett (P) (15/263637) Edwin Christopher Brown (Defendant – all matters) Futurewood Pty Ltd (Defendant) Zurich Australian Insurance Ltd (Defendant) QBE Insurance (Australia) Limited (Cross Defendant) Representation: Counsel: B Hull (Futurewood Pty Ltd) R O'Keefe (Brown and Zurich Australian Insurance Ltd) M McCulloch SC / R Perla (QBE Insurance (Australia) Limited) Solicitors: Robert Tricca & Associates (Monica) Brydens Law Office LP (Le, Tran and Nguyen) Turner Freeman Lawyers (Huggett) Vardanega Roberts Solicitors (Brown, Zurich Australian Insurance Ltd) Holman Webb Lawyers (Futurewood Pty Ltd) Gillis Delaney Lawyers (QBE Insurance (Australia) Limited) File Number(s): 2014/271370; 2014/347492; 2014/358521; 2015/172536; 2015/263637 Publication restriction: Not Applicable EX TEMPORE Judgment The Judgment of February 2017 1. On 22 February 2017, McCallum J refused leave to Futurewood Pty Ltd ("Futurewood") to serve an expert report prepared for it by mechanical engineer, Mr William Bailey. She did so after a hearing at which Mr Brown, the first defendant in proceedings brought by a number of plaintiffs, opposed the grant of leave. QBE Insurance (Australia) Ltd ("QBE"), which was a cross‑defendant in those proceedings, did not appear at the hearing of that motion and indicated that its position was that it neither opposed nor consented to the order that was being sought. 2. In giving reasons why she declined to grant leave, McCallum J determined that in the balancing exercise upon which she was engaged there was real prejudice to Mr Brown in permitting the report of Mr Bailey to be relied upon at that stage. Her Honour said at [23] this: "In some respects the prejudice is intangible, but one can, at least, be confident that the report will generate a round of amendments to the pleadings and will introduce new issues (including a wholly new ground for holding Mr Brown liable). That in turn will occasion the need for lawyers and the existing experts to spend additional time considering the new issues and revising material previously prepared incurring additional costs, all during the important period of preparation leading up to the scheduled hearing." 1. Her Honour indicated that she was not persuaded that it was appropriate to grant leave: see Le v Brown [2017] NSWSC 162. 2. In written submissions under the heading "Just resolution of the proceedings" provided to McCallum J in advance of that hearing, counsel for Futurewood had indicated to the Court when dealing with the basis upon which the late served report of Mr Bailey should be admitted, that there were some pleadings still to be finalised. Three particular pleadings were nominated. There was then added the following: "There will probably be a need to amend Futurewood's cross‑claims but the amendments will not be significant and will probably be a better particularisation of the circumstances as to why the combination was being driven too fast and the fact that a 'skel' trailer rather than a 'side loader' should have been used to transport the container given the weight of the total load and the unknown centre of gravity. The amendments have not yet been drafted as we await the final report of Mr Bailey." 1. Counsel went on to say: "Permitting Futurewood to rely on Mr Bailey's opinions will not adversely affect the way the proceedings continue, but they will allow for a more fulsome consideration of the technical case in resolving the issue as to why the combination rolled over and which party or parties should be held accountable." 1. On the day the judgment was delivered, there was a brief exchange between counsel for Futurewood and McCallum J in circumstances where counsel had not yet had the opportunity of reading and considering the entirety of her Honour's reasons. Counsel drew her Honour's attention to the fact of outstanding pleadings and said: "As I foreshadowed, I would be applying to amend the first cross‑claim in some ways that I have yet to formulate, but they won't be significant." [Emphasis added] 1. Her Honour granted leave to amend the cross-claim and reserved to any party affected by it, the right to object to its filing. Her Honour did note that the fact that she had refused to permit the service of Mr Bailey's report did not preclude Futurewood from posing the same questions at the expert witness conclave or cross-examining any of the witnesses. She indicated, however, that the constraint on that remark was that the issue had to be in the pleadings. No doubt her Honour's remark was addressed to a fundamental question of relevance. The response from counsel was, "Absolutely". Her Honour responded, "There might be an issue about that, but that is a separate fight". She went on to say this, "It doesn't mean that the amendment won't be opposed on the same ground, that is a fight for another day". Counsel confirmed that it was his view that the resolution of the dispute would need to await the report of the conclave. The Amended Pleadings 1. The amended first cross‑claim was filed in accordance with the grant of leave by McCallum J on the terms to which I have drawn attention. The principal amendment sought is the addition of paragraph 6A, which relates to the following matters. 2. First, the weight of the fully laden prime mover and trailer combination; secondly, the maximum permitted weight for such a combination on New South Wales roads; thirdly, the declared weight and the actual weight of the combination; fourthly, whether or not ENG, the company insured by QBE knew or did not know where the centre of the gravity of the load was and finally, whether in those circumstances there was a risk of harm, namely the rollover of the combination and load, when it was operating a prime mover and side loader trailer at or beyond the maximum weight constraint. 3. The amended pleading goes on to list various reasonable precautions which ought to have been taken with respect to that harm. Broadly speaking, those precautions are checking the weight of the vehicle, both declared weight and actual weight; declining to carry the load on a side loader trailer; and if it was to be carried on a side loader trailer, instructing Mr Brown with respect to the way in which he went about managing the driving of that vehicle. 4. Because the cross-claim has been filed, QBE, who wished to object to its filing, took the view that the appropriate mechanism by which their objection could be heard and determined was the filing of a notice of motion. This it did on 2 May 2017. Although it sought to rely upon r 14.28 of the Uniform Civil Procedure Rules ("the UCPR"), I consider that QBE was entitled to object to the filing of this cross‑claim on grounds more broadly constructed than those limited in r 14.28. That is because McCallum J reserved to QBE the general right to object to the filing of the document. In those circumstances, the legal principles which are applicable are those which I would apply should Futurewood be making an application to the Court for leave to amend its pleading. Futurewood's Explanation 1. Some points are clear. Futurewood accepts that paragraph 6A raises a new issue (that is, new in terms of the existing pleaded issues). 2. The facts underlying the new issue have been well‑known to all of the parties to the proceedings for some years. These facts, namely the overweight of the vehicle either on paper as declared or in fact as weighed, have been the subject of consideration by all parties to the proceedings for some time. They appear to be objectively ascertainable facts. 3. Those facts did not appear to have a central issue in the proceedings until Mr Bailey's report was served. By reference to those facts and the nature of the prime mover and trailer combination, Mr Bailey expressed particular views, having undertaken some calculations as to the likely centre of gravity, the static rollover threshold and other features which drew attention to the propensity of, or vulnerability to, rollover of this vehicle if driven too quickly around corners. I do not think it reasonable to conclude that simply because parties knew of these objective facts, that they would have any warning that those facts were to be relied upon in the way in which the amendments to the pleading now suggest. 4. Futurewood was content to rely upon the explanation it provided to McCallum J with respect to the lateness of the service of the report, as the basis for the lateness of the amendment which is now sought. That explanation was, in short, that in the course of a review of the file towards the end of 2016, after all expert reports had been received and in light of some additional material provided in the course of a conference with an individual living in China who had some knowledge of or else was responsible for the original packaging of the container in question, it was thought appropriate to have the assumptions made by one of the experts reviewed independently. 5. Of that explanation, her Honour said this in [21]: "During argument on the application I pressed counsel for Futurewood as to the reason for choosing Mr Bailey and for choosing him so recently. It emerged that an aspect of that decision was the familiarity of those representing Futurewood with Mr Bailey's services. I do not use the term 'familiarity' in any pejorative sense there, but only to explain that it appears to me to have been a decision driven by considerations of lawyers wishing to work with an expert with whom they have experience. Ultimately, in short, a question of forensic choice." 1. Counsel for Futurewood, on this application, did not suggest the explanation now being proffered was any different. 2. It follows then that the amendments which are sought are made at a late stage and arise because of an application of forensic considerations by Futurewood's lawyers to the determination of the appropriate expert to be called. Prejudice to QBE 1. QBE, which was not, it is to be recalled, the party opposing leave when the matter was determined by McCallum J, now opposes the grant of leave to make the amendment. QBE submits that if leave is permitted to amend the pleading it will suffer presumptive prejudice because of the need for it to consider what, if any, evidence it may need to obtain to respond to the pleading and what, if any, change of strategy should be engaged in, if this amendment is permitted. 2. Senior counsel for QBE accepted that there was no evidence before the Court on this application which alleged, described or demonstrated any actual prejudice. 3. The claim of presumptive prejudice by QBE is, in my view, doubtful. That is because, first, when the issue of reliance on the report of Mr Bailey as forming a part of the evidence in the proceedings, QBE neither opposed nor consented to its use. In February 2017, it did not advance a case that if such a report was permitted to form part of the evidence, that it would be prejudiced. It did not advance a case that it may have to reconsider the basis upon which it was approaching these proceedings. 4. Secondly, the nature of the amendment is, and has been, clear to QBE since the end of February 2017, when it first received the amended pleading. It has had at least eight weeks to consider the ramifications of that additional pleading, to examine what attitude it may take to those new pleadings and to make inquiries as to whether, as a matter of fact, it was in a position to defend that issue by adducing evidence or alternatively, whether it wished to obtain any expert evidence on the issue, and, if so, then how long that may take and what the cost of it may be. These are inquiries which would be expected of any reasonable solicitor acting for QBE or any party such as QBE experienced in litigation. Whether those inquiries were made I do not know. What I do know is, there is no evidence that such inquiries were made and that the position of QBE is, or is likely to be, actually prejudiced as a consequence of these amendments. 5. The further matter which is relevant to be considered is, as I am told from the bar table, that whilst QBE has not admitted any of the underlying facts which would make the party which it insured liable, it has been, broadly speaking, content to rely upon the terms of the policy of insurance by which it insured ENG, the party relevantly concerned. And, as I am informed from the bar table, QBE has not served or sought to rely upon any evidence about the underlying facts. In other words, QBE has been content to conduct the litigation, not by reference to participating in the dispute as to underlying fact, but rather by reference to the existence of properly debateable and arguable insurance issues as to whether such policy as was issued to ENG responds to the claim against it at all. Discernment 1. The question of whether or not an amendment to pleadings ought be permitted is one which is resolved by reference to the provisions of the Civil Procedure Act 2005 and, in particular, to the provisions in s 58 of that Act. Section 58 provides that in deciding whether to make any order for the amendment of a document, the Court must seek to act in accordance with the dictates of justice. This means that the Court must have regard to the provisions of ss 56 and 57 of the Civil Procedure Act. Relevantly, s 56 provides that any order which is made must facilitate the just, quick and cheap resolution of the real issues in the proceedings. As well, the Court is enjoined by s 58 to look at the degree of difficulty or complexity to which the issues in the proceedings give rise; the degree of expedition or lack of expedition being displayed by the respective parties in approaching the issues, and the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction and such other matters as may be relevant. 2. One of the matters which is relevant, of course, is that it is obviously in the interest of justice that a five day hearing which has been set aside for this case, be used for the determination of the issues which arise. And also, that all outstanding issues in any particular case ought be determined at the same time. 3. The matter is evenly balanced. On the part of Futurewood, the Court is confronted with a late amendment introducing a new issue in proceedings for no apparent reason other than a forensic choice made by the lawyers. On the other hand, QBE, which has not so far engaged in any dispute about questions of underlying fact and which is principally concerned with an issue relating to the proper meaning and interpretation of the relevant insurance policy, objects to the amendment as being lately made but points to no prejudice of any actual kind. 4. It would be easy to simply refuse the amendment, but it seems to me that it is in the interests of all parties to this litigation that all issues be raised and dealt with to finality. It also seems to me, given the particular issues upon which this Court is embarked for a hearing, that the case can be managed in a way which efficiently enables reasons to be raised, issues to be dealt with if they are to be dealt with, but for the case to nevertheless proceed in an orderly and efficient manner. 5. In all of the circumstances, undertaking the balancing exercise which I am required to do, and determining what the interests of justice require, in my view the interests of justice require me to permit the amendment which is sought and, accordingly, it is appropriate that I grant leave nunc pro tunc to file the Amended Statement of Cross-Claim in the form in which it was filed on 23 February 2017, and for the matter to proceed on the basis of that pleading, amended as it was this morning on 8 May 2017. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 May 2017