635 St Kilda Road Pty Ltd and Ors v H Troon Pty Ltd and Magistrates' Court of Victoria [2001] VSC 473

8. The Originating Motion further seeks relief in the nature of mandamus, but that application was not pursued today and I think it is clear that it could not possibly succeed.

11. In order to understand the present proceeding it is necessary to set out something of the Magistrates' Court proceeding. In the course of my doing so it will be possible to address the complaints now raised.

14. That proceeding was commenced by Troon by complaint filed 1 September 2000. The complaint, in short, alleged that an agreement had been made between Troon and the present plaintiffs in July 1999. By that agreement Troon agreed to supply and install glaze windows, louvres and glass balustrades at a building then being constructed by the St Kilda Road company. The price for certain works was $66,146.

17. The Particulars of Demand which were particularly pertinent to the three applications made in the Magistrates' Court were as follows:

"6. It was a term of the Agreement that if the plaintiff was engaged to be the supplier of the facades to the remainder of the building known as the Marquise Apartments then the plaintiff would absorb 50% of the construction costs of the works being the sum of $33,073.00 7. The plaintiff completed the Works in about August 1999. The first defendant paid the plaintiff the sum of $33,073, being 50% of the cost of the Works. 8. In breach of its obligations under the Agreement, the first defendant failed to engage the plaintiff to supply and install the facades to the remainder of the building known as the Marquise Apartments, thereby entitling the plaintiff to payment of the remaining 50% of the contract sum under the Agreement, being $33,073.00."

21. It is necessary to notice, next, the corresponding paragraphs of the defences of the St Kilda Road company.

"6. The first Defendant does not plead to paragraph 6 of the Plaintiff's Claim as it is not a proper pleading and the particulars joined thereto make no allegation against it. 7. The First Defendant does not plead to paragraph 7 of the Plaintiff's Claim as it is not a proper pleading and the particulars joined thereto make no allegation against it. 8. The First Defendant denies paragraph 8 of the Plaintiff's claim, or any breach of any Agreement with the Plaintiff, the existence of which is specifically denied, says further it has not engaged anyone to supply and install the facades to the remainder of the building known as the Marquis Apartments, and says still further the pleading is embarrassing and ought be struck out as no obligations said to have been breached by the First defendant are pleaded."

25. Mr Robertson was sued as a guarantor. Nothing need be said about the claim particularly raised against him.

28. I have said that the Magistrates' Court proceeding was commenced on 1 September 2000. Notices of defence were dated 15 September 2000. The defendants brought an unsuccessful strike-out application in November. The proceeding was fixed for hearing in March this year. That occurred in December 2000.

31. The Magistrates' Court proceeding was to commence on Monday 5 March. It appears that on the preceding Friday the St Kilda Road company attempted to commence a County Court proceeding against Troon in connection with an agreement reached between them in July 1999, claiming in all $145,000. The detail of the alleged agreement did not in all respects, as pleaded, coincide with the detail of the agreement alleged by Troon in the Magistrates' Court proceeding; but there was a substantial coincidence and, no doubt, the two proceedings addressed the same transaction.

34. I have said that the St Kilda Road company attempted to commence the County Court proceeding on Friday 2 March. Something, it appears, went amiss. In consequence, the proceeding was not commenced, in fact, until 5 March.

37. Notwithstanding that circumstance, on 2 March an application was filed in the Magistrates' Court seeking transfer of the Magistrates' Court proceeding to the County Court pursuant to Part 3 of the Courts (Case Transfer) Act 1991. Such an application was tenable. It was not, contrary to a view that at one stage I expressed in argument, excluded by the operation of s.16(1)(a) of that Act.

40. At the outset of the hearing on 5 March the St Kilda Road company and Mr Robertson, through counsel, applied for an adjournment of the hearing so as to permit processing of the Case Transfer application. The learned Magistrate, having heard contrary argument, refused the application. It is that application and that refusal which form the basis of the first quashing order sought by the plaintiffs in this proceeding.

43. It was not submitted by counsel who appeared for the company and Mr Robertson before me that the learned Magistrate acted upon some mistaken view of the law, or that in some way he fell into jurisdictional error in determining the application to which I am now referring. The complaint was, rather, that the Magistrate's decision was attended by Wednesbury unreasonableness.

46. In his Ruling the learned Magistrate referred to the way in which Troon laid its claim and the defences raised against it. I should interpolate to say that there was a small secondary claim brought by Troon against the defendants. Nothing much turns upon it and I mention it no more.

49. In the event, and returning to his Worship's Ruling, the learned Magistrate noted the sequence of events. He indicated the material which was before him and on which he based his decision. It was, in short, the complaint, the defences, the court case log and audit details computer printout, and the submissions of counsel. His Worship noted that he had no affidavit material in support of the defendant's application. Concerning that matter, he said that there should have been such material.

52. He drew attention to the timing of the application and to the circumstance that the County Court proceeding, though recently issued, did not necessarily reflect a pleading very recently drawn. He noted that under s.17(8) of the Courts Case Transfer Act it is relevant to consider the point at which a transfer application is made; though he was careful to say that it was not for him, in effect, to resolve the question whether that consideration would have been dominant in the resolution of the Case Transfer application, had it proceeded to a conclusion.

55. In the end, having referred also to prejudice to the plaintiff, at least in terms of delay, His Worship rejected the defendant's request for an adjournment, observing: "There just simply is not sufficient material to support it".

58. In my respectful opinion, not only was His Worship's Ruling not unreasonable in the Wednesbury sense, it might be said to have been improbable in the extreme that the application would have been resolved in any other way. This was a very late-made application, not supported by affidavit material explaining that circumstance; it built upon pleadings, and particularly I refer to paragraphs 6 and 8 of the first defendant's defence, which were apt to obfuscate rather than clarify matters in issue. True it is that it committed the parties to two hearings - in the event that the County Court proceeding went to trial - rather than one. But it was not contended for Troon that the St Kilda Road company would be unable to pursue the County Court proceeding by reason of Anshun estoppel; and, I should add, exactly the same position was taken by counsel for Troon in argument today. In all, as I said a few moments ago, a decision other than that reached by the learned Magistrate was highly improbable - not, of course, that one need go so far.

61. After the application had been refused counsel for the plaintiff applied to amend paragraph 8 of the Particulars of Demand, specifically by deleting the following words: "In breach of its obligations under the agreement". Counsel for Troon explained the application this way:

"Paragraph 8, it says, 'In breach of its obligations under the agreement.' That is not correct. There was no actual obligation to appoint the plaintiff; merely the provisions provided that were the plaintiff to be appointed a discount of 50 per cent would be given".

The proposed amendment, and the proffered explanation were, in my opinion, entirely consistent with an apparent tension between paragraphs 6 and 8 of the Particulars in their original form.

66. Counsel for the St Kilda Road company and Mr Robertson responded to the application to amend by saying -

"other than to say that he has taken me by surprise, I don't have any material with respect to that".

70. No application to adjourn in light of the proposed amendment, or to amend the defences, was then made. The application to amend was granted and the trial proceeded.

73. At the outset of the hearing on the second day counsel for the St Kilda Road company and Mr Robertson said this:

"It's my intention this morning to seek your (Worship's) consent to amend the defence as a consequence of the plaintiff's amendment yesterday and to seek an adjournment subsequent on that".

77. He referred to the defence being "hamstrung in its defence now because of the amendment". He had prepared submissions which he provided to the learned Magistrate.

80. It must immediately be said that neither in oral submissions nor by his written outline of submissions did counsel for the company and Mr Robertson propose any specific amendments; that is, no formulation of proposed amendments was advanced for the learned Magistrate's consideration.

83. Insofar as the Originating Motion seeks "quashing of a decision of the Magistrates' Court on 6 March to refuse an application for amendment by the defendant (sic) of its pleadings", the Originating Motion could not possibly succeed. No formal application to amend was ever made.

86. That takes me to the application for an adjournment made on 6 March. There is no doubt that such an application was made and that it was refused. The thrust of the application made by counsel for the company and Mr Robertson was contained in paragraph 9 of the written outline of submissions. Thus:

"9. It is submitted the Defendants must now consider the broader aspects of the agreement in their defence, issues such as performance by the Plaintiff, whether the works were done in a good and workmanlike manner, any defects and defaults, expert witnesses, the effect of the termination of the contract by the Plaintiff need to be considered and instructions obtained. These issues now need to be looked at and pleaded by way of defence to the Plaintiff's amended claim now that the Plaintiff has abandoned its claim that the Defendant has breached the agreement by failing to engage the Plaintiff."

90. In oral submissions counsel contended that up until the time when paragraph 8 of the Particulars of Demand was amended, the defendants' position was that they had an absolute defence to the plaintiff's claim. The issue was whether the agreement provided for the company to engage the plaintiff in the manner alleged by Troon. But now, according to counsel, what was alleged was a "more traditional sort of matter in that the plaintiff says there is money owing under an agreement". That was said to lead to "issues of whether the work was done in a good and workmanlike manner; whether there were defaults".

93. Counsel submitted that "It may well be there is a requirement for expert witnesses in respect to the performance of the works". He raised, as a second matter, "issues of whether the termination of the contract was appropriate or the effect of the termination even on the contract and on the claim". These, he said, needed to be considered and instructions obtained.

96. In effect, counsel for the St Kilda Road company and Mr Robertson contended on 6 March that what had hitherto been a claim founded upon breach of an alleged obligation under the agreement was now simply being put as a failure to make a contractual payment, in consequence of which issues of possible faulty workmanship and the circumstances of termination of the contract would or could be relevant. In those circumstances, it was contended that the defendants needed time to consider their position.

99. Counsel for Troon opposed the application to adjourn. He submitted that the substantial defence as articulated in the past had been that no obligation to pay the amount claimed by the plaintiff had yet accrued because no-one else had been appointed to do the additional work. Today, counsel for Troon drew my attention to a series of instances on the first day of the hearing where something of the sort was said by counsel then appearing for the St Kilda Road company and Mr Robertson.

102. Counsel for Troon further submitted to the Magistrate that the bad workmanship issue to which reference had been made was not a matter of defence at all; but rather a matter of set-off or counterclaim, and one that could have been raised earlier.

105. In the result, the learned Magistrate concluded that the issues that he had to decide, whatever was the state of the plaintiff's pleadings, were what were the terms of the contract as to price and payment of the price, and whether the St Kilda Road company was in breach. He said, "I am not prepared to allow an adjournment or an amendment of the defence". The second of those matters, as I have pointed out, was not, in truth, before him. Probably what he was trying to say was that he was not prepared to allow an adjournment for the purpose of the defendants considering and possibly formulating amendment to the existing defences.

108. It is certainly true to say that an amendment ought be allowed unless it cannot be accommodated by an order for costs and, if necessary, adjournment. It is also true to say that a discretionary ruling of a Judge or Magistrate is difficult to successfully challenge; the more so where the ruling relates to a matter of practice or procedure. Authorities in respect of those propositions are well known and I shall not cite them.

111. In the present case, the St Kilda Road company and Mr Robertson pertinently seek to challenge a discretionary ruling to refuse amendment, and to do so by way of an application seeking an order in the nature of certiorari. The task thus faced is a very difficult one.

114. The present plaintiffs are really put to saying that the ruling refusing an adjournment was so unreasonable that it cannot be allowed to stand. I am not prepared to conclude that the ruling should be so categorised.

117. The learned Magistrate was faced on the second day of the hearing with a second application to adjourn - an application that had not been made at the time when amendment was sought and granted on the first day of the hearing. It was an application to adjourn to permit consideration of issues that might or might not ever have led to an application to amend defences or the raising of a set off or counterclaim. It was an application that was supported by the assertion of counsel that issues of defective workmanship needed to be investigated, in circumstances where there was on foot a County Court proceeding in which an allegation of defective workmanship was made. It was an application unsupported by even a draft version of any proposed amendment.

120. I think that the learned Magistrate was entitled to regard the application as being speculative in its surmise that the company's defence would or might require amendment. I think that he was entitled to view with some scepticism the submission that the issues previously joined between the parties had been as narrow as counsel for the company and Mr Robertson submitted was the case. That submission did not sit comfortably either with the company's defence or with what counsel had said on the first day of the hearing. I think that he was right to say that the true questions were, and remained: what did the contract say about price and payment; and was the St Kilda Road company in breach of contract? In making those observations he really encapsulated considerations of the kind that I have mentioned. I add only that other considerations led in the same direction. So, for example, a bad workmanship claim could always have been raised; whilst termination might well not have been a matter pertinent to Troon's claim.

123. I do not regard the learned Magistrate's refusal to accede to the application to adjourn in the particular circumstances as being unreasonable to the point where it could not be permitted to stand. Indeed, I consider that the ruling was appropriate in all the circumstances; not that I need go so far.

126. After the learned Magistrate had declined to adjourn the matter on 6 March counsel for the St Kilda Road company and Mr Robertson informed the court that he was not instructed further in the matter. He withdrew from the hearing. It proceeded to a conclusion. An order was made in Troon's favour. I was told from the Bar table today that the order has been satisfied. Those circumstances might well have been relevant to whether relief in the nature of certiorari ought to have been granted in the event that the present plaintiffs had otherwise made out their claim. But in the circumstances I shall say nothing in that connection.

129. What I have said is enough to dispose of the matter. The challenge to the three rulings having failed, the final order of the Magistrates' Court cannot be impugned. I should add one thing. Mr Carlile of counsel, who appeared for the St Kilda Road company and Mr Robertson today, was not the counsel who appeared below. I think that he had a difficult argument to pursue, and it was one which he confronted competently and attractively, and despite being closely pressed by me. It is pleasing to the court to see a young member of counsel performing his professional duties in such a way.

Mr Sharpley: Your Honour, I would seek an order that the plaintiffs pay the first defendant's costs of the proceeding.

His Honour: Yes. The proceeding is dismissed with costs.