Supreme Court of WA|2009-10-08|Before: Murphy J

ATTORNEY-GENERAL OF BOTSWANA -v- AUSSIE DIAMOND PRODUCTS PTY LTD [No 2] [2009] WASC 301 (8 October 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : ATTORNEY-GENERAL OF BOTSWANA -v- AUSSIE DIAMOND PRODUCTS PTY LTD [No 2] [2009] WASC 301

Strike-out - Application to serve witness statement out of time - Proximity to trial - Importance of case management principles

Rules of the Supreme Court 1971 (WA), O 20 r 19(1)(c)

Plaintiff's application for strike-out and leave to serve witness statement out of time dismissed

Defendant's application to extend time to serve amended defence allowed on terms

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 83 ALJR 951

Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331

Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491

Plaintiff's application to strike-out paragraphs of defence

1 The plaintiff applies to strike-out certain paragraphs of the defendant's amended defence dated 24 September 2009 pursuant to O 20 r 19(1)(c) of the Rules of the Supreme Court 1971 (WA) (the Rules). The application was filed on 2 October 2009.

2 The background of this application is that the trial of this matter had been listed, some time ago, to commence on 12 October 2009.

3 In September 2009 a directions hearing was called on by the court to review procedural matters generally and in particular the parties' preparedness for trial. That directions hearing occurred on 11 September 2009. On that occasion it appeared to the court that the plaintiff's then re-amended statement of claim was opaque to say the least. In essence, it alleged a contractual repudiation or a total failure of consideration, without pleading the contract on which it was relying or its material terms. The pleading in substance alleged that the plaintiff had paid monies for delivery of a drilling rig and spare parts, and for commissioning the drilling rig, and that the rig had not been commissioned. This was said to be a repudiation, or a total failure of consideration, of an unidentified agreement. There was no plea that the drill rig and spare parts were not delivered, or that the goods were not of merchantable quality or fit for purpose. The prayer for relief claimed, as liquidated sums, the monies allegedly paid by the plaintiff to the defendant.

4 The statement of claim also alleged, in effect, that the alleged repudiation had been accepted by the issue of the writ. There was no plea which revealed what the plaintiff alleged to be the nature and scope of the alleged 'commissioning' obligation, or when the defendant allegedly failed and refused to commission the rig, or when the defendant allegedly repudiated the unidentified agreement.

5 The defendant's defence to the plaintiff's amended statement of claim was only slightly more illuminating. The defendant pleaded that it had 'performed its obligations' but did not allege what, if any, contract governed the parties' relationship and the material terms of any such contract.

6 On this state of the pleadings, on 11 September 2009 the court explored with counsel the nature of the plaintiff's case and whether the issues were adequately identified on the pleadings. The plaintiff's then counsel (its junior counsel in this application) said that the plaintiff's cause of action was in restitution for money had and received. Counsel for the defendant also said, in effect, that he understood the plaintiff's claim to be of that nature. The impression given by both counsel at the directions hearing was that, despite the nature of the pleadings, both parties understood what was really in issue. Notwithstanding the apparent confidence of counsel for the parties, the court ordered that the plaintiff have leave to file a further amended statement of claim so as to plead any contract relied upon, and that the defendant had leave to file an amended defence to any further amended statement of claim.

7 The plaintiff, as a result, filed its further amended statement of claim dated 16 September 2009. The amendments are extensive. The plaintiff pleads not only the contract on which it relies and its material terms, but also details of the alleged non-performance of the contract, its characterisation of the alleged non-performance as repudiatory and as constituting a total failure of consideration, and the dates and nature of its alleged acceptance of the repudiation (now said to be by written communications in December 2007 or February 2008). The plaintiff still claims, in its prayer for relief, for the recovery of the payments it made. There is again no claim for damages, or any claim that the rig was not of merchantable quality or fit for purpose.

8 The amended defence was filed by the defendant on 24 September 2009. The defendant now pleads the terms of the contract which it says governed the relationship between the parties, the alleged performance of that contract by the defendant, and the plaintiff's alleged acceptance of goods and affirmation of the performance of that contract.

9 In this application each party has complained that the other has exceeded the scope of the amendments permitted by the court's orders made on 11 September 2009. Whilst both parties have gone beyond simply pleading their respective versions of the contract which allegedly governed their relationship, the necessary implication of the orders was that they would also plead any material facts relevant to the alleged non-performance (in the case of the plaintiff), or performance (in the case of the defendant), of the contract, and associated matters such as repudiation and acceptance of repudiation (in the case of the plaintiff) and any defences thereto (in the case of the defendant). Both parties in their pleadings have done that.

10 With that background, I now turn to the specifics of the strike-out application.

11 The first paragraph of the amended defence of which the plaintiff complains is par 6.5. The complaints are as follows. First, it is said that the paragraph withdraws a positive case previously pleaded that the rig was commissioned and used by the plaintiff after 13 March 2006. As to that complaint, par 6.5 does not withdraw a positive case of the defendant. The defendant's positive case as to commissioning the rig remains in the amended pleading at par 6.6. No objection is taken to par 6.6 by the plaintiff.

12 Secondly, it is said that par 6.5 now has the effect of pleading that the plaintiff affirmed the contract and denies that there was a total failure of consideration.

13 That is correct. In that regard it appears to me to be responsive to the plaintiff's new pleadings. Further, the defence in its previous form denied that there was a total failure of consideration, and had pleaded that the plaintiff took delivery of the drill rig in or about November 2004 (par 5.1.1). That plea in my view connoted acceptance of the drill rig by the plaintiff. I consider that the previous defence had pleaded facts relevant to both a denial of the total failure of consideration, and an alleged affirmation of the contract, insofar as acceptance signifies affirmation - a matter to which I return in addressing par 7.4 of the pleading.

14 The plaintiff then says that par 6.5 should be struck out because it does not respond to the amendments in the further amended statement of claim. That submission seems to me to be inconsistent with the previous submission. Paragraph 6.5 pleads that the plaintiff accepted the goods delivered by the defendant, including the drill rig itself. Both the plaintiff in its further re-amended statement of claim (par 3) and the defendant in its amended defence (par 3.2) plead that in addition to the drill rig, the contract required other items of equipment to be supplied by the defendant. Paragraph 6.5 of the defence pleads that the drill rig, the other items of equipment and certain other goods which the defendant says the contract required it to provide, were all provided by the defendant and accepted by the plaintiff. A plea of the alleged supply and acceptance of contractual goods is, at the very least, arguably relevant to the plaintiff's allegation that the consideration moving from the defendant totally failed.

15 Next it is said that the plea falls outside the scope of the amendments permitted by the court's orders made on 11 September 2009. In my view it does not. I have explained that whilst the court's orders referred, in terms, to the pleading of the contract relied upon by the plaintiff, both the plaintiff, and the defendant, quite permissibly pleaded the consequential allegations of fact concerning performance, non-performance, acceptance, repudiation etc.

16 Next the plaintiff points to the fact that the defence was filed a day late. The delay is not egregious and does not, in my view, warrant a strike-out.

17 Next it is said that the defendant has raised new issues in respect of which there is insufficient time between now and trial for the plaintiff properly to prepare its case. For the reasons previously given, there do not seem to me to be materially new facts, although to the extent that they are, they appear to me to be responsive to the plaintiff's pleadings. Insofar as the defendant pleads the supply of some additional items, viz a truck, a compressor, and manuals, it may be expected that the plaintiff would readily know whether it received and accepted delivery of those items.

18 The plaintiff also contends that as the defendant has pleaded acceptance for the purposes of s 35 of the Sale of Goods Act 1895 (WA), the defendant has raised new issues involving questions of fact and expert evidence. As best I understand the submission, the plaintiff says that the plea of s 35 of the forum statute leads to a consideration of the application of Botswana law, and the proper construction of the United Nations Convention on Contracts and the International Sale of Goods according to the law of Botswana.

19 In the absence of evidence, the court will ordinarily assume that foreign law is identical to Australian law: Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 [16], [45], [116], [125]. Foreign law is a question of fact to be pleaded, and proved by expert evidence, ordinarily by the party relying on it: Neilson v Overseas Projects [115], [185], [249]; Regie National des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 [68]. The defendant's plea of s 35 does not plead foreign law. The plaintiff had not pleaded any contract until 16 September 2009. Its further re-amended statement of claim of that date did not allege that the proper law of the contract on which it relied was Botswana law. Nor in the earlier versions of the plaintiff's pleading did the plaintiff raise a plea about the application of Botswana law, although I recognise that in the absence of a plea of contract, the occasion to plead its proper law did not strictly arise. Nevertheless, its seems to me that if the plaintiff had previously wished to assert the application of Botswana law, it should have done so. The defendant's plea of a law of the forum does not seem to me to raise a new issue of fact or, at least not one about which the plaintiff could be said to be taken by surprise.

20 Also, as the defendant's plea is responsive to the plaintiff's new pleading, it ought not be struck out for raising new issues. It would not prejudice, embarrass or delay a 'fair' trial of the action by allowing the defendant to plead fully its case with respect to the plaintiff's recent pleading.

21 It is finally said that the late raising of issues is not explained or justified by any material. In my view, as the pleading is responsive to the plaintiff's further amended statement of claim, there is no obligation on the defendant to justify its position in a strike-out application. The nature of the amendments, in light of the history of the pleadings that I have outlined, are not such as to require any further explanation.

22 For these reasons the application to strike-out par 6.5 fails.

23 The next paragraph complained of is par 6.10. The first criticism is that it withdraws the positive case previously pleaded that the rig was commissioned and used by the plaintiff after 13 March 2006. For the reasons given in relation to par 6.5, I do not accept that proposition.

24 Next it is said that the plea raises a fresh factual issue not previously pleaded in the previous defence. That is so in relation to the pleaded use of certain goods, but the previous defence was not pleading to the plaintiff's further re-amended statement of claim. The further re-amended statement of claim itself pleads facts and dates with respect to the contract relied on, the delivery of the rig and other equipment, the alleged commencement of commissioning, the failure to complete commissioning, and new dates for the acceptance of repudiation, which did not appear in the plaintiff's original statement of claim.

25 The next complaint is that par 6.10 does not respond to the allegations in the further re-amended statement of claim. I would regard this submission as unsustainable. The plaintiff in this application itself says that par 6.10 is 'raised to answer the plea that there was a total failure of consideration in respect of the payments'.

26 It is next said that the plea falls outside the scope of the amendments permitted by the court's orders made on 11 September 2009. For the reasons given earlier, in my view it does not.

27 Next it is said that it was filed out of time. Again, the one day delay was not egregious.

28 The next complaint is that it raises substantive new issues in respect of which there is insufficient time between now and trial for the plaintiff properly to prepare its case. For essentially the same reasons given in relation to par 6.5, I do not accept this submission. Also, it is to be expected that the plaintiff has ready knowledge as to whether it had used the goods pleaded in par 6.10 or not.

29 Next it is said that the late raising of the issues is not explained or justified by the material. For the reasons indicated in relation to par 6.5, this submission also does not succeed.

30 Accordingly the application to strike-out par 6.10 fails.

31 The next paragraph of the defence that is objected to is par 7.3. The complaints are the same as those raised in relation to pars 6.5 and 6.10. For the reasons given in relation to those paragraphs, the application to strike-out par 7.3 fails.

32 The next plea objected to is par 7.4 of the amended defence. Paragraph 7.4 relies upon a number of pleas in the defence, some of which have been objected to, namely pars 6.5 and 6.10, and others of which have not. Insofar as the plaintiff makes the same complaints in relation to par 7.4 as it has made in relation to pars 6.5, 6.10 and 7.3, for the reasons previously given, those grounds do not warrant a strike-out. The plea in par 7.4 however alleges, expressly, that the plaintiff 'affirmed' the contract. The plaintiff says that the plea of affirmation here raises questions of the knowing exercise of inconsistent rights. The defendant says that in the context of the paragraphs complained of in this application, it was merely characterising acceptance of the goods as affirmation. The defendant's counsel nevertheless says that the defendant would be prepared to delete the words 'affirmed the Supply Contract and' in par 7.4. In light of that, it is unnecessary to deal with the arguments further. That concession should be given effect to in the defendant's application referred to below.

33 Accordingly the plaintiff's application filed on 2 October 2009 to strike-out parts of the defendant's defence is dismissed.

34 The plaintiff, in its submission in support of the strike-out application filed and served on 6 October 2009 (in accordance with a court direction), contended that, by reason of the operation of O 21 r 8 of the Rules, as the defendant had not filed an amended defence by 23 September 2009 as ordered, the order granting leave ceased to have effect with the result that the defendant should have applied for leave to file its amended defence of 24 September 2009. The defendant has applied for such leave at the hearing. By the affidavit of Ms Andonis of 7 October 2009, the defendant says in effect that the day's delay was caused by having to deal with the extent of the plaintiff's amendments, and other work associated with the trial of this matter. In the circumstances, and having regard to the matters I have addressed in relation to the plaintiff's strike-out application, I would grant such leave, subject to one qualification. The words 'affirmed the Supply Contract and' in par 7.4 are to be struck out.

The plaintiff's application for leave to extend time for filing a witness statement

35 The other application I have before me is by the plaintiff for leave, to the extent necessary, to extend the time for filing and serving a witness statement. The statement is that of Mr M Frenken, served on 29 August 2009. It will be necessary to consider the background in more detail shortly.

36 At the outset, however, I should make some observations pertinent to the application as filed by the plaintiff. The application is for leave 'to the extent necessary'. This conveys the impression that on some view reasonably open on the facts, leave is not necessary. That impression is misleading because on any view of the matter, Mr Frenken's statement was served out of time. Regrettably, there was no readily frank acknowledgement of this at the hearing by counsel for the plaintiff. Also, the affidavit in support of the application filed by the plaintiff (Ms Batalin's affidavit, 25 September 2009), did not disclose when, at least on the plaintiff's view, Mr Frenken's evidence was required to be served. As the length of delay will usually be a relevant consideration in these kinds of applications, the plaintiff's failure to identify clearly the time that it says it should have served Mr Frenken's statement, so as to allow proper computation of the measurement of the delay, was also regrettable. On the plaintiff's case, it was thus not clear what was the relevant period of delay in relation to which the plaintiff was seeking an indulgence. I mention later the importance of candour in these circumstances.

37 By reason of this lack of clarity, the court requested the parties, in their written submissions, to identify 'under any previously applicable court orders, and if so which, by what date Mr Frenken's statement was required to be served?'. The parties' response to the question is outlined below.

38 The defendant's written submissions were to the effect that by the court's order of 11 May 2009, the plaintiff was required to serve Mr Frenken's witness statement by 5 May 2009.

39 The plaintiff in its written submissions referred to the court's orders made on 11 May 2009, which were amended on 29 June 2009. The relevant effect of those orders was that the plaintiff's non-expert witness statements were required to be filed by 5 May 2009, the defendant's witness statements were required to be filed by 3 July 2009 and the plaintiff's witness statements which were 'purely responsive' to the defendant's witness statements were required to be provided by 4 August 2009. The plaintiff in its written submissions also referred to the defendant's non-compliance with certain orders and the plaintiff's non-compliance with the filing of 'purely responsive' witness statements by 4 August 2009, and the fact that the parties had conferred, without ultimately agreeing consent orders, in circumstances where the plaintiff had been proposing to serve its 'purely responsive' statements by 28 August 2009. The plaintiff's submissions then dealt with various factual matters relevant to the obtaining of Mr Frenken's evidence.

40 The plaintiff's written submissions then contained the following:

If the court concludes that Mr Frenken's evidence is not responsive evidence to the evidence filed by the defendants in these proceedings (the plaintiff's [sic] submit that it is) then, the plaintiff's [sic] submit that, in order to do justice between the parties, the Court ought to extend the time limit for the filing and serving of his witness statement.

41 That submission requires consideration. First, it does not seem to be a particularly direct answer to a direct question. It appears that the parenthetical part of that submission, read with the preceding pages of the submissions, was intended to allow the court to infer that, insofar as the plaintiff is concerned, under the court orders of 11 May 2009, as amended on 29 June 2009, Mr Frenken's evidence was required to be served by 4 August 2009, or possibly 28 August 2009.

42 Secondly, Mr Frenken's statement in my view could not reasonably be described as 'purely responsive' in content. Mr Frenken carried out repair work to the rig which was the subject of evidence in the plaintiff's three primary witness statements served in May 2009: Mr Molatlhegi pars 78 - 79, 83 - 90; Mr Ntloedibe pars 95 - 96; and Mr Bareki pars 56 - 72, 74 - 78, 94. Mr Frenken's activities were always part of the plaintiff's case that the rig had not been commissioned by the defendant. The plaintiff at the hearing of this application said that the defendant's witness statements also referred to Mr Frenken's work and that Mr Frenken's statement served 29 August 2009 was 'purely responsive' to the statements served by the defendant. I do not accept that submission. Mr Frenken's statement covers ground in the plaintiff's previous statements, but with considerably more detail, and involving the expression of opinion evidence. It could not reasonably be regarded as 'purely responsive' in its content.

43 Thirdly, the other witness statements served by the plaintiff in late August 2009 were headed 'Responsive statement of ...'. In contrast, Mr Frenken's statement was not so described. Fourthly, the responsive statements which were served, expressly addressed in a responsive way, paragraphs of the defendant's witness statements. Mr Frenken's statement, on the other hand, is a narrative complete in itself and makes no reference to the defendant's statements. Fifthly, the partner of the plaintiff's solicitors' firm, in his letters serving the responsive statements, described each statement as a 'responsive witness statement'. One letter is dated 28 August 2009 and the other is dated 31 August 2009. On the other hand, his letter, bearing date 28 August 2009, enclosing Mr Frenken's statement, did not describe it as a 'responsive witness statement' but as Mr Frenken's 'witness statement'. Sixthly, Ms Batalin's affidavit contains evidence to the effect that the plaintiff had been seeking to obtain Mr Frenken's evidence since early 2008 and that he had only agreed to provide such evidence in August 2009. The clear implication is that had the evidence been available earlier, it would have been served, along with the plaintiff's other witness statements, and not left until late August 2009. Seventhly, although the evidence discloses that there was considerable correspondence passing between the parties since 29 August 2009, in none of that correspondence did the plaintiff's solicitors refer to Mr Frenken's statement as a responsive witness statement or contend that it was one.

44 The circumstances referred to above raised for consideration whether the plaintiff's advisors had held the genuine belief, at the time that Mr Frenken's statement was served, that it was 'purely responsive', or whether his statement had merely emerged at a point in time which, perhaps serendipitously from the plaintiff's perspective, coincided with the time for serving responsive evidence. At the hearing, I raised with counsel for the plaintiff the question of whether there was evidence from the plaintiff's solicitors to the effect that they held a genuine belief that Mr Frenken's statement was 'purely responsive' at or around the time of its service. In particular, I raised a question as to the absence of an affidavit from the partner responsible for the carriage of the matter for the plaintiff who apparently wrote the letters of service which I have described above. Counsel's response was to the effect that I would need to deal with the evidence as it stood.

45 In my view, the plaintiff's application is to be considered on the basis that Mr Frenken's statement was required to be filed and served by 5 May 2009, and that it was nearly four months late.

46 It is appropriate to now return to the relevant chronology of events.

47 On 28 November 2008 Justice Templeman made orders in general conformity with the usual Commercial and Managed Cases (CMC) List orders. Included in those orders were directions in the usual form in connection with the obligation on a party properly to address any default by that party of a court order where the default had subsisted for five working days (in the case of a first default), and two working days (in the case of a default which had been preceded by earlier defaults of that party). Templeman J ordered:

In the event of default by any party for five (5) working days in complying with a direction for the taking of any interlocutory step, the solicitor for the party in default shall submit to the solicitor for the other party a proposed revised timetable for the interlocutory steps outstanding. If the party in default has previously defaulted, the period of five (5) working days is reduced to two (2) working days (Order 11).

48 Templeman J's orders then included the standard directions which were to be complied with once the party in default had submitted its proposed revised timetable. The terms and intention of the orders are that once the party in default has proposed a revised timetable, if agreement cannot be reached, the party in default is to return the matter to the court for 'review' and further directions. Accordingly Templeman J's orders also included:

If both parties do not consent to the proposed revised timetable, the solicitor for the party in default shall forthwith secure the re-listing of the matters for review by the Case Manager so that appropriate directions may be given (Order 15).

49 Under Templeman J's orders, the plaintiff was first required to serve its non-expert witness statements by 4 February 2009. An extension of time was granted.

50 The plaintiff was then required to file and serve its witness statements by 18 March 2009. There was then a further extension for the plaintiff's witness statements to be filed and served by 8 April 2009. That date too passed without compliance. The date was further extended to 5 May 2009. In compliance with that revised date, the plaintiff filed and served statements of three witnesses, none of whom was Mr Frenken.

51 On 29 June 2009 consent orders were made which included provision for the defendant to file and serve its witness statements by 14 July 2009 and for the plaintiff to file and serve any 'purely responsive' witness statements by 4 August 2009.

52 On 3 July 2009 the defendant filed and served its two witness statements.

53 On 29 August 2009 the plaintiff served Mr Frenken's witness statement, but did not file it with the court. It was approximately four months late.

54 The plaintiff served its two purely responsive statements on or about 31 August 2009.

55 On 4 September 2009 the plaintiff's solicitors provided the court with a minute of proposed consent orders for programming the matter through to trial. It was proposed that the court make the orders on the papers. Order 6 of the minute contained a proposed direction that 'any admissible evidence of [Mr Frenken] be taken by video-link from Botswana'. The court declined to make the consent orders proposed by the parties as the matter had been listed for trial on 12 October 2009 and the court was concerned about the state of the preparation of the case.

56 On 8 September 2009 the court emailed the parties advising that the matter would be listed for directions on 11 September 2009. The email said inter alia that the court 'will expect the parties to notify the court of the nature of [Mr Frenken's] evidence and whether that witness will provide a written statement ... [and] expects the parties to be in a position to generally discuss the nature of the evidence for trial'. (As noted above, Mr Frenken's witness statement had not been filed.)

57 On 10 September 2009 the defendant's solicitors emailed the plaintiff's solicitors stating, in effect, that the defendant had not yet received advice from counsel, and as a result had not yet decided whether, and if so on what basis, to object to the plaintiff's witness statements, including Mr Frenken's statement, and that it did not regard itself as being obliged, under the then current timetable between the parties, to notify the nature of its objections until 15 September 2009. The email also said that Mr Frenken's statement had been 'put forward' as a 'reply witness statement', although, as I have said, there is no evidence from the plaintiff that it was served as a responsive statement. Perhaps the writer of the email assumed that it was a 'reply' statement because it was served in late August when the plaintiff served its responsive witness statements. The reference here does not settle a disquiet as to the adequacy of the plaintiff's evidence in this application.

58 On 11 September 2009 the directions hearing was held. Various orders were made including orders by consent that 'any admissible evidence' of Mr Frenken be taken by video-link (Order 8), and that any party intending to object to the admissibility of any witness statement advise its objections to the other party, and the grounds for objection by 15 September 2009 (Order 4).

59 It appears remarkable at least in hindsight that, on that occasion, the court was not informed of the true position with respect to Mr Frenken's evidence. This was the first directions hearing after the plaintiff served a statement four months out of time, in respect of a trial then four weeks away.

60 It must have been obvious to the parties that the very purpose of the directions hearing was to address, or at least reveal and bring to the surface, issues of which the parties were aware which could potentially have the prospect of disrupting an orderly run-up to trial and the orderly conduct of the trial itself.

61 The plaintiff, the party in default in respect of the late service of Mr Frenken's statement, did not draw the court's attention to the fact that Mr Frenken's statement had not been served in accordance with the court's previous orders and was significantly late, and that it had not complied with Justice Templeman's compliance directions to rectify that default. Even if the plaintiff's conduct stemmed from a genuine belief that Mr Frenken's statement was 'purely responsive', there were, in my view, no proper grounds for that belief.

62 The defendant let the court assume that the nature of any objections to Mr Frenken's statement would be technical, evidentiary objections in relation to hearsay and the like, as that was the natural meaning of Order 4. The defendant was more intent on adhering to an earlier timetable which governed objections to evidence generally, rather than giving due consideration to whether Mr Frenken's statement required particular attention for the purposes of the hearing on 11 September 2009. Nevertheless, it remains important to note that the defendant was not the party in default.

63 On 16 September 2009 the defendant served its objections to the plaintiff's witness statement. It included an objection to the whole of Mr Frenken's evidence on the ground, in effect, that it was not responsive.

64 The parties then conferred over the next week or so, but there is an evident degree of rancour in this case, and no resolution was reached. The dispute is now to be dealt with a few days ahead of the trial.

65 The trial is listed for five days. The case involves the commissioning of a drilling rig. There is a 100 paragraph statement of Mr Frenken which was served approximately four months out of time, on which the plaintiff seeks leave to rely.

66 Mr Frenken's evidence is to the effect that his firm carried out certain repair work to the drilling rig, principally after July 2007. He says he did so at the request of the defendant and that he was paid by the defendant for that work. Mr Frenken goes on to describe in considerable detail the nature of the work he carried out and in the course of doing so he offers comments critical of the defendant and the drilling rig supplied by the defendant, including opinion evidence to the effect that the rig had basic faults in its manufacture and that it was poorly designed.

67 Ms Batalin, in her affidavit of 25 September 2009, gives evidence of events leading up to the service of Mr Frenken's statement. She says that in late March 2008 and early April 2008 the plaintiff telephoned Mr Frenken to enquire if he would be prepared to swear an affidavit for use in these proceedings. Mr Frenken said that he would not, at least at that stage, wish to become involved in the matter. Ms Batalin also says that in the first half of 2009 Mr Frenken was again asked if he would provide evidence for the plaintiff in the proceedings. Again, the answer was in the negative. Mr Frenken said he did not want to be involved, he did not want to appear to take sides, and he was too busy. Ms Batalin then says that on or about 4 August 2009 Mr Frenken provided a facsimile communication to the plaintiff, following which she was instructed by the plaintiff to contact Mr Frenken again to enquire whether he would provide a witness statement. She says that Mr Frenken agreed. As a consequence, she says Mr Frenken's statement was obtained and served on 29 August 2009. Ms Batalin's statement also annexes various correspondence between the parties in relation to Mr Frenken's statement thereafter.

68 In opposition to the application, the defendant relies upon an affidavit of Ms Andonis sworn 2 October 2009. Ms Andonis says, in effect, that the defendant's solicitors received no information prior to 29 August 2009 that the plaintiff might be relying on Mr Frenken's evidence. She says that the defendant has not filed any witness statement since the witness statements which it filed on 3 July 2009. She says that she has been informed by Mr Hanias, the principal of the defendant, that the defendant has not had an opportunity to travel to Botswana for the purpose of being in a position to adequately respond to Mr Frenken's statement.

69 Both parties filed further affidavits (Ms Batalin dated 5 October 2009, and Ms Andonis on 6 October 2009), essentially annexing further correspondence. The latter included correspondence from the defendant's solicitors raising questions of further discovery in relation to Mr Frenken's evidence.

70 In cases where an indulgence is sought, particularly in or close to the trial where there is an obvious potential for serious disruption to the litigation, there should be a proper explanation for the application, showing that it is brought in good faith and bringing to the court's attention, in a candid way, the circumstances giving rise to the application: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 83 ALJR 951 [103], [107] - [109] (Aon Risk Services v ANU) .

71 As I have said, the plaintiff's affidavits do not depose to a genuine belief that Mr Frenken's statement was purely responsive. In that event, and having regard to the matters in [36] - [43] above, I am not satisfied that a complete and candid explanation has been given in this application. Also, the language used in Ms Batalin's affidavit of 25 September 2009 (pars 8 - 9), does not allow the reader to discern when, precisely, in the period 4 - 29 August 2009, the decision was made definitely to adduce evidence from Mr Frenken. The closer it was to 4 August 2009, the more important it would have been to take earlier steps to raise the issue properly with the defendant and, absent agreement from the defendant, the court.

72 If leave is given, the plaintiff will be able to adduce Mr Frenken's evidence, notwithstanding serious delay. The benefit of that evidence to the plaintiff is not entirely clear at this stage. The plaintiff in its written submissions said that it 'was relevant to the issues in dispute', and that 'it is in the Defendant's interests for the trial to proceed without evidence from Mr Frenken'.

73 In this regard, it is appropriate to consider the nature of the plaintiff's case with respect to the commissioning. The pleading now identifies the alleged nature and scope of the commissioning obligation. It pleads, in effect, that it was a term of the contract that the defendant would commission the rig by operating it for a period of at least three weeks so as to demonstrate a reasonable continuing functional capacity for various purposes. The breach is said to be the failure to do that.

74 Whether the defendant operated the rig for three weeks so as to demonstrate a reasonable functioning capacity for the various pleaded purposes is a question of fact. Mr Frenken's evidence does not appear to bear at least directly on that question of fact. His criticisms, including evidence concerning defects in manufacture and poor design arguably raises issues of fitness for purpose or merchantable quality, of which there is no complaint. To that extent, his evidence might be regarded as not assuming great significance in the plaintiff's case.

75 On the other hand, in the event that his evidence is shown at trial to have importance to the plaintiff's case on commissioning, the defendant says that it should have been given a proper opportunity to deal with it. The defendant says, first, that it will be required to attempt to deal with that evidence, and put on its own additional evidence, including potentially, expert evidence, under the pressure of intensive preparation for trial and in a limited timeframe, when in fact had the statement been served in compliance with the court's orders, the defendant would have had some two months (between May and July) to deal with such evidence. It says that it is placed in a difficult position through no fault of its own. The defendant secondly says that it has been denied the full benefit of any interlocutory processes available to it to obtain access to Mr Frenken's documents and to communications between Mr Frenken and the plaintiff. It also submits that it has not had the opportunity of going to Botswana to review the state of the rig, as it would require, having regard to the nature of Mr Frenken's evidence referred to in [66] earlier.

76 In regard to the defendant's first point, I think there is considerable merit in this. The plaintiff nevertheless says that as the defendant has had the statement since 29 August 2009 it should be ready for trial, in any event. I think this submission understates the difficulties. In addition to the usual intensive preparation for a five day trial, including usual CMC directions, the defendant has, in the last few weeks had to deal with new pleadings, and most recently, the plaintiff's strike-out application (which has not succeeded) as well as this application. The plaintiff also says that the substance of Mr Frenken's evidence appeared in an affidavit of another witness in an earlier unsuccessful summary judgment application. That, in my view, does not address the defendant's difficulties in that it was entitled to assume, by 5 May 2009, that Mr Frenken would not be giving evidence. In any event, the abbreviated nature of that document and its limited content could not reasonably be regarded as putting the defendant on notice of all the matters referred to in Mr Frenken's witness statement.

77 As to the second point, the defendant says that it wishes to obtain further discovery from the plaintiff in relation to the plaintiff's communications with Mr Frenken. It is too difficult at this stage to evaluate the prospects of success of any further discovery application, but I would not infer that the contention lacks bona fides. Had the evidence been served on time, the usual interlocutory processes would have been worked through.

78 The third point also has some merit. Despite the fact that the defendant and its expert witness saw the rig in Botswana prior to the expert giving his report, that was before Mr Frenken's statement had been served. In my view there is a degree of injustice in the defendant and its expert being denied the opportunity to review the rig further, having regard to the precise content of Mr Frenken's evidence.

79 Accordingly, if the plaintiff is given leave so as to adduce Mr Frenken's evidence, and the trial proceeds as scheduled, I consider that the defendant will suffer unfair prejudice from the late service of Mr Frenken's statement.

80 The alternative might then be to grant the plaintiff leave, and adjourn the trial to allow the defendant a reasonable opportunity to deal with the evidence. That result would need to be considered in light of the court's objectives enshrined in O 1 r 4A and r 4B of the Rules, and the importance of the observance of case management principles, as recently explained by the High Court in Aon Risk Services v ANU. Adjournments are not to be considered solely by reference to whether the prejudice to the other party could be compensated by costs. Whatever costs are involved, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. The time of the court is a publicly funded resource and inefficiencies arising from the vacation or adjournment of trials are to be taken into account. So too is the need to maintain confidence in the judicial system. Case management considerations are important and must be given proper weight. The facts of substantial delay and wasted costs and the concerns of case management are obviously of importance and are to be taken into account: Aon Risk Services v ANU [5] - [6], [92] - [102], [111] - [114].

81 Taking everything into account, on balance I think the interests of justice lie in refusing the plaintiff leave. Accordingly I would dismiss this application.

Subject to Order 2, the time for the defendant to file and serve its amended defence be extended to 24 September 2009.
The words in par 7.4 of the amended defence 'affirmed the Supply Contract and' be struck out.
The plaintiff's application filed 2 October 2009 to strike-out paragraphs of the defendant's amended defence be dismissed.
The plaintiff's application dated 25 September 2009 to extend the time for the filing and service of the witness statement of Mr M Frenken be dismissed.

Aon Risk Services Australia Ltd v Australian National University

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (97 paragraphs)

ATTORNEY-GENERAL OF BOTSWANA -v- AUSSIE DIAMOND PRODUCTS PTY LTD [No 2] [2009] WASC 301 (8 October 2009)

Parties

Legislation Cited (1)

Cases Cited (3)