Aon Risk Services Australia Ltd v Australian National University

The amendment application 17 After the commencement of the hearing before me on 24 May 2010 senior counsel for the Plaintiff ascertained that although the Occupational Health and Safety Act 2000 was assented to on 26 June 2000 it and the Regulation made under it did not commence until 1 September 2001. The transitional provisions, however, preserved the operation of the Construction Safety Regulations until the commencement of the Occupational Health and Safety Regulation in September 2001. 18 Mr Gross formed the view that reg 73(2) could not apply as there was a distinction between the delivery phase and the construction process, and the Plaintiff was only involved in the delivery phase. However, Mr Gross ascertained on 27 May that the Court of Appeal in Multiplex Constructions (NSW) Pty Ltd v Lopez (2004) NSWCA 319 had taken a broad view of what amounted to the carrying out of construction work with the result that there was at least an arguable case that there was a breach of statutory duty in relation to reg 73(2) Construction Safety Regulations. 19 In the meantime I had given leave on 26 May 2010 for the filing of a Second Amended Statement of Claim which had expanded the particulars of negligence of each of the 2 Defendants. However, no particular pleaded against the First Defendant made reference to any statutes or regulations. The claim against the Second Defendant contained the particulars relying on failures to comply with reg 34, reg 35, reg 36 and reg 37 of the OH&S Regulation. 20 The proposed Third Amended Statement of Claim, the subject of the present application, alleged against both Defendants a breach of a duty of care and also a breach of statutory duty as a result of a failure to comply with reg 73(2) of the Construction Safety Regulations. 21 As I have said, the explanation for the late amendment was Mr Gross's discovery and realisation that at the time of the relevant accident reg 73(2) of the Construction Safety Regulations was still in force and, because of what was said by the Court of Appeal in Lopez, it was arguable in the present case that there had been a breach of that Regulation by both of the Defendants. 22 An affidavit was also produced from Mr Stanton who deposed to his approach when he prepared the Amended Statement of Claim in October 2008. In effect, his evidence was that he believed that the Construction Safety Regulations were repealed by the Occupational Health and Safety Act 2000 and were no longer in force at the time of the accident. 23 An affidavit from Rebecca Mulae, the solicitor with the carriage of the proceedings for CSR, said that when she was served with the report by Mr Grieve she concluded that the only part of it that contained an opinion in relation to CSR was that part dealing with liability at common law. She formed the view that that part of the report said little against CSR and was largely inadmissible. She said she knew that there had been no pleading of a breach of regulations against CSR. 24 She did not consider the report strengthened the Plaintiff's case against CSR and for that reason she did not obtain an expert report in response. 25 She said that if there had been a pleading against CSR based on allegations of breach of regulations she would have retained an expert to provide advice in relation to the matter. She said that if the present proposed amendment was allowed that was what she would need to do. Her evidence in relation to that was scarcely challenged in cross-examination. 26 The solicitor with the carriage of the matter for the Second Defendant, Mr Rory O'Connor, also swore an affidavit. He first came to deal with the matter for Watpow in April 2009. Although by that stage the Amended Statement of Claim had been filed he said he formed the view that the OH&S Regulation did not apply to the Second Defendant as those Regulations did not come into force until September 2001, several months after the Plaintiff's accident. 27 He expanded on this evidence in the witness box where he said that he believed, in any event, those Regulations would not apply to his client because the client had sub-contracted the work to other parties. 28 He said in his affidavit that the introduction of a claim based on breaches of reg 73 and reg 74 of the Construction Safety Regulations raised new and different issues because of the non-delegable nature of the statutory duties provided by those Regulations. He pointed out that those Regulations gave rise to such matters as whether Watpow was engaged in building work or construction work as defined in the Act, whether that work encompassed work which had been sub-contracted out, namely, the concrete pumping work, and, if so, whether Watpow failed to take measures that were advisable and necessary within the meaning of reg 73 having regard to the matters referred to in reg 74. He said he would need to obtain evidence from a suitably qualified expert as to what measures were advisable and necessary. 29 Mr O'Connor was cross-examined at greater length about his knowledge of the OH&S Regulation and the difference that would be brought about by the proposed amendments where a breach of statutory duty was alleged compared with the position where the OH&S Regulation had only been used as part of the particulars of negligence in the earlier form of the pleading. I found Mr O'Connor to be an impressive witness who was on top of his material and had a good understanding of the law associated with accidents that involved the Regulations in question. 30 I accept the evidence of both Mr O'Connor and Ms Mulae as to the need for them to obtain experts to deal with the proposed amendments to the proceedings. I accept that in the circumstances of the conduct of the case prior to the present application they had no need to obtain an expert report.

Legal principles 31 The proper principles to be applied when considering applications to amend and/or to adjourn proceedings are now to be found in the High Court's decision in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27 (2009) 83 ALJR 951. Mr Gross drew my attention to a number of passages in the judgments in that case but first drew attention to what the plurality judgment said at [55] and [58] that the starting point must be the Rules (or in the present case the legislation and Rules) which govern applications to amend. In that regard he drew my attention to ss 56, 58 and 64 Civil Procedure Act 2005 but he might well also have directed attention to s 57 of the Act. 32 He drew my attention to some statements made in the annotations in Ritchie's Uniform Civil Procedure Service NSW at para [64.5] where the following appears: Discharge of the obligation requires consideration of the nature of the proposed amendment, and its consequences for the other parties and the expeditious conduct of the proceedings.

The proper result of that consideration must depend on the particular circumstances. But the obligation to comply with the overriding purpose permits recognition of a generality that leave to amend should be granted if the application is made in a timely manner and for a proper purpose: Aon Risk Services Australia Ltd v Australian National University (2009 ) 258 ALR 14; 83 ALJR 951; [2009] HCA 27; BC200906905 at [98]; Clough v Frog (1974) 4 ALR 615 at 618; 48 ALJR 481; BC7400058; Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 309; Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437; 50 ALJR 666; Commissioner for Railways v Bielewicz [1963] NSWR 482; [1963] SR (NSW) 466; Abela v Giew (1964) 81 WN (Pt 1) (NSW) 344; Nominal Defendant v Cameron [1988] NSWJB 135.

That generality is particularly apt where the proposed amendment merely reformulates a claim or defence within the scope of the existing factual issues. 33 I also have regard to some later annotations which provide: Leave may even be given at a late stage of the proceedings. For example, leave may be granted on appeal where the amendment merely provides more specific allegations of a matter already raised on the existing pleadings: Government Insurance Office (NSW) v Phillips (NSWCA, Full Court, 27 August 1992, BC9201645) (specific pleading of a defence of inevitable accident); or leave may be granted after the conclusions of the evidence where it merely brings formal pleadings into conformity with the evidence that has been adduced: Leotta v Public Transport Commission , above ; National Australia Bank Ltd v Nobile (1988) 100 ALR 227 at 235; (1988) ASC 55-657; cf Ting v Blanche (1993) 118 ALR 543; (1993) ATPR 41-282; BC9305082. 34 The passages Mr Gross took me to in Aon Risk were not only passages which favoured the position for which he was arguing. In the judgment of French CJ he drew my attention to paras [28], [30] and [35]. In particular, I note what the Chief Justice said in para [30] as follows: It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes. 35 In para [35] he drew attention to the need to avoid refusing amendments in order to be punitive particularly where it was a late amendment application. 36 In the plurality judgment he drew my attention to paras [38], [39], [47], [52], [53], [73]-[75], [79], [82]-[83], [93]-[94], [102]-[106] and [108]-[110]. He argued that the course of events in Aon Risk were far removed from the position in the present case and drew attention particularly to what the High Court referred to as the forensic choice that had previously been made by the party now seeking to amend. 37 In that regard, Mr Gross argued that I should infer from the affidavit of Mr Stanton that the only reason a breach of statutory duty had not been pleaded as was now sought to be done was because an error had been made in relation to the applicability of the Construction Safety Regulations. He submitted that no particular forensic choices had been made in the way that was criticised in Aon. 38 Mr Gross argued also that the question of a safe means of access had always been the issue between the Plaintiff and the 2 Defendants. In those circumstances he submitted that the precise standard of care, whether the duty to take reasonable care at common law or the higher duty said to be imposed by reg 73 should not make a difference to the way the case needed to be prepared and run by the Defendants. He correctly submitted that the prejudice that had to be considered was not prejudice associated with having to meet the substantive claim that was directed to procedural matters that might arise as a result of a proposed amendment. Hence, he submitted, the fact that contributory negligence was not a defence to the proposed new claim could not be regarded as relevant prejudice.

The amendment should be refused 39 In my opinion, it is not appropriate to permit the Plaintiff to amend to plead the new causes of action for breach of statutory duty for the following reasons. 40 First, the proceedings have been on foot for more than 6 years and this is the first time a breach of statutory duty has been sought to be pleaded. Certain factors make that consideration of greater moment. The Plaintiff had from October 2005 a report from an engineering expert suggesting that there had been breaches not only of sections of the Occupational Health and Safety Act 1983 but also of reg 73 made under the Construction Safety Act 1912 which is now sought to be pleaded. Despite that, no attempt was made to amend the Statement of Claim in any form until 2008. Further, despite the existence and service of that report the proceedings commenced in the District Court based on a common law claim for negligence only. Although the Plaintiff subsequently changed his solicitors he has retained the present solicitor since October 2006. That solicitor has taken no steps until the present application to seek to add a count for breach of statutory duty. 41 The Plaintiff was represented by experienced counsel in the area of industrial and motor vehicle claims. The fact that the latest counsel to come into the matter did not appreciate until the last day or two before the application but after the hearing commenced that a breach of statutory duty might be available cannot itself be a justification for permitting an amendment at this late stage. 42 Secondly, it is no answer to say that a means of safe access has always been an issue in the proceedings. The duty that is imposed by reg 73 is accepted by everyone, including Mr Gross, as being a stricter and higher duty than the common law duty of reasonable care in relation to means of access. Indeed, it is because the duty is a higher one that Mr Gross wishes to amend. It is not a sufficient answer to say that the Defendants were always required to examine the factual matrix surrounding the means of access and that a statutory count merely puts a different legal complexion on the matter. Particularly in relation to the First Defendant which has never, hitherto, needed to consider its obligations under Acts or Regulations, it is now confronted with needing to examine the position whether it was under some sort of statutory obligation. It does not seem to me at all unreasonable, in those circumstances, for it to say that it needed to get expert assistance from an engineer well versed in statutory obligations in these sort of claims. 43 Even from the point of view of the Second Defendant against whom provisions of the OH&S Regulation had been relied on as particulars of negligence I accept Mr O'Connor's evidence that it would be necessary for him to obtain expert assistance (as well as examining the legal implications arising from the statutory allegations) whether his client was engaged in building or construction work that had been sub-contracted out and whether his client had failed to take measures that were advisable and necessary within the meaning of reg 73. 44 It does not seem to me at all implausible that both Defendants would wish to engage an expert to deal with the intended breach of statutory duty count. Their evidence in that regard was not really challenged. Mr Gross says that it is no place of experts to opine on whether particular statutory provisions have been breached. Whilst on one view that is strictly correct it was certainly not the course followed by the Plaintiff's own expert in his report. Moreover, expert reports obtained in industrial accident cases frequently contain the expert's expression of opinion about whether particular factual matters are sufficient to comply with the requirements of some statutory provision. That is an expertise that many of them have acquired in the course of investigating industrial accidents. The Plaintiff put forward Mr Grieve to do precisely that. 45 Mr Gross says that because of what was contained in Mr Grieve's report the Defendants ought to have anticipated that there might be some amendment to plead a statutory count. I have the utmost difficulty with that submission. First, although that report was served in October 2005 the proceedings ran for some time in the District Court based on a common law negligence claim only. The first time there was any amendment to introduce statutory matters with the inclusion of the OH&S Regulation as particulars of negligence against the Second Defendant was in the Amended Statement of Claim of 2008. Nothing was said in that regard about the First Defendant. 46 Having read the report of Mr Grieve I can well understand why neither of the Defendants would have paid it much regard in terms of what they had to meet since it was largely directed to matters (especially in the case of the First Defendant) which were not articulated in the pleadings or in the issues. It does not seem to me that a party is under an obligation to assume that an amendment might be made at some future time to incorporate what is contained in an expert's report into a pleading, particularly when that expert report was served on the Defendants 4½ years earlier with no amendment to the pleading forthcoming. 47 Thirdly, this case was closely case managed by Johnson J from November 2009 to May 2010. Section 57 Civil Procedure Act says that cases are to be managed having regard to 4 factors being: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. 48 Section 57(2) provides that the Civil Procedure Act and the rules of court are to be so construed and applied so as best to ensure the attainment of those objects. 49 I accept the difficulties of counsel coming into a case many years after it has commenced and a short time before it is due to be heard. However, the Plaintiff has had the same solicitor since 2006 and had experienced senior and junior counsel (prior to the present ones) for an 18 month period before the present counsel were retained. It may be that a mistake was made in relation to the applicable Regulations, but the right of the Plaintiff to seek an amendment because of any such mistake has to be balanced both in case management terms under s 57 and under the overriding provisions of s 56 where other parties will undoubtedly be affected by the proposed amendment. Because I accept the evidence of Ms Mulae and Mr O'Connor, the result will be, therefore, that if the amendment is permitted there will need to be an adjournment of the proceedings to enable the Defendants to obtain expert assistance and to consider their position. 50 Fourthly, there would have to be some doubt, even putting aside the delay caused by any adjournment, of the ability of the Plaintiff to pay the costs thrown away by reason of the adjournment. Although Mr Gross argues that none of the other parties in their cross-claims realised that they could rely on reg 73 and, therefore, the Plaintiff should not be required to pay all the costs thrown away by reason of the adjournment, that does not seem to me to be any consideration against the usual rule. As Ms Mulae explained, her usual practice followed in this case was that the cross-claim (except for the separate contractual counts) merely repeated the claim that the Plaintiff made against CSR. 51 Had the amendment been allowed and the proceedings adjourned the Plaintiff would have been required to pay the costs of all of the Defendants and the Cross-Defendants occasioned by the adjournment. The Plaintiff has already had one cost order made against him for the adjournment of the hearing in the District Court. The only way those costs, and any further costs ordered to be paid, are likely to be paid is out of the Plaintiff's verdict, if he receives one. That does not seem to me to be a matter in the Plaintiff's interest. One the other hand, if the Plaintiff does not ultimately receive a verdict, all of the Defendants and Cross-Defendants would have a costs order that was never, from a practical view, going to produce any costs. 52 This matter of costs which must be taken into account in accordance with the High Court's judgment in Aon in para [111] together with the statement there made that the fact of substantial delay and wasted costs and the concerns of case management will assume importance on an application for leave to amend. 53 Fifthly, it cannot be ignored that the course of the litigation might have been different if the breaches of statutory duty had been pleaded in a timely manner. If, as the Plaintiff asserts, there is a higher and stricter duty on the Defendants from a breach of statutory duty it is certainly possible that, there having been a mediation in the proceedings, matters may not have reached the present point. 54 I do not consider it appropriate that proceedings which commenced more than 6 years ago and which have run for a period of time on 2 separate occasions should be adjourned again to enable the intended amendments to be made. I do not consider it appropriate in the light of what the High Court said in Aon particularly at paras [93], [99] and [111]. I do not think that the matter is answered by saying that the controversy or issue was in existence prior to the application for amendment - see Aon at [82]. Although the issue of a safe means of access was in issue the different and higher duty involved, including the issue of whether the Defendants were involved in building and construction work relevantly for the purposes of the Regulation, was not in issue or controversy. 55 It was for these reasons that I refused the application. 56 On the 5th day of hearing Mr Gross made a further application to amend which involved adding a particular of negligence to the claim made against the Second Defendant as follows: Contrary to Regulation 73(2) of the Construction Safety Regulations (NSW), failing to provide and maintain safe means of access for the Plaintiff. 57 This amendment was expressly said to be not a claim for a breach of statutory duty but a claim only that a breach of a Regulation might amount to evidence of negligence in the same way, for example, that the breach of Motor Traffic Regulations might be evidence of negligence in the driving of a motor vehicle. The amendment was opposed by Mr Scott for Watpow particularly on the basis that reg 73(2) reads in full: [73] Any person who directly or by his servants or agents carries out any construction work shall take all measures that appear necessary or advisable to minimise accident risk and to prevent injury to the health of persons engaged in such construction work and for this purpose, without limiting the generality of the foregoing, he shall subject to Regulation 74:

… (2) provide and maintain safe means of access to every place at which any person has to work at any time; 58 Mr Gross made it clear in argument that he only wished to rely on that part of reg 73 that was referred to in sub-reg (2). That involved a non-reliance on all of the words after the word "shall" in the introductory words to the Regulation. In other words, Mr Gross said that his reference to reg 73(2) would mean only that he had shown there was a breach because there had been failure to comply with the Regulation as follows: Any person who directly or by his servants or agents carries out any construction work shall provide and maintain safe means of access to every place at which any person has to work at any time. 59 As I mentioned earlier, Mr O'Connor gave evidence on the application to introduce a breach of statutory duty count into the Statement of Claim. Mr O'Connor made it clear during the course of that evidence that reg 73(2) was not of concern to him because the access road was not part of the site and the Second Defendant's argument was that they were not relevantly engaged in the construction work because they had sub-contracted everything out. On that approach he took the view that the decision in Buckman v Flanagan (1974) 133 CLR 422 meant that the Regulation would not apply to his client. He also made reference to the decision of Uniting Church v Takacs [2008] NSWCA 141. 60 The impression I obtained from Mr O'Connor's evidence was that, whilstever there was no cause of action involving a breach of statutory of reg 73 there was no difficulty in dealing with a particular of negligence that merely involved that Regulation. Mr O'Connor did not suggest that it would be necessary now to engage an expert if reg 73 was only included as a particular of negligence. Ultimately, Mr Scott appeared to accept that with the limitation on the wording of reg 73(2) that Mr Gross identified the amendment would be able to be dealt with by Watpow. 61 In those circumstances, I granted leave to the Plaintiff to amend to add the particular concerned. Mr Gross has informed me that he will be preparing a document entitled Fourth Amended Statement of Claim which will deal with that amendment but will also exclude the proposed amendments and matters concerned with the OH&S Regulation that are no longer able to be litigated. 62 All the other parties apart from the Plaintiff ask for the costs associated with the application for leave to amend to file the Third Amended Statement of Claim. Mr Gross resists this on the basis that because the mistake in relation to which of the Regulations was applicable at the time was a mistake that all of the parties made it would be unfair to visit the consequences of that on the Plaintiff. That submission seems to be misconceived on 2 levels. First, it assumes that other parties made a mistake. Certainly, the evidence of Mr O'Connor, which I accept, was that he was aware that the OH&S Regulation had no applicability. 63 Secondly, and more fundamentally, the Plaintiff's application to amend was unsuccessful. The fact that a mistake was made is not an answer to why an unsuccessful application to amend based on that mistake should not be visited with the usual costs order. Any mistake in that regard is a matter that exists between the Plaintiff and his legal advisors, whether past or present. It is not something which, by no order being made, provides any justification for the other parties having to bear the costs of an application that they were in no sense responsible for. 64 In my opinion, the Plaintiff made an unsuccessful application to amend. Nothing has been shown to take the matter out of the ordinary rule that the Plaintiff's application was unsuccessful and he should pay the costs of the other parties. I note that the application was foreshadowed on the fourth day of the hearing. Affidavits were being prepared by the Plaintiffs, and the First and Second Defendants. The determination of the application took most of the fifth day of the hearing of the matter. 65 Since preparing these reasons there has been a resolution of all matters in the proceedings except the claim against the Second Defendant. The resolution amongst all of the other parties included an order that obviates the need for me to make a costs order arising out of this amendment application in favour of any party but the Second Defendant. 66 In relation to the application to file the Fourth Amended Statement of Claim the usual rule is that the party that amends must, after the conclusion of the proceedings, pay the costs of and occasioned by the amendment: Rule 42.6 UCPR. There is no basis for departing from that rule in the present case. 67 I make the following orders:

1. The Plaintiff is to pay the Second Defendant's costs of the application to amend by the filing of the Third Amended Statement of Claim.

2. The Plaintiff is to pay the Second Defendant's costs of and occasioned by the amendment contained in the Fourth Amended Statement of Claim. **********

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