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[2008] QSC 150
General information, not legal advice.
Supreme Court of Queensland
2008-07-15
Martin J
Original judgment source is linked above.
Cantwell Lawyers for the first and second respondents
[1] The applicant (the plaintiff in the substantive action) seeks leave to withdraw an admission made in the reply filed on his behalf.
[2] On 23 February 2002 the plaintiff was navigating a vessel on the Coomera River. At the same time the defendant was navigating another vehicle moving in the opposite direction of the plaintiff in the same area of the Coomera River. The vessels collided. The applicant commenced proceedings in February 2005 against the first defendant alleging negligence on his part, and against the second defendant alleging vicarious liability. The plaintiff's claim is for an amount in excess of $2,000,000.
[3] In the reply filed by the applicant the following was contained in paragraph 3:
"With particular reference to the allegations of contributory negligence in paragraph 17 of the Statement of Claim, the Plaintiff admits that he pleaded guilty to a charge for breach of s. 43(3) of the Transport Operations (Marine Safety) Act rather than contesting the same and to that extent, admits that he is contributorily negligent to the extent of not more than 25% but save as aforesaid, repeats and relies upon the facts contained in the Statement of Claim."
[4] The reply was filed on 15 September 2006. On 13 March 2008 the plaintiff filed an amended reply in which it purported to withdraw the admissions which had been made in paragraph 3 of the original reply. That immediately gave rise to correspondence from the defendants' solicitors notifying the applicant's solicitors that the provisions of r 188 of the UCPR require that a withdrawal made in a pleading can only occur with the court's leave.
[5] The applicant sought to rely upon affidavits of himself and of his solicitor Gregory Cecil Young. I will return to those later.
[6] During his submissions, Mr Griffin QC (who appeared with Mr Given for the applicant) confined the application to that part of paragraph 3 of the reply which admits that the applicant was "contributorily negligent to the extent of not more than 25%". In other words, the admission of the plea of guilty was no longer sought to be withdrawn.
[7] As is to be expected in an application such as this, the applicant referred to the decision of the High Court in State of Queensland v J L Holdings Pty Ltd.[1] In that case, the trial judge was faced with the following circumstances. The applicant had commenced proceedings in January 1994 seeking damages of approximately $60,000,000. Numerous causes of action were pleaded and one of them was to the effect that the relevant Minister, having given approval for a lease under certain legislation, was then obliged to endorse his consent under that legislation. In July 1996 the respondent sought to amend to raise a further point (which had never previously been relied upon) to the effect that the draft lease submitted for endorsement differed from that submitted pursuant to another part of the relevant Act. While accepting the explanation that the discrepancy between the two leases had only recently been noticed, the trial judge refused leave to amend the defence stating that the amendment potentially required substantial issues of fact to be raised, that the amendments would jeopardise the hearing date, that the loss of the trial dates was the most relevant consideration, and that this approach took account of a shift in attitude towards a party's right to present its defence being subject to some limitation.
In the joint reasons of Dawson, Gaudron and McHugh JJ, their Honours referred to the passage (upon which Mr Griffin QC also relied) in Cropper v Smith[2] where (at 710) Bowen LJ said:
"Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace."
[9] In considering that case, and an earlier decision of the High Court in Sali v SPC Ltd[3], their Honours said:
"...nothing in that case [Sali] suggests that those [case management] principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim."
[10] I note that in Dennis v Australian Broadcasting Corporation[4] Spigelman CJ (with whom Basten and Campbell JJA agreed) said:
"[28] The respondent invoked the authority of Queensland v J L Holdings Pty Ltd ... in support of its ability to amend, even for the fifth time. Case management practices in all Australian courts have changed significantly in the decade since that judgment. Although it remains binding authority with respect to the applicable common law principles, the circumstances of the case were significantly different from those in the present case and do not dictate its outcome. In any event, such principles can be, and have been, modified by statute both directly and via the statutory authority for Rules of Court.
[29] In this State J L Holdings must now be understood as operating subject to the statutory duty imposed upon the courts by s 56(2) of the Civil Procedure Act 2005, which requires the Court in mandatory terms -'must seek' - to give effect to the overriding purpose - to 'facilitate the just, quick and cheap resolution of the real issues in the proceedings' - when exercising any power under the Act or Rules. That duty constitutes a significant qualification of the power to grant leave to amend a pleading under s 64 of the Civil Procedure Act."
[11] Spigelman CJ then referred to other provisions of the New South Wales Defamation Act which were consistent with the objects set out in the paragraphs above.
[12] The provisions referred to by Spigelman CJ are very similar to those contained in r 5 of the UCPR:
"5 Philosophy - overriding obligations of parties and court
(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.
(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.
(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.
(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.
The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court."
[13] The decision in Dennis v Australian Broadcasting Corporation was not cited to me in argument and so the parties did not have an opportunity to argue whether or not the principles enunciated in it should be applied in this State. It remains a question for another day and for a higher court to determine whether or not the changes made by the UCPR have reduced or deflected the impact of the decision in J L Holdings. The analysis in Dennis does, with respect, appear to beg the question. For so long as pleadings are the determinant of the "real issues" in civil proceedings it will always be a requirement of a court to consider whether or not a refusal to allow an amendment will result in the court not dealing with the "real issues" - even if such a refusal is done justly, expeditiously and with a minimum of expense.
[14] Mr Street SC (who appeared with Mr Harding for the respondent/defendants) placed particular emphasis on the decision of the Court of Appeal in Ridolfi v Rigato Farms Pty Ltd.[5] In that case the plaintiff caused a notice to admit facts pursuant to r 189 of the UCPR to be served on the defendant's solicitors. One of the facts for which an admission was sought was that the alleged negligence and breach of duty had in fact occurred. The defendant's solicitors failed to respond to the notice as required notwithstanding a reminder from the plaintiff's solicitors of the effect of such a failure. When the matter came on for trial, counsel for the defendant made an application for leave to withdraw those admissions deemed to have been made by the failure to respond to the notice. The trial judge refused the application but allowed an adjournment in order that the defendant could reassemble the necessary evidence. So far as liability was concerned, the issue of alleged contributory negligence remained alive and the extent to which the (admitted) negligent acts and omissions of the defendant caused particular injury to the plaintiff remained fully an issue. At [12] of the reasons, de Jersey CJ noted:
"The catalyst for the attempt to withdraw from the deemed admissions was the change in the identity of the appellant's solicitors. The previous solicitors must be taken to have been aware of the consequence of not responding to the notice (which had been expressly, directly flagged in the clearest of terms), and that the respondent's solicitors were preparing for trial on the basis that the admissions were deemed to have been made."
"[13] Although the appellant's new solicitors contended by letter on 29 November 1999 that their predecessors "did not take instructions to respond to (the) notices", and although the appellant's counsel says in his outline of argument that the admissions deemed to have been made arose "inadvertently or without due consideration of material matters", there is no sworn evidence of those claims. There is indeed no sworn evidence of any explanation for the former solicitor's failure to respond to the notice.
[14] Therefore as the matter appears, the application to the learned judge was motivated by the attitude of the appellant's new solicitors: whereas their predecessors, taken to have been aware of the consequence of failing to respond, let the respondent's solicitors prepare for trial on the basis of the deemed admissions, making no move to set aside the admissions under rule 189(3), the appellant's new solicitors took a different attitude. It is difficult to see why a change in approach on the part of a party's legal advisers should in those circumstances warrant departing from the course previously set and on which the other party was reasonably relying."
[16] On appeal it was contended for by the appellant that, unless the admissions were allowed to be withdrawn, the matter would proceed to trial without examination of the circumstances of the incident in which the respondent was allegedly injured.
[17] De Jersey CJ dealt with that submission in the following way:
"[18] But that aside, the submission ignores the potentially important role of procedure, as reflected in rule 5(1)
'The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.'
It also overlooks injustice to the respondent were the appellant allowed to withdraw admissions on which for months the respondent - to the knowledge of the appellant - relied in preparing his case.
[19] Asked to exercise the discretion under rule 189(3)
, a court would ordinarily expect sworn verification of the circumstances justifying a grant of leave. Those circumstances may include why no response to the notice was made as required, the response the party would belatedly seek to make, and confirmation that the response would accord with evidence available to be led at a trial. Here none of those matters was so verified. Issues of prejudice may also fall for consideration upon the hearing of such an application.
[20] There is no principle that admissions made, or deemed to have been made, may always be withdrawn 'for the asking', subject to payment of costs. The discretion is broad and unfettered, as exemplified by Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 and Equuscorp Pty Ltd v Orazio [1999] QSC 354.
[21] The charter of procedure contained in the Uniform Civil Procedure Rules
cannot be approached on the basis that if important provisions are ignored, even if inadvertently (and that is not established here), the court may be expected to act indulgently and rectify the omission. Fulfilling procedural requirements will often contribute significantly to securing an ultimate result which may be considered just. Allowing the appellant to withdraw these deemed admissions would substantially erode the beneficial worth of a very important procedural mechanism directed, through expediting cases and reducing costs, to promoting the interests of justice.
[22] Parties do not have an inalienable right to a hearing of all issues on the merits. Rule 5(3)
, for example, confirms each party's obligation to proceed expeditiously, or risk sanctions (rule 5(4))
"[27] ... Some proper basis must be laid for that assertion, which would ordinarily include an explanation of how the earlier admission came to be made and why it should now be permitted to be withdrawn. That is not shown by saying simply that there has been a change of solicitors, or that it is possible to see that, before the admission was made, the issue of liability was an open question. Here the defendant has not condescended to swear to the circumstances in which the admission came to be made, or to show that it occurred by inadvertence, mistake or in some other way that might now justify its withdrawal."
"[31] Counsel for the appellant referred to the well known passage in the judgment of Bowen L J in Cropper v Smith (1884) 26 Ch D 700 at 710 where he said that the court ought to correct errors or mistakes in procedure made by the parties so that the matter was determined in accordance with the rights of the parties. That statement, though made over one hundred years ago, is still relevant, and it encapsulates a principle which a judge must always take into consideration in determining whether or not it is appropriate, for example, to allow a party to withdraw an admission. Essentially it is no more than a recognition that courts will, so far as possible, ensure that a party has a fair trial. But, for example, where the detriment or prejudice is self induced, the party may not be entitled to relief. So much is clear from the unreported decision of the Victorian Full Court in Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd, referred to at length and applied by Rogers CJ Comm D in Coopers Brewery Ltd v Panfida Foods Ltd (1972) 26 NSWLR 738 at 744. Rogers CJ considered that the statement of Lord Denning MR in H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703 that an admission made by counsel in the course of proceedings can be withdrawn unless the circumstances are such as to give rise to an estoppel were "words ... uttered in another age and in other circumstances" (746). Such an observation can even more forcibly be made and applied in the light of the UCPR.
[32] Certainly an admission flowing from the operation of r 189 should not be withdrawn merely for the asking. In my view a clear explanation on oath should be given as to how and why the admission came to be made and then detailed particulars given of the issue or issues which the party would raise at trial if the admission was withdrawn. Such a requirement is generally in accordance with the reasons of Roger CJ in Coopers and of Mackenzie J in Equuscorp Pty Ltd v Orazio (unreported, S9208/96, judgment 30 November 1999). That ought not be taken to be an exhaustive statement of what is required. Each case should be considered in the light of its own facts and the circumstances may well require even more extensive material in order to obtain leave to withdraw the admission."
[20] The application of the principles in Ridolfi was considered by Chesterman J in Cassie v Bogdan.[6] In that case there is an echo of the factual circumstances of the instant application. Cassie had sued Bogdan and her insurer for damages for a psychiatric illness said to have been induced by her experiences at the scene of a motor vehicle accident involving the motor car driven by Bogdan. In the plaintiff's statement of claim an allegation of negligent driving was made and, in their defence, the defendants pleaded that the motor vehicle accident was contributed to by the negligence of the first defendant for which the second defendant was liable for reasons explained elsewhere. Before Chesterman J, the defendants sought to deliver an amended defence which withdrew the admission of negligence on the part of the first defendant. The history of the matter as presented to Chesterman J was that, after receiving the notices required under the Motor Accident Insurance Act 1994, the claims clerk employed by the second defendant discussed the matter with a legal officer of the second defendant and came to the conclusion that the second defendant should admit partial liability. That was reflected in the defence. Some two years after that the defendants' solicitors inspected the scene of the collision with senior counsel and, after considering his advice, sought to withdraw the admission on the basis that the evidence assembled to date showed that there was a genuine dispute as to whether the first defendant drove negligently viz a viz the injured child. Chesterman J described it as follows:
"[16]... The admission that there was a degree of negligence was based upon the advice of a legal officer and solicitor who rejected the possibility that the defendants could succeed in denying that she had driven without reasonable care for the safety of the child. The advice of senior counsel is that there are good prospects of refuting that part of the plaintiff's case. The applicants accept that they have delayed in making the application, but submit that there is no relevant prejudice to the plaintiff. The evidence germane to the issue is available and the withdrawal of the admission will not materially delay the plaintiff in obtaining a trial."
[21] In considering the matter, Chesterman J referred to Cropper v Smith and Queensland v J L Holdings Pty Ltd and, with respect to Ridolfi, said:
"[26] The plaintiff's counsel pressed me with the decision of the Court of Appeal in Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455, but that case seems only to establish that the exercise of discretion by a judge to allow or refuse the withdrawal of an admission will rarely be disturbed on appeal because the discretion is broad and unfettered. The case is also authority for the proposition that ordinarily leave to withdraw an admission will be refused unless there is an explanation to show why the admission was made in the first place and why it should be withdrawn. Such an explanation has been provided by the applicants. The clerk and the solicitor thought a finding of careless driving was inevitable. The opinion of Senior Counsel is that it is not. There is evidence to support the second opinion.
[27] The judgments in Ridolfi may contain a hint that the underlying purpose of the Uniform Civil Procedure Rules, to facilitate the just and expeditious resolution of disputes economically, may militate against the grant of leave to withdraw admissions, which is not 'to be had for the asking' (per de Jersey CJ at 458 and per Williams JA at 461). These remarks are not easy to reconcile with the definite statement of principle expressed by the High Court in J L Holdings, which clearly subordinates the interests of efficiency and procedure to the interests of the judicial determination of disputes according to their merits."
[22] As I said above, the applicant relied on two affidavits - one sworn by him and another sworn by his solicitor. I ruled the affidavit of the plaintiff inadmissible as it went only to the reasons which he said motivated him to plead guilty to a charge of a breach of s 43(3) of the Transport Operations (Marine Safety) Act. The applicant no longer seeks to withdraw that admission and the plaintiff's affidavit went to no other material circumstance.
[23] The affidavit of Mr Young, though, sets out the history of the matter in brief and then contains the following:
"15. A report has been obtained from IMS Loss Adjusters and Marine Surveyors dated the 30th August, 2007. Now shown to me and marked 'GCY8' and exhibited to this my Affidavit is a true copy of the report. Statements have also been obtained from Mr Ben Hipkins, Mr David Lyons and Mr David Porter, true copies of which are now shown to me and marked 'GCY9' to 'GCY11' and exhibited to this my Affidavit ('the material').
[24] On a first reading of the affidavit of Mr Young, one might think that the material to which he referred was new material. New, in the sense that it had been discovered after the reply had been filed. That does not seem to be the case. The report referred to by Mr Lieberman purports to be a report directed to the Supreme Court of Queensland and to a firm of solicitors in New South Wales. It sets out in some detail the documents relied upon to prepare the report. The most recent document referred to is dated 28 July 2006. I note that the reply was filed on 15 September 2006. The report by Mr Lieberman is not, the author candidly admits, an expert report. He describes it as "an assessment of the available evidence". There is nothing to suggest that any of the evidence upon which he has relied was not available prior to the reply being filed. Statements which are annexed to the material, although bearing dates after the reply, do not appear to have been substantially different from similar statements which were available before the reply was filed.
[25] In submissions, Mr Griffin QC accepted that the ground upon which the applicant relied to withdraw the admission of contributory negligence was that the facts which had always been available had been reassessed in the light of Mr Lieberman's report. It was accepted by Mr Griffin QC that his case was not based upon an assertion that there had been a discovery of a new fact.
[26] The report of Mr Lieberman would not, it appears to me, be admissible on the trial of this action as it is little more than a collection, in a rational and logical way, of the available material together with his comments upon that material. On the basis of his report, Mr Lieberman is not a person who would be entitled to give opinion evidence. His only obvious qualification is a degree in economics. I accept, though, that for the purposes of an application of this type the material contained in Mr Lieberman's report and the manner in which it is expressed can be sufficient to explain why there has been a change of attitude on the part of the applicant.
[27] There is, though, no direct explanation of the reasoning behind the earlier admission of contributory negligence. Mr Griffin QC said, when asked what the explanation for making the admission was, that "it's an inference to be drawn from the evidence of the plea of guilty and from what Mr Young has said". The limited extent to which Mr Young goes when dealing with this matter is found in paragraph 14 of his affidavit where he says:
"After delivery of the Defendants' Defence on or about 30th June 2006, Counsel was engaged to provide certain advices and to draw and settle a Reply thereto. On instructions from the Plaintiff, after having the benefit of our and Counsel's advice on the then prevailing information and in particular, having regard to the fact that the Plaintiff had pleaded guilty to a breach of s43 of the Transport Operations (Marine Safety) Act 1994, the Reply was then filed on 15th September 2006 containing the admission in paragraph 3."
[28] Mr Griffin QC accepted that the view previously held by the plaintiff's lawyers (that an admission of contributory negligence was appropriate) fell within the description of "error or mistake" that Bowen LJ referred to in Cropper v Smith.
[29] It may be that the manner in which Mr Young expressed himself in his affidavit (in paragraph 14) was designed to avoid a waiver of the privilege which would otherwise attach to the advice given to the plaintiff by both Mr Young's firm and by counsel engaged for that purpose. Whether such a waiver has occurred is not a matter for me. It can, though, be inferred that the plaintiff was advised that in the light of his plea of guilty and on the other information available, it was appropriate to concede contributory negligence up to 25%.
[30] What has occurred since then is not any discovery of new and relevant facts but rather a reconsideration of the facts which were always available prior to the filing of the reply.
[31] Notwithstanding the terms in which the Court of Appeal expressed itself in Ridolfi (in which there was no reference in the reasons to JL Holdings) it appears to me that the principles enunciated in J L Holdings must guide the exercise of discretion in this case. In Ridolfi the application for an amendment was made on the first day of trial following a deemed admission having occurred as a result of a failure to answer a relevant notice. In this case the matter has not yet been given a trial date but a request for trial date has been filed.
[32] The issue of contributory negligence would still be able to be ventilated whether or not this amendment was allowed. The pleaded case of the applicant includes one of contributory negligence and there was no submission to the effect that the defendants would be satisfied with a finding of contributory negligence of 25% based on the current admission. By allowing the amendment there will not be a substantial departure from the pleaded case so far as questions of contributory negligence are concerned. The defendant has not been lead to believe that there would be no requirement for it to deal with that issue and a distinction can be drawn between the admission in Ridolfi (which was a complete admission of negligence) and the admission sought to be withdrawn here. The defendants do not advance any argument that they would be prejudiced by this amendment. The admission of the plea of guilty remains in the pleading and the defendants will have some forensic advantage with respect to the acceptance of contributory negligence being later withdrawn.
[33] Although the evidence relating to the earlier admission made by the plaintiff is slim it is, I think, sufficient for the purposes of this application. Similarly, the evidence relating to the change in attitude is one with which many lawyers are familiar. It often occurs that, when a new eye is cast over the available evidence, a different conclusion is reached and a different case may be presented. There is evidence to support a conclusion that that is what has occurred in this case. The reliance of the defendants upon the remarks of de Jersey CJ in Ridolfi to the effect that a change in approach on the part of a party's legal advisors would not warrant departing from the course previously set should be read in the light of the circumstances of that case - in particular, the notice given by the solicitors to the previous solicitors of the effect of a failure to respond to the notice and the fact that the application to amend was not made until the first day of trial.
[34] I am satisfied that the applicant has established a case for amendment. I grant leave for the plaintiff to withdraw the admission contained in paragraph 3 of the reply dated 15 September 2006 by deleting from that paragraph all words appearing after the word "same".
Balnaves
Smith & Anor
(1993) 67 ALJR 841
(1997) 189 CLR 146
(1992) 26 NSWLR 738
(1972) 26 NSWLR 738