A notice of motion was filed on 15 June 2017 by the first defendant in these proceedings, Coles Supermarkets Australia Pty Ltd, referred to in this judgment as "Coles", seeking leave to file a proposed second cross-claim against the second defendant. In support of that application it relied upon two affidavits of Michael Cooper sworn 14 June 2017 and 20 June 2017 respectively. The proceedings concern a claim for damages for personal injury arising out of a slip and fall at a car park at premises on the corner of Harbour Drive and Earl Street, Coffs Harbour. This injury occurred in April 2014 and these proceedings were commenced in December 2015 by statement of claim suing both Coles, as the occupier of the premises, and the second defendant, Canzon Pty Ltd, as the owner of the car park.
Broadly, the statement of claim asserted that the defendants owed a duty to the plaintiff to keep the car park safe and to manage risks presented by slippery floors within the underground car park. There is a specific pleading of breach of duty of care directed at the defendants that the car park was not maintained to provide a safe walking surface with a minimum coefficient of friction of 0.4 when wet.
The application for leave to file the proposed second cross-claim has come before me as duty judge on Friday 23 June 2017 where the matter has been listed for hearing commencing Monday 3 July 2017. Accordingly, the application needed to be treated urgently and this judgment is given, in effect, ex tempore (although I have had a short period between cessation of argument and the formulation of these reasons to consider it). I was assisted by written submissions from counsel for the parties and also assisted by oral argument.
The application is made pursuant to rule 9.1 of the Uniform Civil Procedure Rules 2005 which provides that a party may make a cross-claim in proceedings commenced by a statement of claim within the time limited for the party to file a defence or within such further time as the court may allow. Obviously, Coles is seeking leave to file a cross-claim well after the time period initially prescribed by the rules.
The situation is a little more complex than that in that during the management of these proceedings between their commencement in December 2015 and now, there have been multiple mentions before the Registrar of this Court making specific orders regarding the time within which any cross-claim must be filed. Added to this problematic situation is that Coles, the applicant, specifically disavowed any intention to rely on a cross-claim in correspondence on 6 April 2017.
A further problem for Coles in their application is that having received advice on 24 April 2017 apparently to the effect that they ought to file a cross-claim against Canzon, they failed to serve any such proposed document until 2 June and failed to file any application to proceed that way until 15 June. I will return to these matters in this judgment.
It is obvious that any exercise of powers under the rules must be exercised in accordance with the overriding purpose requirements of the Civil Procedure Act 2005. That is, to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 56 provides accordingly. In addition, s 56(3) states that the parties are under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court to comply with directions and orders of the court.
Whilst generally it is desirable that all relevant issues in a set of proceedings be heard together once, there are circumstances in which that cannot occur. In my view, this is one such set of circumstances.
The procedural history indicates that on 23 March 2016, the Registrar made an order that cross-claims be filed by 17 May 2016. On 14 June 2016, the Registrar made another order that the defendants file and serve any cross-claims by 29 July 2016. On 19 October 2016, the Registrar made a third order requiring cross-claims be filed and served by 18 November 2016. At this directions hearing, he also set the matter down for hearing on 3 July 2017 for five days. In February 2017, the Registrar ordered that Canzon file and serve their intended cross-claim by 3 March 2017. Canzon did so, and this document, which it appears was filed on 23 February 2017, set out certain bases upon which it alleges that Coles should indemnify it in respect of the proceedings brought against it by the plaintiff. It pleaded, amongst other things, contractual counts relating to an agreement for lease and a deed of variation of agreement for lease and a further lease, the latter dated July 2012.
Specific pleadings were made in relation to damages for breach of contract, in particular that there were express terms in the lease between Canzon and Coles that Coles must keep the premises in good repair and keep the external and internal building walls clean and tidy at all times.
A defence to cross-claim was filed on behalf of Coles putting in issue a number of those matters, but still no cross-claim was filed on behalf of Coles seeking contribution on any expressed basis from Canzon.
This series of events was then followed by an email from McCabes Lawyers to the plaintiff's solicitors and the solicitor for the second defendant, noting that the Registrar had listed the matter for directions on 10 April 2017 in relation to a proposed cross-claim to be filed by Coles. This email, authored by Mary Kinna, an associate of McCabes, confirmed that she had now received instructions not to file a cross-claim and, accordingly, recommended that the parties email the Registrar seeking to have the 10 April 2017 directions hearing vacated. There is an email from the Registrar of this Court noting that whilst it was too late to vacate that directions hearing, there was no need for the parties to attend.
Subsequent to these events, it appears that counsel was retained who gave advice that a cross-claim ought to be filed by Coles, although there was delay between receipt of that advice, 24 April 2017, and obtaining instructions and preparing the document and providing it to parties. This was not accomplished until 2 June 2017, some five weeks later. Given the pressing hearing date of 3 July 2017 this further delay is very problematic for Coles' application for leave.
Evidence before me indicates that Canzon fairly immediately indicated that they would not consent to the proposed second cross-claim and although at that stage the plaintiff's solicitor indicated they did not oppose that step, but needed to confirm instructions, it is evident from the written submissions filed on behalf of the plaintiff and the oral arguments made by senior counsel for the plaintiff today that they are not prepared to consent to anything that would derail the hearing date for the plaintiff, which has been set down for some eight months.
Counsel for Coles, who informed me he only came into the matter in the 24 hours prior to the hearing of the application, made oral submissions that acknowledged that there were some aspects of the proposed second cross-claim that raised new issues, in particular in relation to the ingress of water. He argued that as part of any proper investigation of proceedings from the outset, Coles should have looked at questions of whether they had any valid cross-claims against other parties and should also have considered whether there were any issues of design or construction that they needed to investigate and pursue. He also argued, as was covered in the written submissions served on behalf of Coles, that there was a large amount of material relevant to the proposed second cross-claim that was already, in effect, on the table as a result of the cross-claim filed by Canzon and the defence and the contractual relationship between them. He also offered the view that Canzon should be able to be in a position to be ready for the trial given the issues that have been on the table since the beginning of the proceedings and the plaintiff's allegations made from the beginning, and even more so, given the exchanges between the defendants based around the contract between them and other related issues.
In response, counsel for Canzon argued that there was a concern that a number of orders made by the Court had not been complied with in relation to the filing of the cross-claim and that there had been a specific disavowal of reliance on a cross-claim made in April 2017. He argued that there was insufficient explanation for the delays, in particular, since the receipt of counsel's advice in April 2017. He argued that what now is being raised, and is entirely new, is a case of faulty construction and design, which raises other considerations for his client, including its reliance upon competent builders contracted to complete the premises, as well as a potentially nuanced basis upon which his client may seek to argue that another corporate structure may have responsibility for knowledge relating to water ingress issues. This is of particular significance because Canzon instructs him without insurance.
Counsel for Canzon pointed out specifics in the proposed second cross-claim that raise new matters. Some of these are as follows: Paragraph 10 raises the issue of the "design brief" which tracks back to March 2007 and will require significant investigation and historical interviews; paragraph 14 of the proposed second cross-claim is problematic in the vagueness of its pleading. To deal with what is asserted in it, counsel for Canzon submitted that there would need to be investigation of documents related to exchanges between Coles and Canzon, what engineers and other subcontractors knew and said, as well as Coles' knowledge of what is said to be a purported shortcutting of the waterproofing aspects of the construction.
An issue was also raised in paragraph 15 of the proposed second cross-claim regarding a certification and parties' respective reliance upon this is now on the table. It is alleged by Canzon's counsel and senior counsel for the plaintiff that that is, in effect, new, and may be difficult to meet at this late stage.
Some other problems with the pleading are highlighted by counsel for Canzon. In particular, that there is no specific Civil Liability Act s 5D pleading and the proposed second cross-claim needs some particulars requested and replied to in order to zero in on salient issues.
Counsel for Canzon submitted that it is, in effect, impossible to respond to the cross-claim and keep the hearing on track. Canzon relied in particular on paragraphs 36 and 37 of the affidavit of Elizabeth May Herbert sworn 21 June 2017 as to the things that would need to be done to prepare a proper response. I observe that the matters set out in paragraphs 36 and 37 of the affidavit of Ms Herbert appear to be entirely appropriate, competent steps that would need to be taken in response, probably as a minimum. I accept the submission made by counsel for Canzon that this would be an impossible series of tasks to complete in seven days, let alone seeing how that could then comply with the requirements of the Uniform Civil Procedure Rules to ensure that issues lists, statements of witnesses, witness lists and appropriate assessment of timing of evidence and completion of the case could be provided to any trial judge.
As things currently stand, a notice of discontinuance was filed today, 23 June 2017, by the plaintiff and I gave leave for that notice to be filed, there being no valid argument that could be raised on behalf of Coles as to why I ought not permit it to be filed. This means that as the case currently stands, the second defendant, Canzon, has no role in the proceedings to go forward on 3 July 2017 unless I grant leave for Coles to file their proposed second cross-claim.
It appears to me inevitable that if I grant that leave, the hearing date will not be able to be maintained. Senior Counsel on behalf of the plaintiff submitted that he too had concern regarding the role of the "Certificate of installation" mentioned in paragraph 15 of the proposed cross-claim and how that document may be brought into play and that it would not be fair for the plaintiff to lose his hearing date when he has done everything he was supposed to do and complied with the Court's orders for preparation.
In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [5], [23] and [30] per French CJ, and [98] and [111] per Gummow, Hayne, Crennan, Kiefel and Bell JJ, the High Court dealt with issues relating to the proper exercise of a judge's discretion when considering applications for adjournment and amendment.
This case is one that raises parallel considerations because what the second cross-claim proposes is a new position being taken by a party to proceedings who has chosen not to take such a position during the progress of the matter over the 18 month period since the statement of claim was filed in December 2015.
In Aon at [5], French CJ stated that an adjournment application cannot be decided entirely on whether prejudice can be compensated by costs:
…whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system.
Gummow, Hayne, Crennan, Kiefel and Bell JJ at [98] made reference to the minimisation of delay and expense as essential elements of a just resolution of proceedings:
Of course, a just resolution of proceedings remains the paramount purpose of r 21 [equivalent to Civil Procedure Act 2005 (NSW) s 56]; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account … It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
And at [111]:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an applicant for leave to amend…
In my view those remarks are salient for this particular application. I am not content that the explanation for delay contained in the affidavits of Michael Cooper is sufficient to persuade me that it is reasonable to exercise my discretion to extend time to allow the filing of the proposed second cross-claim. It appears to me on the evidence provided that it is clear that the hearing date would have to be vacated if that occurred.
It is also clear to me that the issues that arise on the proposed second cross-claim as well as the cross-claim initially filed by Canzon against Coles amount to duty of care and contractual issues that would be able to be appropriately litigated in separate contribution proceedings.
I accept the acknowledgement by counsel for Canzon that the task of Coles will be more difficult perhaps in pursuing contribution in separate proceedings than it would be in the primary proceedings. However, in my view, the justice of the circumstances in this case requires that the plaintiff not lose his hearing date and I am not persuaded that it is appropriate to grant leave to the applicant, Coles, to file their second cross-claim given the extensive delay, their previous breach of Court orders in relation to the filing of the cross-claims, the length of time for which the hearing date has been in place and the irreparable prejudices that would occur to the plaintiff in particular if the hearing date is vacated.
Accordingly, the notice of motion is dismissed.
[2]
Costs of the application
In relation to costs, counsel for Coles stated that he had nothing to say in relation to the costs of the motion being payable to the proposed cross-defendant Canzon, but submitted that the plaintiff's involvement in the application was unnecessary and that they should bear their own costs of the application.
I do not accept that argument with respect to the plaintiff. The plaintiff's counsel had an important role to fulfil in reviewing and assessing the application and in appearing to protect the hearing date set by this Court for the benefit of their client. Accordingly, in my view it was appropriate that counsel attend to be heard on the motion and to be ready to contest any matters that may arise during argument.
Counsel for Canzon submitted that if the application by Coles failed, Coles should pay his client's costs of the application on an indemnity basis assessable and payable forthwith. I understand that this application is based in particular on the letter of 2 June 2017 from Canzon's solicitor to Ms Kinna of McCabes Lawyers, which sets out various failures on the part of Coles to comply with orders made by the court and the views of the solicitor with conduct that they would need to consider joining other parties to the proceedings, investigate the new allegations and determine whether expert liability evidence is required if leave was granted to file that cross-claim. It was also noted in that letter that the solicitors intended to rely upon the letter to seek costs if Coles proceeded to file a notice of motion seeking leave to proceed with the proposed second cross-claim.
I note that that letter did not state that it was the intention to seek an order for indemnity costs or an order that the costs be payable forthwith. I do understand the argument made on behalf Canzon and the submission made that the persons standing behind Canzon have had to make financial arrangements to finance their defence of this proceedings to date because they are not insured. The motion has failed so Canzon is entitled to its costs on the motion of both, but I am not, however, persuaded that it is appropriate that there be an indemnity costs order or an order that costs be assessed and paid forthwith.
Accordingly, the order I make in relation to costs is that the applicant on the notice of motion pay the costs associated with the notice of motion of the plaintiff and the second defendant.
[3]
ORDERS:
Accordingly, I order:
1. The Notice of Motion filed by the first defendant on 14 June 2017 is dismissed.
2. The applicant on the Notice of Motion to pay the costs of the Notice of Motion of the plaintiff and the second defendant.
3. The hearing date of 3 July 2017 is confirmed.
[4]
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Decision last updated: 28 June 2017