Carna Group Pty Ltd v The Griffin Coal Mining Company

1. Leave is granted to each of the respondents to withdraw the admissions made in their defences as described in the interlocutory applications that were filed by the first respondent on 24 June 2020, the second respondent on 24 June 2020 and the third respondent on 23 June 2020.
2. The respondents pay the applicant's costs thrown away by reason of further amendment to the defences. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MCKERRACHER J: 1 The respondents apply to withdraw admissions contained in their defences as to the termination of a contract. The application is opposed. To avoid unnecessary repetition, these reasons should be understood in the light of earlier interlocutory reasons. In particular, my reasons in Carna Group Pty Ltd v Griffin Coal Mining Company (No 3) [2020] FCA 576 set out the relevant factual background (at [4]-[29]) and these reasons adopt the same defined terms. 2 Although the relevant pleas vary in their wording across each of the respondents' defences, the admissions sought to be withdrawn are, in substance, that: (a) on or about 23 February 2014, Carna terminated the Contract, or alternatively the Contract came to an end; and (b) on or about 14 March 2014, Carna and Griffin entered into the Substituted Contract; 3 All respondents contend the matter concerns a question of law and argue that such admissions would not bind the Court in any event: see Shine v Williams [2007] WASCA 194 per Buss JA and Murray AJA (at [26]). 4 Griffin says that the admissions are of legal conclusions that were made when Griffin was represented by another legal practitioner. More importantly it says that if leave is not granted to withdraw the admissions, Griffin will be required to proceed to trial based on a legal position which is contrary to the certificate signed by its legal practitioner, as to which it relies upon Damberg v Damberg [2001] NSWCA 87 per Heydon JA (at [160]) (Spigelman CJ and Sheller JA agreeing) where it was said: In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed. A similar caution appears to apply in relation to an assumption or agreement that foreign law is the same as the lex fori. 5 Griffin also refers to Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317, although that decision concerned the withdrawal of an admission on appeal. 6 The second respondent, Mr Roy, says that he was not a party to the Contract and any 'admission' by him in relation to it is not material. Nor is he legally qualified or otherwise qualified to opine on the correct legal conclusion or make admissions about it. It remains the case that Carna carries the burden of satisfying the Court that the contractual position was as it alleges. An admission by Mr Roy does not establish that matter, and the withdrawal effects no change as to the extent of the matters Carna must establish as part of its case. 7 All respondents emphasise that the relevant pleas were prepared prior to discovery. Since 3 December 2018, there have been approximately 50,000 documents discovered and produced by subpoena. The withdrawal of the admissions by Mr Roy is said to arise from further consideration of the correct legal characterisation of the matter in light of the matters evident on discovery. 8 It is emphasised by Mr Roy that the amendments do not raise any new factual issues and there is no prejudice to Carna in any relevant sense. Witness statements have not yet been exchanged and documents have not yet been put into a trial bundle. The trial is some nine months away. 9 Carna opposes the grant of leave. It says the respondents' applications seek to change the complexion of the case, add to the matters which need to be pleaded, and expand the scope of discovery and evidence to be led. There is no adequate explanation for the timing of the applications, and insufficient evidence has been tendered in support. The time for moving to trial on the case raised, and fought, has, it says, well and truly been reached. 10 Carna says that r 26.11(2) of the Federal Court Rules 2011 (Cth) (FCR) obliges the respondents to seek leave to withdraw any admission or other plea 'that benefits' Carna. That applies to the withdrawal of the 'admission or plea' by which the respondents admitted that the Contract was terminated on or around 23 February 2014, and the Substituted Contract was formed on or about 14 March 2014. It is irrelevant therefore whether the withdrawn pleas were admissions as to law or fact. They are admissions or pleas which benefited Carna. In any event, it is contended that whether Carna terminated the Contract is a matter of mixed fact and law, and not merely a legal conclusion: see, for example, Coliban Heights Pty Ltd v Citisolar Vic Pty Ltd [2018] VSCA 191 per Tate, Kyrou and McLeish JJA (at [46]), citing J Kitchen & Sons Pty Ltd v Stewart's Cash & Carry Stores (1942) 66 CLR 116 per Latham CJ and McTiernan J (at 126-127). 11 Carna accepts that in deciding whether to grant leave to withdraw, the Court has a broad discretion. The overriding consideration will be what is in the interests of justice, considering the circumstances of the particular case at hand. In particular, the Court may consider: (a) the circumstances in which the admission came to be made; (b) the reasons given for the application to withdraw the admission; (c) the time for which the admission has stood on the Court record, and any unexplained delay in applying to withdraw the admission; (d) the strength of any evidence or case advanced that the admission is incorrect; (e) the competing prejudice suffered by the parties; and (f) modern case management objectives. see, for example, Juno Pharmaceuticals Pty Ltd v Millennium Pharmaceuticals, Inc [2019] FCA 526 per Besanko J (at [38] and the cases cited therein); Ansell Healthcare Products LLC v Reckitt Benckiser (Australia) Pty Ltd (No 2) [2016] FCA 765 per Rares J (at [49]-[54] and the cases cited therein). 12 Where a party makes an admission which is accepted by its opponent and acted upon, that party should not be permitted to withdraw the admission without good cause: Optical 88 Ltd v Optical 88 Pty Ltd [2010] FCA 310 per Yates J (at [31]), citing with approval Australian Competition and Consumer Commission v Construction, Forestry Mining and Energy Union [2007] FCA 1390 per Finn J (at [4]). 13 Carna argues that the interests of justice are best served by this case continuing to proceed on the long standing premise that the Contract was terminated and the Substituted Contract formed. 14 Carna points to the fact that the admissions that the respondents seek to withdraw have stood on the record for 18 months. In those 18 months, the respondents have brought multiple interlocutory applications predicated on the Contract being terminated on or about 23 February 2014, and the Substituted Contract forming on 14 March 2014. These include, the third respondent, Mr Riordan's, and Griffin's applications dated 28 and 29 November 2019 (respectively) seeking summary judgment in respect of the Cash Support Representation, in which Mr Riordan accepted, in his affidavit sworn in support of the application, that Carna commenced work pursuant to the Substituted Contract on or around 24 March 2014. Additionally, since 30 October 2018, Griffin has pursued a cross-claim against Carna predicated on breaches of the Substituted Contract. 15 Carna complains that the respondents' explanation for the withdrawals is that they have reconsidered their position in light of the 'voluminous' discovery. But their change of mind is 'apparently derived' from four documents, all of which are key documents. Carna says that these documents have been well known to the respondents since 2014 and three were put again to Mr Riordan in 2016 (and two of them were discovered in this proceeding in early 2019). The documents are as follows: Document Date Description Document ID Production and Disclosure Information 30.01.2014 Invoice 3581 (Mobilisation Fee Invoice) CAR.001.010.9763 Sent to Mr Riordan and Griffin on 31 January 2014 (see JFS-4). Produced as part of Carna's discovery on 1 March 2019. 23.02.2014 Carna termination letter (2014/0011) GD1.001.002.1674 GRF.002.001.2622 (Multiple IDs) Provided to Griffin on or around 23 February 2014. See JFS-7 for Mr Roy's acknowledgment of receipt. MFI60, put to Mr Riordan on 13 April 2016 in examinations in COR 220 of 2015 (see JFS-9 at 137). 23.02.2014 Carna's second letter to Griffin dated 23 February 2014 (2014/0012) CAR.001.035.8523 GRF.002.001.2624 (Multiple IDs) Sent to Griffin on 24 February 2014 (JFS-5). See, also, JFS-7 for Mr Roy's acknowledgement of receipt. MFI61, put to Mr Riordan on 13 April 2016 in COR 220 of 2015 (see JFS-9 at 143-151) Produced as part of Carna's discovery on 28 March 2019. 14.03.2014 Carna letter to Griffin purporting to withdraw termination (2014/0014) CAR.001.035.8553 Sent to all respondents on 14 March 2014 (see JFS-8). MFI64, put to Mr Riordan on 13 April 2016 in examinations in COR 220 of 2015 (JFS-9 157-158).