Carter v Greenwoods & Freehills Pty Ltd

Judgment 1This judgment concerns an application by the defendant, Greenwoods & Freehills Pty Ltd ("Greenwoods"), for its costs of a notice of motion it filed to strike out the plaintiff's Further Amended Statement of Claim ("FASOC") in whole or in part. As I will explain, in light of the events that transpired it was not necessary for the Court to decide the motion. 2Greenwoods' notice of motion was filed on 21 February 2014. Its written submissions were filed on 14 March 2014. In broad terms it raised two complaints. The first was that the FASOC pleaded the existence and breach of a duty of care owed by Greenwoods while it employed Mr Carter, pleaded some breaches of that duty but did not plead, or properly plead, the suffering of any loss or damage as a result. The second was that the FASOC inadequately pleaded a case of breach of contract. Allied to this complaint was a general assertion that the pleading was embarrassing as a matter of form and, in particular, that it failed to "observe the distinction between pleading material facts" and "providing particulars". 3Mr Carter's written submissions in response were filed on 28 March 2014. Attached to the submissions was a proposed second further amended statement of claim ("SFASC") in respect of which leave to file was sought. This version of the pleading deleted the claim in negligence but sought to expand the pleading of a breach of contract and to clean up various cross referencing errors. 4Greenwoods' notice of motion was listed before me for hearing on 4 April 2014. In oral argument, counsel for Greenwoods contended that the proposed SFASC was objectionable because the expanded contract claim was, in effect, a claim for damages from an employer in respect of an "injury" and was in this case precluded by the Workers Compensation Act 1987 (NSW) and the Workplace Injury Management and Workers Compensation Act 1998 (NSW). It was also contended that the SFASC was objectionable as a matter of form. 5I raised a concern with the parties about the form objections. As they were raised in a general way I invited Counsel for Greenwoods to identify them in detail. This was undertaken. The position then taken by Senior Counsel for Mr Carter was that, without conceding their validity, she wanted the opportunity to address them. The motion was adjourned to allow that to occur. This points to a difficulty with form objections to pleadings. If they are upheld they often lead to a party being given the opportunity to replead. If there is an underlying issue of principle between the parties it can often take many iterations of a pleading before it is isolated. 6Subsequently a revised version of a proposed SFASC was served by Mr Carter on Greenwoods. This led to some form of truce. On or around 29 May 2014 the parties agreed on orders granting Mr Carter leave to file a revised version of the proposed SFASC and directing Greenwoods to file its defence. The Court made those orders in chambers on 30 May 2014. At the time the Court queried with the parties whether they had agreed on an order dealing with the fate of the notice of motion. No response was received. In light of that, the only sound basis that I can proceed upon is that the notice of motion will be treated as dismissed. The orders agreed to by Greenwoods were inconsistent with it still drawing breath. Unless I am advised to the contrary, I propose to make an order otherwise dismissing the notice of motion within seven days of the publication of this judgment. 7On 6 June 2014 Mr Carter filed the SFASC. It included a number of changes in the form in which various facts were pleaded compared with the version served in March 2014. However it also clarified and possibly expanded upon the allegations of breach of contract. In particular, new paragraphs 55C to 55F specifically pleaded certain breaches of express terms of Mr Carter's employment contract which were only hinted at in the earlier iterations of the pleading. 8Greenwoods seeks its costs of the motion. In effect it contends that it was only its notice of motion that resulted in Mr Carter finally pleading his cause of action in a proper form, both by observing the distinction "between pleading material facts and particulars" as well as identifying the precise matters said to constitute a breach of his employment contract. 9Mr Carter resists Greenwoods' application. He contends that the costs of the notice of motion should be the costs in the cause. He points to five matters namely (i) that Greenwood's notice of motion was not heard on its merits; (ii) that it did not and could not succeed on its principal claim, namely that the whole of the case should be struck out on the basis that it was in substance a claim for some form of personal injury damages; (iii) that Greenwoods did not adequately particularise its form objections in advance of the hearing of the notice of motion; (iv) that it has not yet suffered any "significant prejudice" as it has yet to file a defence; and (v) that it only made the form amendments as a compromise in order to avoid further disputation. 10Two relevant principles or set of principles concerning the awarding of costs are engaged by this application. The first is that in the ordinary course a party who amends a pleading pays the costs of and occasioned by the amendment (Uniform Civil Procedure Rules 2005 (NSW), r 42.6). Mr Carter appeared to recognise this, but by his fourth point noted above sought to suggest that it had no practical effect in this case. Nevertheless I see no reason why such an order should not be made in this case on the basis that the costs of Greenwoods' motion are not part of those costs. 11The second set of principles is those that govern the awarding of costs when there has not been any hearing on the merits (see Re Minister for Immigration and Ethnic Affairs (Cth); Ex parte Lai Qin [1997] HCA 6; 186 CLR 622 ("Lai Qin") and One.Tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270; 101 FCR 548 ("One.Tel") at [6] per Burchett J). In such circumstances the Court does not undertake a hearing of the case or motion where it has no jurisdiction to determine who should pay the costs (Lai Qin at 624 per McHugh J). However it can consider if one party has behaved unreasonably in pursuing or resisting the application (Lai Qin id). Further it can consider whether one party would almost certainly have succeeded (Lai Qin at p 625) or whether it effectively surrendered by the course it adopted (One.Tel at [6] per Burchett J). A party's protestation that they did not surrender is not determinative. 12Consistent with these principles, I will not re-hear Greenwoods' notice of motion just to determine costs. Nevertheless, I consider that Mr Carter's initial submissions of 28 March 2014, which included a revised pleading, were an implicit acceptance that Greenwood's notice of motion would inevitably have succeeded in large measure had it proceeded on the basis of the existing pleading. However I am not able to conclude that Greenwoods' complaint about the proposed SFASC enclosed with Mr Carter's affidavit of 28 March 2014 making a claim for personal injury damages would have been likely to succeed. In fact I am doubtful that it would have. There were, however, some obvious form defects in the proposed SFASC, but I am not in a position to determine their significance without conducting the inquiry that Lai Qin states should not occur. 13In these circumstances I consider that Greenwoods should have its costs up to a time shortly after its receipt of Mr Carter's submissions dated 28 March 2014, but that each party should pay their costs of the notice of motion thereafter. Greenwoods should have also some portion of its costs of seeking costs. Otherwise I remind the parties of the matter noted in [6] above. 14Accordingly the Court orders that: (1)The plaintiff pay the defendant's costs of its notice of motion filed 21 February 2014 up to and including 2 April 2014, and half of its costs of preparing its written submissions filed 16 June 2014. (2)There be no order as to the costs of the balance of the notice of motion filed 21 February 2014. (3)Otherwise the plaintiff pay the defendant's costs of and occasioned by reason of the filing of the Second Further Amended Statement of Claim on or about 6 June 2014.