workforce and we are examining ways to accelerate the completion of the remaining works. As you are aware, under the terms of our head contract, we are obliged to submit the matter to the Architect for his determination as to the removal or retention of the concrete (see clause 220-4-05 of the Specification). We have done that and now await his direction. Yours faithfully, Robert F. Jones Manager NORTHERN TERRITORY ". 9. Subsequent correspondence was directed to particularizing the damage suffered by the plaintiff. Meetings were held between representatives of the plaintiff and the defendant and it was agreed that the work was "to proceed in the most cost effective and expeditious manner possible". See Minutes of Meeting between representatives of the plaintiff and defendant 1 December 1988 (part of Annexure RJ6 to the affidavit of Mr Jones). 10. One can only regret that the truly professional, sensible and responsible attitude which is exemplified in the correspondence and transactions between the representatives of these two companies up to this stage seems somehow to have come to an end. Exactly what happened I cannot say, but the unfortunate result is that negotiations which seemed to have every prospect of a pragmatic and amiable resolution, with credit to both sides, have now given way to the acrimony of litigation. 11. The plaintiff finally issued a Writ against the defendant on 8 June 1990. That Writ bore an endorsement of claim "for damages for $1,048,221-00 for breach of contract and negligence arising out of the supply by the defendant to the plaintiff of defective concrete on or about 26 and 27 November 1988 in relation to the construction of Northern Territory House in Darwin". The defendant entered an appearance on 11 July 1990. A Statement of Claim was issued on 13 July 1990 and a Defence and Counterclaim was issued on 17 August 1990. The defendant issued a Third Party Notice against Avery on 21 August 1990, and Avery entered an Appearance to the proceedings on 4 September 1990. The defendant had issued a separate Writ against Avery on 29 March 1989 and a Defence by Avery has been filed in those proceedings. 12. The plaintiff now seeks by this Summons filed 21 August 1990 that judgment be entered for it against the defendant for damages to be assessed. 13. In the course of argument before me, Mr Nosworthy, counsel for the defendant, foreshadowed an application to file and serve an Amended Defence. That was done some days after argument was completed but it is sufficient to say that appropriate submissions were made on both sides dealing with the matters foreshadowed as amendments and neither counsel seeks to put forward further argument. I give leave to file and serve the Amended Defence and will treat that as the Defence before me. The Counterclaim has not been amended. 14. The Statement of Claim sets out an agreement between the plaintiff and the defendant to supply and test concrete in connection with Northern Territory House. It alleges in paragraph 3 that the agreement was in writing constituted by (a) A purchase order (specified) and special conditions attached thereto. (b) The specification for the works (i.e., the construction of N.T. House) prepared by architects. By paragraph 4 the plaintiff alleges that the agreement contained (inter alia) the following terms:- (a) The defendant would supply and test concrete in accordance with the specification. (b) The defendant indemnified the plaintiff against any loss or damage for which the plaintiff was liable to any other person by reason of any wrongful act neglect or default of the defendant, its servants or agents in relation to the supply of concrete. (c) The defendant would remove all concrete rejected by the plaintiff and make good that part of the works affected. Paragraph 5 then alleges that the defendant in breach of the agreement supplied concrete which was defective and not in accordance with the specifications. Paragraphs 6 and 7 allege further and in the alternative breaches of a duty of care owed by the defendant to the plaintiff to supply it with concrete in accordance with the specification and adequate for the purposes for which it was supplied. Paragraph 5 therefore sounds in contract: paragraphs 6 and 7 in tort. Paragraph 8 specifies particulars of damage. Paragraph 9 seeks damages in the sum of $1,025,027-39 together with interest and costs. 15. As can be seen there is some variance between the amount of damages claimed in the Writ and that claimed in the Statement of Claim. The variance is in the defendant's favour and is, I understand, as a result of some more precise calculations by the plaintiff. I do not consider anything turns on this for the purposes of this application. 16. The Amended Defence makes the following admissions:- Paragraph 2:
that it has a special expertise in the supply of concrete for construction purposes. Paragraph 3: (a) that it

agreed to supply and test concrete in connection with the construction by the plaintiff of N.T. House. (b)
that it received from the plaintiff the purchase order, special conditions and specification referred to in paragraph 3 of the Statement of Claim. Paragraph 3A: Subject to the production of the purchase order, special conditions and specifications and reference to their full terms and effect at the trial admits that the terms alleged appear in the said documents. 17. The defendant does not admit:- (a) that it has at all material times held itself out as having special expertise in the supply and testing of concrete for construction purposes, as alleged in paragraph 2 of the Statement of Claim.

(b) that the contract was in the terms alleged by the plaintiff in paragraph 4 of the Statement of Claim. (c)
that it supplied concrete to the works that was defective and not in accordance with the specification. (d) that any supply by it of concrete was in breach of the terms of the agreement alleged by the plaintiff. (e) that it owed any duty of care to the plaintiff in the terms set out in paragraph 6 of the Statement of Claim. (f) that the plaintiff suffered the damage alleged in paragraph 8 of the Statement of Claim. 18. The defendant then specifically denies that the terms and effect of any agreement between the plaintiff and the defendant are as set out by the plaintiff. 19. The defendant alleges a different agreement. It alleges an agreement constituted by the sale dockets which accompanied all deliveries of concrete to the works and which were signed on each delivery by persons whom the defendant alleges were servants or agents for the plaintiff capable of binding the plaintiff to the terms and conditions contained in the sale dockets. These dockets contained, inter alia, the following conditions:- (a) "the company shall not be liable for and is hereby indemnified by the purchaser in respect of any claims made by or through the purchaser or any third party which arise out of any defects, shrinkages or other faults which may develop in the concrete and which are due to: (i) faulty handling, placing or curing of the concrete by the purchaser, or any other person; (ii) the addition of any water or other material to the concrete either before or after discharge from the delivery unit and without the written instructions of an authorised representative of the company. Drivers of delivery vehicles shall not, for any purposes arising under this contract, be deemed to be representatives of the

company; and/or (iii) the addition of any additives to the concrete at the request of the purchaser, unless an authorised representative of the company confirms the request in writing." (Clause A3) (b) "The company's guarantee of the strength of the concrete (subject to clause D2 below) ceases if the concrete is not in situ within 1 1/2 hours of leaving the plant or if any of the events referred to in clause 3 above shall occur. The time of leaving the plant is shown on the delivery docket." (Clause A5) (c) "In the event of any material supplied by the company under this contract being defective, the liability of the company (if any) shall be limited to the replacement of such defective material. All other guarantees, warranties, undertakings or representations express or implied and whether arising by statute or otherwise, are hereby expressly excluded (except to the extent only that such exclusion is prohibited by statute) and subject to the last mentioned exception these terms and conditions are the only terms and conditions of the contract between the company and the purchaser. These terms and conditions cannot be altered except in writing by the company's authorised representative." (Clause D2) (d) "The company shall not in any circumstances in any dispute be liable for any indirect or consequential loss or damage of any nature whatsoever." (Clause D3) ." 20. The defendant therefore alleges that the terms of the contract it sets up between the plaintiff and the defendant either constituted the true and only contract between it and the plaintiff, or excluded or overrode the original contract alleged by the plaintiff. This was not pleaded in the first Defence but is now pleaded in paragraphs 3A-I of the amended Defence. 21. By paragraph 5 of the Defence the defendant denies negligence and sets out that it acted with reasonable care and skill. 22. By paragraph 6 (as amended), the defendant, relying upon the terms of the contract it sets up by paragraphs 3A-I, and without admitting the supply of defective concrete to the plaintiff, pleads that its liability if any, is limited to the replacement of such defective concrete and does not extend to any indirect or consequential loss or damage. It alleges further that the terms of the plaintiff's contracts with its subcontractors precluded those subcontractors claiming damages against the plaintiff for delay, and the fact that the plaintiff had met those claims when it had no liability to do so precludes it from seeking damages under this head from the defendant. It alleges therefore that the plaintiff has failed to mitigate its damages. 23. By paragraph 8 of the Defence the defendant claims to be entitled to indemnity or contribution from Avery in the event of it being held liable to the plaintiff. 24. By paragraph 9 it alleges that the plaintiff is indebted to it in the sum of $614,399-29 for concrete sold and purports to set off that sum against any amount of damages it may be held liable to pay the plaintiff. 25. Paragraph 10 then constitutes the counterclaim for the same sum of $614,399-29. 26. I deal first with the Setoff and Counterclaim. I make the obvious comment that the defendant has already been given credit in the Statement of Claim for this item. The damages claimed are set out in paragraph 8 of the Statement of Claim and the figures are these:- Costs of removing defective concrete and making good the works $549,242-00 Delay and disruption costs

$1,094,278-00 $1,643,520-00 Less credit for concrete supplied by the defendant but not paid for by the plaintiff $618,492-61

$1,025,027-39 27. The discrepancy between the plaintiff's figure of $618,492-61 and the defendant's figure of $614,399-29 does not seem relevant to the argument particularly when the plaintiff's figure favours the defendant. Mr Nosworthy, however, puts it on a different basis. He submits that, on the defendant's argument, the claim for delay and disruption costs must fail as against the defendant, because that claim relates to monies which the plaintiff claims must be paid to subcontractors, but which, the defendant submits, the plaintiff is not bound to pay. A fortiori the defendant cannot be liable to the plaintiff. If that claim fails the plaintiff can claim, at most, the sum of $549,000; but it credits the defendant with a greater sum. The setoff or counterclaim therefore exceeds the claim and leave to defend must be given. Court v Sheen (1891) 7 TLR 556. Williams - Civil Procedure - Victoria - paragraph 22.06.65. 28. Insofar as the defendant's argument relates to payments made or to be made to the plaintiff's subcontractors by reason of delay, the defendant points to a clause in the plaintiff's contract with its subcontractors which provides that "the subcontractor's sole remedy arising out of a delay to the progress or completion of the works due to any reason whatsoever shall be an extension of time approved by Civil and Civic under Clause 5 of the Conditions and no costs or damages shall be payable by Civil and Civic to the subcontractor in respect of such a delay". However it is clear that the item "Delay and disruption costs $1,094,278" does not relate solely to claims by the subcontractors. More detailed particulars of this claim appear in correspondence between the parties. For instance, on 13 March 1989 Mr Jones, the plaintiff's manager wrote to Mr Lock setting out a summary of the various heads of damage claimed and giving figures which he described as "our best estimates to date". Those heads of damage related to claims for delay by subcontractors but contain a number of other items relating to damage directly sustained by the plaintiff itself and not by way of payment to subcontractors. These items were particularised by various documents and calculations annexed. I will not mention them in detail at this stage save to comment that, while the claims alleged as payable to the subcontractors constituted a substantial part, there are other significant losses said to be directly sustainable by the plaintiff. Furthermore, several meetings had by then been held between representatives of the plaintiff and the defendant, and I think it is fair to summarise those meetings as attempts to quantify the damage more precisely rather than to deny liability. Indeed the overall liability by the defendant appears conceded in such meetings e.g., Minute 1.01 of meeting of 1/12/88 - "Pioneer reconfirmed their acceptance of responsibility for supply of understrength concrete on 27th and 28th November ...". 29. The plaintiff's claim was more precisely particularised in the letter from Mr Jones of the plaintiff to Mr Faulkner for the defendant dated 16 April 1990. That is the letter which makes two basic claims, there referred to as, "A. Direct costs of demolition and reconstruction B. Delay costs." 30. The figures for A, are given as $549,242-00 and for B as $1,094,278-00 and, as can be seen, they correspond to the heads of damage claimed in paragraph 8 of the Statement of Claim though under slightly different descriptions. Turning, therefore, to B, the particulars given in the letter of 16 April 1990 are summarised under 4 heads:-

1. Prolongation/Disruption Claims

• Subcontractors $585,770-00

2.  Civil and Civic
   

Prolongation Claim $219,103-00 3. Administration and Offsite Overheads $64,390-00 4. Liquidated Damages under the Head contract $225,015-00. 31. It can be seen therefore that, even if the first item of $585,770-00 is subtracted from the plaintiff's claim, the remaining items (2, 3 and 4) total $508,508-00, and, when added to A, come to a figure of $1,057,750-00 which exceeds the defendant's Setoff or Counterclaim. The basis of the defendant's submission is not made out. 32. I turn therefore to the argument based on paragraphs 3E-I of the Defence. That was raised rather at the eleventh hour by the most recent affidavit of the defendant's solicitor, and was the reason why the defendant sought to amend its Defence. It relies upon the conditions appearing on the back of dockets which accompanied each delivery of concrete by the defendants and were signed by certain persons in the employment of the plaintiffs as they received the deliveries to which the dockets referred. The front of such dockets describes the amount delivered and gives various identifying data for that particular load including e.g., the number of the truck in which the concrete was delivered, the date of delivery, the time the load left the plant, the identifying number of the job etc. What Mr Nosworthy particularly relies on is an item at the foot of the front page of the document which bears this indorsement:- "Signed by or on behalf of purchaser who accepts the terms and conditions of sale printed overleaf." 33. A number of these documents are exhibited to the affidavit of the defendant's solicitor and each such document has a signature after that indorsement. Mr Jones, the Northern Territory manager for the plaintiff identifies that signature. It is that of an employee of the plaintiff. He is, says Mr Jones, "a leading hand on the site and under the supervision of a foreman. He had no managerial or contractual duties on behalf of the plaintiff and was not held out by the plaintiff as having any such duties or capacities. He had no actual authority to enter into agreements on behalf of the plaintiff or vary existing agreements to which the plaintiff was a party". Later in his affidavit Mr Jones says, "Delivery dockets are signed by employees on site purely as a record of delivery by the particular truck driver at a particular time and are essential from the point of view of an organisation delivering goods or materials since they will not be paid on account unless they can produce delivery dockets. Other employees of Mr Carl's status or even lesser status sign delivery dockets for this purpose." These statements are not contradicted by the defendant and it seems to me that is because they clearly set out the true position. Every dictate of commonsense indicates that the primary purpose of the dockets was to act as a record of receipts for deliveries of concrete. 34. Nevertheless the defendant now sets up and relies upon "the terms and conditions of sale" appearing on the back of those dockets. If this is correct there is no doubt that they add to or vary the original contract in a number of significant ways. In my view they are not terms of the original contract and represent a rather crude attempt by the defendant at unilateral variation of the original contract. 35. As already mentioned the Statement of Claim sets out that by agreement made on or about 15 June 1988 the defendant agreed to supply and test concrete in connection with the construction by the plaintiff of Northern Territory House. It alleges that the agreement was in writing and constituted by (1) the plaintiff's purchase order No. 614584 and the special conditions attached thereto. (2) the specification prepared for the works by Messrs Woods Bagot architects. 36. Paragraph 3 of the Amended Defence admits that the defendant agreed to supply and test concrete in connection with the construction of the building and that it received from the plaintiff the purchase order, special conditions and specifications. It does not otherwise admit the agreement alleged. Paragraph 3A admits, "subject to the production of the purchase order, special conditions and specifications and to reference to their full terms and effect at the trial," that the terms appear in the said documents. It denies that the terms and effects of the agreement are as alleged. 37. Copies of the documents are exhibited to the affidavit of the solicitor for the plaintiff and it was not seriously argued before me that they were not true copies of the documents. It is enough to say that these documents appear clearly enough to comprise a contract between the parties complete in its terms. They do not incorporate the terms and conditions on the back of the sales dockets which accompanied deliveries of concrete by the defendant. If these terms are to be incorporated into the contract they must be by way of variation of the original contract or by rescission or novation of the original contract and the substitution of a fresh one. In either case the elementary requirement is the agreement of both parties. In Tallerman and Co Pty Ltd v Nathan's Merchandising Victoria Pty Ltd ; at 144 Taylor J., said:- " It is firmly established by a long line of cases ... that the parties to an agreement may vary

some of its terms by subsequent agreement. They may, of course, rescind the earlier agreement altogether, and this may be done either expressly or by implication, but the determining factor must always be the intention of the parties as disclosed by the later agreement." (Emphasis added). See also Anson - 25th Edn p 488. 38. There is really nothing here to show that the plaintiff agreed either to vary the original contract or to rescind it and accept a new one on new terms. It cannot be done unilaterally. Cowey v Liberian Operations Ltd (1966) 2 Lloyds Rep 45. It is quite obvious that delivery of the dockets to an employee of the company who had no power to bind the company could hardly constitute an acceptance of a series of different and significant variations of the contract. 39. In any event it seems to me beyond doubt that there was, from the outset of these events, an unqualified admission of liability under the original contract by persons representing the defendant who plainly had the authority to make those admissions on behalf of the defendant. I cannot accept Mr Nosworthy's submission that, while those persons had, as he puts it, "done the decent thing" they should not now be held to their plain admissions because there is now a dispute. I agree with him that these representatives have been perfectly frank, and it redounds to their credit. They did not jeopardise their company's position by admitting the obvious. In my view the dispute is and should always have been over quantum. The defendant's representatives are properly entitled to put the plaintiff to proof on that score. They are not entitled to resile from unambiguous admissions. 40. I do not need to cite many examples of these admissions. The early correspondence is studded with them. I have already set out the letter of 29 November 1988 which contains the sentence, "We accept responsibility for this concrete and all costs associated with its removal and replacement.". Then there is the letter of 19 December 1988 from the defendant's NT Divisional manager to the plaintiff. That contains this passage: "Pioneer concrete is one of Australia's largest companies and we have given your company our undertaking to correct this situation." A similar passage occurs in the letter of 27 January 1989. 41. There is the minute of the meeting of 1/12/88 to which I have also already referred

• "Pioneer reconfirmed their acceptance of responsibility ...". An earlier minute of a meeting between representatives of the plaintiff and the defendant records:- "P.S. (i.e. Peter Shattock the area manager of the defendant) advised that Pioneer accepted that it was their problem entirely and confirmed their request for Civil and Civic to proceed with removal of low strength concrete as quickly as possible".

42. It appears to me that these statements in letters or in the agreed minutes amount to an unqualified and unambiguous admission of liability under the contract between the parties, that contract being in the terms set out in the Statement of Claim. For reasons which I will later set out it is unnecessary to consider whether these also constitute admission of liability in tort.
43. Mr Nosworthy, however, argues that under the present rules a party cannot rely upon admissions not made "in a proceeding". He draws the distinction between the present rule and the earlier rule. The earlier rule in the Northern Territory was 0.35 r.6 which provided that:- "Any party may, at any stage of a cause or matter, where admissions have been made, either on the

pleadings or otherwise, apply to the Court or Judge for such judgment or order as upon such admissions he may be entitled to without waiting for the determination of any other questions between the parties ...". 44. That was in the same terms as the earlier English rule O.32 r.6 (now in different terms - O.27 r.3). Under the earlier rule it had been held that the words "or otherwise" were of general application and not confined to the pleadings. Thus in Ellis v Allen (1914) 1 Ch 904 Sargant J. held that the plaintiff was entitled to judgment because of an admission made by letter that there had been a subletting of property contrary to the covenants in a lease. At 909 his Honour said:- "I do not think r.6 should be confined as suggested. In my judgment it applies wherever there is a clear admission of facts in the face of which it is impossible for the party making it to succeed." 45. Mr Nosworthy, however, submits that the present rule precludes a court, in proceedings such as these, from acting on admissions other than admissions "in a proceeding". The terms of the present rule (35.04) are these:- (1)
Where a party makes admissions of fact in a proceeding, whether by his pleading or otherwise, the Court may, on the application of any other party, give the judgment or make the order to which the applicant is entitled on those admissions. (2)
The Court may exercise its powers under paragraph (1) without waiting for the determination of any other question in the proceeding. 46. I think Mr Nosworthy's submission is correct. The relevant words are "admissions of fact in a proceeding". The word "proceeding" is not defined in the Rules but it is defined in the Supreme Court Act (1979) NT as meaning "a proceeding in the Court" (s.9). The words "or otherwise" would then cover such matters as admissions made in answers to interrogatories or notice to admit, which, clearly enough, can be considered part of the proceeding. I doubt if they would cover discovery since a discovered document would only become part of the proceeding when tendered. I would leave for another day the question whether, once there had been discovery, discovered documents containing admissions could then be tendered by affidavit in an interlocutory proceeding and therefore become admissions "in the proceeding". Discovery has not yet taken place in this case, and I do not think the plaintiff can anticipate it by referring to documents which have not been formally discovered and cannot yet constitute admissions "in a proceeding". 47. I think there is a clear distinction between the present Northern Territory and Victorian rule 35.04 and the English rule even after its amendment from O.32 r.6 to the somewhat different terms of O.27 r.3. The English rule reads, as far as relevant:- "Where admissions of fact or part of a case are made by a party to a cause or matter either by his pleadings or otherwise ...". 48. That does not seen to me to limit the investigation to matters "in the proceeding". In Re Registered Trade Mark "Certina" (1970) 44 ALJR 191 Barwick C.J. applied the equivalent High Court Rule O.33 r.4 to accept admissions made in correspondence. At 192-193 his Honour said:- "The admissions on which a Justice may be asked to act under the rule are not limited to admissions formally made in the pleadings or in response to a notice given pursuant to O.33 r.3, see Ellis v Allen (1914) 1 Ch 904. The necessary admission may be found in a writing proved to be the defendant's or it may be proved to have been made by

the defendant orally." 49. However, for the reasons I have given I consider the present Northern Territory rule more restrictive than the rule with which his Honour was dealing. 50. Mr Riley QC, although he submits that I should apply the broader interpretation of the rule, has a ready answer if I am against him on that submission. He puts it that in fact the appropriate admissions have been clearly made in this proceeding. He points to paragraph 8 of the Defence which reads:- "In the event of it being held liable to the plaintiff the defendant claims to be entitled to an indemnity or to contribution from the said Avery Australia Limited." 51. This, says Mr Riley, leads clearly to the Third Party Notice filed by the defendant in this proceeding. Paragraph 3 of the notice commences with the words: "In the event of the defendant being held liable to the plaintiff the defendant claims that it is entitled to an indemnity from the third party or to contribution from the third party to the extent that may be found to be just and equitable on the following grounds." 52. Then follow a number of allegations, the most relevant being: (a) Subparagraph (7); which alleges that the servants or agents of Avery purported to test and adjust the scales. (b) Subparagraph (8); which alleges that Avery certified the scale was weighing correctly. (c) Subparagraph (9); which alleges that Avery did not perform the adjustment correctly and that the scales therefore gave a false reading.

(d) Subparagraph (12); which alleges that by reason of Avery's breach of contract and/or negligence the defendant supplied defective concrete to a number of the defendant's customers including the plaintiff. 53. Mr Riley submits that these parts of the Third Party Notice and certain others amount to a clear statement and admission by the defendant that the matters complained of by the plaintiff occurred. 54. Mr Nosworthy submits that these are not specific admissions since they are all governed by the opening phrase of paragraph 3 of the Notice, namely, "in the event of the defendant being held liable to the plaintiff". I am unable to accept this argument. The allegations are no less positive by reason of the claim against Avery being conditional upon the claim against the defendant being established. They remain positive allegations of fact even if the defendant is ultimately not found liable. They are equivalent to the defendant saying, "If a certain event happens (i.e. the defendant being found liable to the plaintiff), it will be because you, Avery, have done certain things to cause that event." The event may not happen. But the positive allegation remains. To put it another way, it can hardly be suggested that the defendant is raising a series of falsehoods. Rather it is saying to Avery, "This is the true position; but if we are not held liable we will not pursue it against you". 55. I take the view therefore that the defendant has made a number of allegations against Avery which, vis-a-vis the plaintiff, amount to an admission that the scales were not correctly tested and damage occurred to the plaintiff as a result. I take the view that the Third Party Notice is part of the proceeding in this case and constitutes clear admissions by the defendant of the plaintiff's case. Those admissions come within the scope of Rule 35.04. 56. In any event, R.35.04 is only one of the Rules which the plaintiff relies on in its application. Pursuant to R.46.04(2)(a) its application is endorsed as relying upon R.22.02 as well as R.35.04. R.22.02 applies to applications for summary judgment. The affidavit in support, namely the affidavit of Robert Francis Jones, complies with R.22.03 in stating the belief of the deponent that there is no defence to the plaintiff's claim. It exhibits the documents on which it relies, which include the passages to which I have already referred. The service of a Defence does not bar the plaintiff from applying for summary judgment. Griffith v Levy [1921] VicLawRp 5; (1921) VLR 29. That was a decision under the precursor of this rule namely O.XIV of the Victorian Rules. Mann J. said at 30:- "I think the duty of a Judge on an application under O.XIV is to be very careful that no defence which can give rise to any legitimate argument shall be taken away from a defendant, so that he will be shut out from raising it. I think also that O.XIV is not to be

reduced to a nullity, and it is my duty not to hesitate to use it if I think, as I do in this case, that there is no reasonable defence at all, no defence suggested that can form the subject of any legal argument." 57. Williams - Civil Procedure - Victoria at 1 35.04.40 appears to agree with the view I have expressed that R.35.04 has a narrower scope than its Victorian or Northern Territory predecessor. But he adds:- "Under the new Chapter 1 of the Rules the proper way to obtain judgment on a claim (or counterclaim) on the basis of admissions made otherwise than in the proceeding is by application for summary judgment under O.22." 58. I think the difference in principle between the two rules is plain. R.35.04 is a somewhat more summary procedure (if I can put it that way) than the summary procedure envisaged by R.22.02. The former is restricted to the case where the party seeking judgment can point to plain admissions in the relevant documents filed in the proceeding. He does not have to go further since success depends on the case being proved on those documents. In the latter procedure the party seeking judgment must prove his case as if it were before the court on trial; he may rely upon any evidence, (albeit on affidavit), which he could rely upon on trial; and he must go further and establish there is no defence available even in such material as has been put forward by his opponent in answering affidavits or pleadings. 59. It follows that in the present case, and properly pursuant to its application under R.22.02, the plaintiff is entitled to do what it has done and rely, inter alia, on the admissions in documents exhibited as part of its case; whether those be documents in the proceeding or otherwise. 60. I accept the submission of Mr Nosworthy that the court should be very circumspect before acting under R.22.02(1) and I bear in mind the observation of Barwick C.J. in "Certina" (supra) at 192 that "the power which the rule gives to a Justice in chambers must be exercised with great caution". I note also however that his Honour goes on to observe:- "But in a clear case a proper exercise of the power will obviate the delay involved in a hearing and will save unnecessary expense." I consider this just such a clear case. 61. Mr Nosworthy reminded the Court that the claim of the plaintiff was founded both in tort and contract, and that immediately caused two problems: (a) If judgment were entered against the defendant, on what basis would damages be assessed? (b) If (which Mr Nosworthy denies) the defendant had no defence to the action founded on contract it may well have a defence to the action founded on tort. Mr Nosworthy referred to ZS Projects Pty Ltd v G and R Investments Pty Ltd (1987) 9 NSWLR 686. 62. In that case Needham J. found that a defendant had no defence to an action for infringement of copyright but did have a defence to part of the relief claimed. The plaintiff had not elected as to which of the remedies it sought in the proceeding. His Honour said at 689-90:- "While I am not aware of any decision, and counsel has not referred me to any in which this problem has arisen, that is, whether the plaintiff is or is not entitled to summary judgment where there is no defence to the action, but there is defence to part of the relief claimed, it seems to me that the fact that there is a defence to the relief claimed indicates that this is not a proper subject for the granting of a summary judgment against the second defendant. For that reason I would dismiss the motion in so far as it applies to the second defendant." 63. It seems clear, however, that the basis of his Honour's reasoning in that case turned on the fact that the plaintiff had not elected which of several remedies it chose to rely upon in the proceeding. That, as his Honour pointed out, meant that, "the whole question of the circumstances ... would need to be investigated". In other words (and I hope I am not incorrectly interpreting his Honour's reasoning), the investigation into damages or, as was also sought, account of profits, would turn virtually into a full trial to determine under which head the relief lay. Under those circumstances the object of summary judgment in saving time and expense in a clear-cut case would be defeated. 64. This is not the case here, for Mr Riley, for the purposes of this proceeding, has clearly made his election. He says the plaintiff does not proceed here on the claim in tort. He seeks judgment in contract only. In this he follows an ancient tradition happily enshrined in a poem "The Circuiteers" by Adolphus (of Adolphus and Ellis fame). "Thoughts much too deep for tears subdue the Court When I assumpsit bring, and god-like waive a tort." (See 1 LQR 232 and Holdsworth HEL Vol III p 429). 65. It is not necessary for me to decide how far for any future purposes the tort has been waived, but I see no reason why the plaintiff cannot, in this proceeding, confine itself to the action on contract. That leaves no ambiguity about the relief sought which, if the application succeeds, must likewise be confined to the measure of damages appropriate to breach of contract. The plaintiff accepts this position. 66. Although, strictly, Mr Reeves, for Avery, may have no locus standi in this application, to which only the plaintiff and defendant are parties, I have allowed him to make submissions since he contends that the result might adversely affect his client. This may be the only occasion in which he and Mr Nosworthy will be in cordial agreement in these or related proceedings. Mr Reeves adopts generally the points made by Mr Nosworthy but he advances a further argument relative to Avery. He points out that in the separate proceedings between the defendant and Avery (the defendant there being the plaintiff and Avery the defendant), the defendant has pleaded both breach of contract and negligence against Avery. Avery has, in its defence, pleaded contributory negligence against the defendant. Some of those particulars suggest contributory negligence against the plaintiff as well, e.g., "Failure to observe reduced yield of concrete ...". 67. Mr Reeves concedes that the defendant has not yet raised contributory negligence in the pleadings between it and the plaintiff but he suggests it should do so. He concedes, also, that the authorities as to whether contributory negligence can be raised as a defence to a claim in contract do not all speak with one voice. Those authorities are succinctly set out by Bollen J. in Walker v Hungerfords (1987) 44 SASR 532 at 551. 68. Mr Reeves refers to Part V of the Law Reform (Miscellaneous Provisions) Act 1956-79 (NT) dealing with contributory negligence and particularly to s.16

• "Apportionment of Liability", - and submits that because of that section, if contributory negligence is raised against the plaintiff by the defendant and against the defendant by a third party there would ultimately be the sort of apportionment of liability contemplated by s.16 and s.18. If this does not occur the third party Avery may be placed at a disadvantage.

69. However, in my view, it is not necessary to consider these submissions at all for the following reasons:- (a) First and foremost, and despite Mr Reeves urging, and despite Mr Nosworthy suggesting that such a claim might be made, the defendant has not, even in its most recent Amended Defence delivered after the argument before me had concluded, alleged contributory negligence against the plaintiff. (b) At the most the defendant has alleged (paragraph 6(iii) of the Defence) that the plaintiff failed to mitigate any damage. That is an allegation sounding in damages and not liability. (c) No suggestion of

contributory negligence of the plaintiff is made in any of the defendant's affidavits filed in this proceeding. The issues raised relate to the question of what the contract was between the parties and what interpretation can be placed on its terms. (d) On the material before me there is no evidence on which I could find contributory negligence or even an arguable case of contributory negligence. On the contrary the correspondence contains unequivocal admissions of liability. (e) Avery may, if it wishes, raise the question in the separate proceedings between the defendant and itself by means of a Third Party Notice in those proceedings to the plaintiff. That has nothing to do with the present proceedings. Sufficient unto the day is the evil thereof. 70. Mr Nosworthy then submits that these are not proper proceedings in which to allow a summary judgment procedure. His reasons are twofold, and depend upon what he submits is the complexity of the issues before the court and the fact that there are also third party proceedings so that the matter cannot be completed. He draws attention to Rule 22.06(1)(b) which allows the court to give judgment for the claim or part thereof "unless the defendant satisfies the court that in respect of that claim or part a question ought to be tried or that there ought for some other reason be a trial of that claim or part." 71. Mr Nosworthy puts it that because of the complexity of the issues, that is "some other reason" why there is a question which "ought to be tried". However, despite Mr Nosworthy's ingenious and gallant attempts to suggest questions of great complexity in this case, I am quite satisfied that it is not complex. The material before me presents really quite a simple picture. The plaintiff and the defendant made a contract in the terms set out in the Statement of Claim. In essence the defendant agreed to supply concrete for a building the plaintiff was constructing. In one of the many transactions constituting that contract, the defendant supplied defective concrete. The plaintiff thereby suffered damage. 72. I do not take Mr Nosworthy at any stage as arguing that supply of defective concrete would not be a breach of the contract alleged by the plaintiff. His point is that that was not the contract. I reject that. In my view, liability is made out beyond question. But Mr Nosworthy refers me to cases where, nonetheless, judgment was not entered. It is not in doubt that the court has a discretion. That is why Rule 22.06(1)(b) speaks of "some other reason" for refusing the application. Mr Nosworthy refers me to Miles v Bull (1968) 3 All ER 632. Megarry J. considered that the defendant had no defence to the action, but he felt there were "circumstances that ought to be investigated" (p 637). A house and land in the ownership of two persons was sold to a buyer subject to the rights of occupation, if any, of the occupant, who was the wife of one of the vendors. The buyer then took steps to evict the wife. Megarry J. considered that the wife had no right of occupation as a deserted wife unless it could be shown that the transaction was a sham. He could not so find on the evidence but he felt the proceedings had "something of the appearance of a device to evict the defendant." He felt that evidence might emerge so that it might be "found on examination that it has travelled the road from artifice and artificiality to sham." The relevant facts were peculiarly within the knowledge of the husband and his Honour felt there was a strong prima facie case for interrogatories, discovery and cross-examination. His Honour considered that the words appearing in the RSC Ord 14 "There ought for some other reason to be a trial" were very wide and gave him the power to refuse the application even though there appeared to be no defence on the material before him. 73. The mere recital of the facts of that case and the reasons given by his Honour points up the substantial difference between it and the present case. 74. Here there can be no suggestion that the plaintiff is indulging in some underhand method of gaining the relief to which it is otherwise properly entitled to on the material before me. Obviously the case is authority for the breadth of the court's discretion to make or refuse orders in proceedings such as these. But that discretion must be exercised judicially. Once the right to relief is established there must be some good and sufficient reason why the relief should be refused. Megarry J. found such a reason in Miles v Bull (supra), and that reason was "justice" (p 638). As he put it, "RSC Ord 14 is for the plain and straightforward, not for the devious and crafty. There is here a case for investigation and so not for summary decision." 75. Millhouse J. found a reason in Toldale Pty Ltd v Sloper [1989] SASC 1792; (1989) 51 SASR 360. Fraud was alleged against the defendant. There was an issue of credibility. That could not be determined on affidavit evidence. Furthermore, judgment was sought for only a small part of a big claim. Little time would be saved. 76. It would be unwise to seek to limit the meaning of the phrase "some other reason". As I have already suggested, it underlines the breadth of a court's discretion. It reminds the Court that the remedy sought is a drastic one. It shuts out the defendant. So if the court has some rational suspicion that justice may not be done, that something unfair might be occurring, the court should not act. But there must be some rational basis for that view; as there was in Miles v Bull (supra) and Toldale v Sloper (supra). Equally, however, the court should not be diverted from granting relief when there plainly is no defence and no injustice or unfairness flowing from the order. While paying due tribute to the ingenuity of Mr Nosworthy, I do not consider that he has produced a shadow of a defence to these proceedings, or any circumstance in which it could be considered unjust or unfair to his client that judgment be entered against it. The real issue here is the quantum of damages and the defendant is fully protected in that respect, for the matter will be referred for assessment. It is not, to my mind, a good reason for refusing the order that the issue as to damages might be difficult and complicated, although I have some doubts as to whether it will be quite as convoluted an exercise as is suggested. It would be different if I considered the issue as to liability such; but I do not. 77. There remains the question of the third party proceedings and the submission that this in itself is a compelling reason why the matter should go to trial. I think Mr Nosworthy puts it on the basis that various disputes between the plaintiff and the defendant and the defendant and the third party are best dealt with in toto by the trial judge who can thereby gain a clear picture. There may well be cases where the practicalities of the proceeding are such that such a course should be followed. But I do not see that here. 78. True it is that a third party may contest the liability of the defendant to the plaintiff. See, In Re Salmon Priest v Uppleby (1889) 42 Ch D 351 at 362 per Cotton L.J. But it would be unusual if a third party could make out a better case for a defendant than a defendant itself could make out; and I would be insulting Mr Nosworthy's competence if I suggested that he had left any stones for Avery's counsel to turn up at some later time. Nor am I impressed by the suggestion that it would be more convenient and practicable for all issues to be tried together. On the question of liability of the defendant to the plaintiff, there are no issues of fact which could be further expounded. There are no questions of law which need to be reargued more extensively than they already have. It is true that one cannot in these proceedings deal with the more extensive field of quantum. But that would be so in any event. One can at least take the positive step of entering judgment for the plaintiff on the question of breach of contract and thereby at least confining the next round to its proper limits. 79. No injustice, in my view, enures to the third party. Whether the dispute between the defendant and Avery is continued in these proceedings or is removed to the other proceedings where the defendant is the plaintiff and Avery the defendant, is a matter which will have to be resolved by those parties, or the court if they wish it resolved by the court. In either case, that is a separate issue with which this application is not concerned. If, as Mr Reeves suggests, Avery wishes to embroil the plaintiff in those proceedings, albeit taking the usual risks as to costs, that does not make them any less separate from the present proceedings. The question being asked here is whether the defendant is liable to the plaintiff, and if so, to what amount. The question being asked as between the defendant and Avery is whether Avery is liable to the defendant for the damages the defendant must pay the plaintiff, and if so, to what amount. I see nothing in the Rules to suggest that the fact that a third party notice has been filed should prevent a court proceeding under Rule 22.02. I can certainly envisage cases where the court should properly refuse relief because the question depends on disputed and properly arguable facts as to the main issue and the third party's involvement therein; or the question of damage is inextricably intertwined as between the defendant the the third party. I fear I am merely repeating myself when I say that is not so here. 80. Furthermore, I cannot accept that the questions of law argued on this application are such that they cannot properly be dealt with in a summary manner. I note the case of Home and Overseas Insurance Co Ltd v Mentor Insurance Co (UK) Ltd (in liquidation) (1989) 3 All ER 74, where the Court of Appeal appears to put a gloss on earlier decisions to the effect that if the court is sufficiently satisfied that a point of law raised by the defendant is not sustainable, it should give judgment on summary procedure. See e.g. Nichimen Corp v Gatoil Overseas Inc (1987) 2 Lloyds Rep. 46 at 51-52 per Kerr L.J. In Home and Overseas Insurance (supra), the Court of Appeal seems to be putting some sort of time limitation on such legal arguments. Parker L.J. says at 77:- "The purpose of Ord. 14 is to enable a plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the defendant's only suggested defence is a point of law and the court can see at once that the point is misconceived, the plaintiff is entitled to judgment. If at first sight the point appears to be arguable but with a relatively short argument can be shown to be plainly unsustainable, the plaintiff is also entitled to judgment. But Ord. 14 proceedings should not in my view be allowed to become a means of obtaining, in effect, an immediate trial of an action, which will be the case if the court lends itself to determining on Ord. 14 applications points of law which may take hours or even days and the citation of many authorities before the court is in a position to arrive at a final

decision." 81. I would ask, with great respect, why not? Why should not the plaintiff be entitled to judgment as soon as possible if there really is no defence? Why should he not be entitled to save himself, and for that matter, the defence, further costs and delay when the issue can be decided, albeit after somewhat extensive argument? I do not think the mere complexity or apparent complexity of the argument should automatically shut out the plaintiff from immediate relief. He faces the sanction of costs if he is unsuccessful; but if, ultimately, he shows clearly that there is no defence there is every sensible commercial reason why the case should go no further. Again with great respect to Parker L.J., his remarks may well serve to encourage ingenious counsel to adopt what one would have to call a "cuttlefish" defence. That sagacious mollusk endeavours to confuse and defeat its enemies by pouring forth clouds of inky blackness when attacked. So, resort to a welter of authorities and referral to esoteric points of law might be employed to persuade an overworked judge that the answer is too hard to find on summary proceedings; and the defence thereby gain a much desired breathing space; at the expense of the plaintiff. 82. These observations should not, of course, override the basic principle that where there is "a real question to be tried" the defendant should be given leave to defend, Adatia Pty Ltd v Nazbit Pty Ltd (unrep. 30/6/89 - per Angel J.). 83. Other expressions have been used, e.g., if there is a "triable issue" - see Jacobs v Booth's Distillery (1901) 85 LT 262, or an "arguably good defence", Clarke v The Union Bank of Australia Ltd [1917] HCA 19; (1917) 23 CLR 5; or even that the defendant "may be able to establish a defence", Ray v Barker (1879) 4 Ex D 279 at 283. These and other authorities are collected in Australian Can Co Pty Ltd v Levin and Co Pty Ltd [1947] VicLawRp 47; (1947) VLR 332 at 334; but it is worthy of note that in that case their Honours Herring C.J. and Lowe J. say at 334-5:- "But in whatever language the discrimen is expressed to determine in what cases liberty to the plaintiff to sign judgment or liberty to the defendant to defend should be given, the length at which or the detail in which or the vigour with which counsel has argued the matter cannot be the determining factor. So to hold would be to allow the pertinacity or ingenuity of counsel or even the tolerance of the judge to obscure the real requirement of the rule." 84. No doubt it becomes a matter of degree and no doubt there are limits beyond which a judge should not go on summary proceedings if the arguments raised appear properly relevant but complex. In Theseus Exploration N.L. v Foyster [1972] HCA 41; (1972) 126 CLR 507 the High Court was not prepared to say that a judge had erred in refusing to enter judgment for the plaintiff on the basis that the extent and complexity of the matters of law and argument warranted a full hearing. Nevertheless, Barwick C.J. (at 514) was of the view that:- "Equally however I would not have thought him in error if he had granted the appellant's application for summary judgment. The case was one which, in my opinion, could have been disposed of in argument upon the application." In that case, however, it is noteworthy that the High Court itself, having heard full argument, decided that the defence raised must fail. Therefore it took the view that, if the action were sent for trial, the judge would be bound to apply the High Court's statement of the law, and therefore the appeal should be allowed. Logically, as Gibbs J. pointed out, the appeal should have been dismissed. But, as he remarked at 515 "Justice therefore requires us to take the anomalous course of allowing an appeal from a judgment which was correct." 85. While that case, therefore, illustrates the wide discretion allowed to judges in determining whether a case is so complex that it should not be determined summarily (which no doubt is another way of saying that the defendant "may be able to establish a defence"), I do not think that it suggests that a judge should take that course unless he first explores whether appearances are deceptive. 86. Mr Nosworthy has argued that even the very broad tests in favour of the defendant adopted in the Australian Can case (supra) are now even broader under the new rules. The original rule in the Northern Territory was Ord. 15 rule 1(2) ... "unless the defendant satisfied (the judge) that he has a good defence to the action on the merits, or discloses such facts as are deemed sufficient to entitle him to defend the action generally ..." 87. The present Rule 22.06 says - "... unless the defendant satisfies the court that in respect of that claim or part a question ought to be tried or that there ought for some other reason be a trial of that claim or part." 88. I would not agree with Mr Nosworthy on that submission and I am content to adopt what the learned editor of Williams Supreme Court Practice says at 3374:- "The words 'a question which ought to be tried' ... correspond to the words 'a good defence to the action on the merits' of the former rules. The change in language is not intended to establish a new and different test for leave to defend, but to express more accurately the test which had been developed from the original rule through court decision." He refers then to Chasfield Pty Ltd v Taranto (1988) reported in the Practice Decisions at p 30, 1113, where Murphy J., speaking of the rule says:- "It is, I think, reasonable to look to see how those new words in our Rules have been understood in England, for no argument has been addressed to me to suggest that the judges of this court, in adopting the words in the English rule, intended them to mean something different." 89. In any event I would think that the test put forward by the Privy Council in Jones v Stone (1874) AC 122 could hardly be more generous to the defendant than any of the other tests propounded. There Lord Halsbury says at 124:- "The proceeding established by that Order is a peculiar proceeding intended only to apply to cases where there can be no reasonable doubt that a plaintiff is entitled to judgment, and where, therefore, it is inexpedient to allow a defendant to defend for mere purposes of delay." This was the test adopted by the High Court in Clarke v The Union Bank of Australia Ltd [1917] HCA 19; (1917) 23 CLR 5. 90. In my view, applying that most generous of the formulations of the principle there is still, to my mind, no reasonable doubt that the plaintiff here is entitled to judgment. I think that achieves the object of the rule in this sense; that, while it is obvious that the question of quantum of damages will take considerably longer than the determination on liability, that would be the case in any event and the parties are at least spared the time and expense of arguing liability further. Furthermore, the plaintiff is clearly entitled to judgment and should not have to wait further proceedings and entail further costs on that issue. It is to my mind a plain advantage for all parties that they should concentrate on real issues; although, if the object of the defendant and Avery was delay, they may not see this advantage for the present. 91. I draw attention to two matters which I think in the heat of argument have not been addressed to completion. The first is the question of the plaintiff's claim against the defendant in tort. Mr Riley was clear enough that he was not in this application relying on that claim. I have however not been able to find anything in the transcript which could be construed as a complete abandonment for all purposes and it may be that Mr Riley did not propose to go so far. Mr Riley used words such as "We're not proceeding with that aspect of the matter: (i.e. duty of care), or, in relation to paragraph 7 of the Statement of Claim, "(That) is an allegation of negligence which is not being relied upon today ..." Mr Nosworthy does not appear to have pressed Mr Riley to anything more positive. I doubt if Mr Riley really proposes to come back to this claim in some other way in these proceedings and I doubt if Mr Nosworthy would seriously expect him to, but I may be wrong in that and I should not anticipate what was not argued. I think the question can best be dealt with by giving liberty to apply so that if Mr Nosworthy wishes to seek a more conclusive position for his client, or Mr Riley wishes to argue for some residual right to resort to this part of the claim, they may raise the question if either consider it remains as a live issue. 92. So far as Rule 22.02(1) is concerned, I have no difficulty in merely ruling that the defendant has no defence to that part of the claim which relates to breach of contract; so the argument on tort remains at least technically alive; although I would prefer to regard it as rather obviously in extremis and waiting for such obsequies as may be required for decent burial. 93. The other question relates to the Setoff and Counterclaim. On the view I have taken, the amount of the claim sufficiently exceeds that of the Counterclaim to justify judgment for the plaintiff. Indeed I think it fair to say that the present position seems to be that the defendant has already been given credit for the Counterclaim and cannot claim twice. However, I do not think the terms of Rule 22.02(1) permit me to dismiss the Counterclaim. Under the Rule the court can only act where the defendant has no defence to the whole or part of the claim. Insofar as it relies upon setoff as a defence I rule that it has no defence on that basis. 94. A setoff is a defence but a counterclaim is not. I think I am limited to entering judgment for the claim. I have not been asked to proceed under 22.06(1)(d) to dispose of the issue of counterclaim. I think I must leave the Counterclaim extant, although I am bound to say that it seems to me on the present material, somewhat illusory. However since the Counterclaim must go forward at this stage, I acknowledge that there can be no final decision on the issue and that if and when it falls to be determined the facts and circumstances may appear different or the arguments be seen in a different light to the present. 95. The third party proceedings remain on foot. But they are also the subject of a separate action between the defendant and the third party (No. 201 of 1989). I will give liberty to apply on the question whether, in view of the orders I make here, the third party proceedings be discontinued in these proceedings, or consolidated with the other proceedings. But if no application is made the third party proceedings should continue in these proceedings. 96. I make the following findings, declarations and orders: 1. Leave to the defendant to file and serve Amended Defence and Counterclaim. 2. Pursuant to R.22.10 find and declare that (a) the defendant is liable in damages to the plaintiff for breach of contract as alleged in paragraphs 3, 4 and 5 of the Statement of Claim. (b) the defendant has no defence to the action insofar as breach of contract is alleged. (c) the amount of damages for breach of contract is not established to the satisfaction of the Court. (d) if the amount of damages were established the Court would give judgment on the claim for breach of contract. 3. Direct that the question of the amount of damages for breach of contract be

referred to the Master for assessment. 4. Leave to enter judgment for the plaintiff once the amount of damages for breach of contract is ascertained. 5. The defendant have leave to continue the proceedings to the extent of its counterclaim in paragraph 10 of the Amended Defence and Counterclaim. 6. Liberty to both parties to apply on the question as to in what manner and to what extent the plaintiff has abandoned the claim in tort alleged in paragraphs 6, 7 and 8 of the Statement of Claim. 7. Direct that the proceedings constituted by the Third Party Notice of the defendant to Avery Australia Limited be continued in these proceedings unless otherwise discontinued or consolidated with proceedings No. 201 of 1989 wherein the defendant is plaintiff and the said Avery Australia Limited is defendant. Liberty to defendant and to Avery Australia Limited to Apply on these matters. 8. Liberty to both plaintiff and defendant to Apply generally. 9. Defendant to pay the plaintiff's costs of and incidental to these proceedings. 10. Certify for counsel including senior counsel.