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[2012] FCA 283
Federal Court of Australia
2012-03-23
French CJ, McKerracher J
Original judgment source is linked above.
INTRODUCTION 1 This is an application by the first respondent for trial dates of 5 June 2012 to 15 June 2012 to be vacated. The first respondent says that the application is made in the context of an unfinalised statement of claim, the late delivery of expert evidence by the applicants, and recent statements by the applicants as to what material they will, and will not, rely on at trial. 2 The relevant history of the matter is that: (a) On 18 October 2011, I listed this matter for trial on 5, 6, 7, 8 and 11 June 2012. (b) On 23 February 2012, at the request of the first respondent in light of matters discussed below, I extended the listing of this matter to 5, 6, 7, 8, 11, 12, 13, 14 and 15 June 2012 to accommodate the first respondent's concern about the potential length of the trial. That extension was subject to the availability of counsel in the second week. (c) On 28 February 2012, the first respondent informed the Court that its preferred counsel was unavailable in the week commencing 11 June 1012 due to other trial commitments. 3 The balance of these reasons should be considered in light of my reasons in Manday Investments Pty Ltd v Commonwealth Bank of Australia [2011] FCA 681 (Manday No 1). 4 Additionally, in determination of the application to vacate the trial dates the parties would bear in mind the observations of French CJ in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 where his Honour said (at [26]-[32]) (footnotes omitted): 26 Sali v SPC Ltd was concerned with a refusal by the Full Court of the Supreme Court of Victoria to grant an application for an adjournment of an appeal. By majority, this Court held that in the exercise of a discretion to refuse or grant an adjournment, the judge of a busy court was entitled to consider "the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties". Brennan, Deane and McHugh JJ went on to say: "What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources." Toohey and Gaudron JJ dissented in the result but acknowledged by reference to GSA Industries, that: "The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard." (footnote omitted) 27 The observations made in the two joint judgments in Sali were linked to the particular knowledge that a judge or court, called upon to exercise a discretion to adjourn, would have of the state of that court's lists. However, the mischief engendered by unwarranted adjournments and consequent delays in the resolution of civil proceedings goes beyond their particular effects on the court in which those delays occur. In that connection, there have been a number of cases after Sali in which it has been accepted, in the context of Judicature Act Rules, that the public interest in the efficient use of court resources is a relevant consideration in the exercise of discretions to amend or adjourn. 28 Both the primary judge and the Court of Appeal in the present case regarded the decision of this Court in J L Holdings as determinative of the approach they should take to the amendment application. But that case was factually very different. As counsel for Aon pointed out in written submissions: 1. The applicant had explained, and the Court had accepted, that the application was made late because a material fact had only recently been discovered. 2. The application was made before a hearing date was fixed and, once it had been fixed, the period of six months intervening between the application and the commencement of trial meant that the hearing dates would not be imperilled. 3. The point sought to be raised could not be avoided at trial, as it was apparent on the face of certain documents. In reversing the decision of the Full Federal Court, which upheld the primary judge's refusal to grant leave to amend the defence, this Court held case management principles to be relevant, but said that they could not be used to prevent a party from litigating a fairly arguable case. 29 In their joint judgment, Dawson, Gaudron and McHugh JJ reaffirmed the "principles established in Cropper v Smith and accepted in Clough and Rogers v Frog...". They held that nothing said in Sali suggested that proper principles of case management might be employed, except perhaps in extreme circumstances, to shut a party out from litigating a case which was fairly arguable. Their Honours said: "Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." And further: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties." Kirby J wrote a concurring judgment. 30 It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes. Application of the Rules to ANU amendment 31 The amendment allowed in the present case could only be supported as an exercise of the discretion under r 502. On no view was it required by r 501(a). The requirement to make amendments for the purpose of deciding "the real issues in the proceeding" does not impose some unqualified duty to permit the late addition of any new claim. The real issues in the proceeding were to be determined in this case by reference to the limited way in which ANU had deliberately chosen to frame its original claim against Aon, and its persistence in that limited approach up to the trial date itself. 32 The requirement under r 501(c) to avoid a multiplicity of proceedings is to be understood as operating within the framework of an ordered progression to a fixed trial date. It does not oblige the court to accept the addition of new claims at the last moment before trial, on the basis that if they are not allowed there might be subsequent proceedings in which those claims are raised. The steps which r 501(c) requires to be taken to avoid multiple proceedings are "all necessary amendments". The Court had no basis for inferring that, absent the amendments, there would be further proceedings.
RECENT DISPUTES 5 The applicants' statement of claim is still not finalised and recent substantial changes to it are still being debated. On 8 March 2012, the applicants provided the respondents with a minute of proposed re-amended statement of claim (the Minute) by email. 6 The applicants' case is that if certain valuations prepared by the second respondent in October 2002 were approximately $800,000 higher (that is, $1,900,000) then the '70% LVR' threshold discussed in Mandy No 1 would have been met, the customer account would not have been moved to the credit management unit, and the applicants would not have incurred loss by selling three other properties in 2003/2004. 7 On 9 March 2012, the first respondent set out queries regarding the Minute. The letter for the first respondent suggests that it appears that the valuation would need to be approximately $4,500,000 (not $1,900,000) for the '70% LVR' to be met. 8 On 19 March 2012, the applicants responded to the 9 March 2012 letter. The first respondent contends, not unreasonably in my view, that the explanation in the letter does not remedy this deficiency. 9 The respondents each foreshadow further applications in relation to the pleading or the proceeding generally. These arise substantially from the recent amendments. Those applications could be heard on 5 and 6 June 2012. 10 The question is whether it is in the interests of justice for the proposed (tentatively extended) trial dates to be maintained when there are real issues or disputes about a significant aspect of the pleading and senior counsel for the first respondent is not available for the extended portion of the trial dates. 11 This arises in a context where the events said to give rise to liability occurred in 2002 and the proceeding was not issued until 2008. Since that date the proceeding has not been advanced particularly swiftly or smoothly.
ADDITIONAL CONSIDERATIONS 12 The first respondent points to the fact that its senior counsel has been briefed since the proceeding was filed in late 2008. On 18 October 2011 the matter was listed for five days from 5 June 2012. Counsel was, and still is, available on these dates. 13 The first respondent says that the timeframe of five days was appropriate on the assumption that there was to be no expert evidence or that the expert evidence would be limited to the Burgess Rawson reports referred to in the statement of claim at that time being: (a) a report dated September 2004 valuing Hunt Street 'as at 1 October 2002' in the amount of $2,925,000; and (b) a report prepared by Mr Chris Loughnan and Mr Keith Collins dated January 2008 valuing the Hunt Street 'as at 1 August 2002' in the amount of $2,825,000. 14 At the directions hearing on 18 October 2011 when the trial dates were set, Ms McNally for the first respondent made it clear the first respondent was proceeding on the basis that there would not be any expert evidence. 15 In late January 2012, the applicants served their witness statements which included witness statements from Mr Loughnan and Mr Collins attaching reports and stating - without more - that the attached valuations are 'properly carried out and accurate assessments of the value of the subject properties' and a witness statement of Mr Collins comparing the valuation reports prepared by the second respondent and Burgess Rawson and providing an opinion that the value of Hunt Street for mortgage security was between $1,700,000-$1,900,000. 16 The first respondent points out that these statements clearly purport to be of an expert nature despite the basis on which the trial dates were set. This has now led to the need for the second respondent (at least) to obtain their own expert evidence. 17 The first respondent also observes that new particulars of the statement of claim refer to the sale of properties and that 'further particulars will be provided before trial'. There was no indication that expert evidence would be provided relating to these properties. What the particulars will be and when they will be provided is unclear. 18 There is a more substantive point which the respondents wish to agitate about the applicants' case which, in my view, should be resolved before trial. The first respondent argues that the general rule is that damages for breach of contract are assessed at the date of breach (see Johnson v Perez (1988) 166 CLR 351 per Mason CJ (at 355), per Wilson, Toohey and Gaudron JJ (at 367)). The applicants appear to seek damages for their loss assessed as the difference between the sale price for their units and their value in 2010 (not 2012). This is not a common measure of damage in claims under s 82 of the Trade Practices Act 1979 (Cth), now the Competition and Consumer Act 2010 (Cth): see HTW Valuers (Central Qld) Ply Ltd v Astonland Pty Ltd (2004) 217 CLR 640 (at [35]). 19 The first respondent has, in addition to foreshadowing that objection, pointed out that the valuations on which the applicants propose to rely are not capable of being expert evidence as they are not current and the valuers were not provided with a copy of the Federal Court Guidelines for Expert Witnesses. 20 In my view there may be force to a varying degree in several of these complaints. They strongly suggest that the applicants' case is not ready to be set down for trial. 21 The applicants argue that it is immaterial to the vacation of the trial dates that they are 'refining their pleadings' in preparation for trial. Of course, for minor amendments, especially deletions, this may be so. However the amendments the applicants are proposing to pursue (and which are clearly opposed) are not minor and raise significant issues of principle. Further they remain open ended as to their particularisation. Further still, they now apparently rely on expert evidence (although there is a further debate about this issue). The agreement as to five days for trial was expressly on the basis of there being no expert evidence.
CONCLUSION 22 The recent amendments mean that the matter is not ready for trial. I am not confident having regard to the history of the matter that it will be ready for trial by the allocated dates. There are several matters to resolve. The applicants, in contrast to the first respondent, point to no particular prejudice beyond the obvious prejudice of delay which would be occasioned. 23 Secondly, the extended trial dates provisionally allocated were provided subject to availability of senior counsel for the first respondent. He is not available. That is through no fault of the first respondent or of senior counsel. There is no doubt that this is a relevant consideration as he has advised and represented the first respondent since commencement of the proceeding. This is not a case (such as Australian Securities and Investments Commission v Infomercial Management Group Pty Ltd [2001] VSC 268) where the first respondent could have done more to avoid this position arising. It is quite the opposite. 24 Both the Court and the first respondent can accommodate trial dates within two or three months of the time originally fixed. Given that the events are already up to ten years old and the proceeding was not issued until 2008, the position cannot be described as urgent. The first respondent has not been at fault. For this reason the trial dates will be vacated. I will hear the parties on costs. The matter will be listed for directions and interlocutory hearings to resolve the various issues now arising. The orders will be: 1. The trial dates of 5, 6, 7, 8, 11, 12, 13, 14 and 15 June 2012 be vacated. 2. The matter be listed for directions and interlocutory hearings. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.
Manday Investments Pty Ltd
Commonwealth Bank of Australia