//
[2016] QSC 260
General information, not legal advice.
Supreme Court of Queensland
2016-11-15
Flanagan J
Original judgment source is linked above.
[1] On 4 May 2016 Mt Isa Mines Limited (MIM) filed an Amended Statement of Claim (ASOC) without first seeking leave to do so. The four named defendants in the ASOC applied to have paragraphs 26 to 29 of the ASOC struck out pursuant to r171 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) with no liberty to replead. Separate applications were filed by the first and second defendants and by the third and fourth defendants.
[2] The basis of the applications is that paragraphs 26 to 29 of the ASOC add new causes of action out of time for which leave has not been granted pursuant to UCPR r376(4). MIM opposes these applications, submitting that the amendments do not add new causes of action and therefore leave is not required. If the Court determines otherwise, MIM seeks leave pursuant to UCPR r376(4). The defendants oppose any such grant of leave pursuant to UCPR r376(4) on the basis that the new causes of action do not arise out of the same facts or substantially the same facts pleaded in the original Statement of Claim (SOC). Further, if the Court was to determine that the new causes of action do arise out of the same or substantially the same facts, the defendants submit it is otherwise inappropriate for the Court to grant leave.
[3] For reasons which follow, I am of the view that the amendments to paragraphs 26 to 29 of the ASOC do not add new causes of action and MIM does not require leave to file the ASOC. If I am wrong in this conclusion, I would otherwise grant leave to MIM to file the ASOC pursuant to UCPR r376(4).
Do paragraphs 26 to 29 of the ASOC add new causes of action?
[4] The answer to this question requires a detailed comparison of the original SOC with the ASOC. The underlying facts supporting the causes of action are broadly summarised in MIM's written submissions.[1] The first defendant (CMA) entered into a contract with MIM to undertake certain works at the Mt Isa Mines lead, zinc and silver processing plants. The third defendant (Mr McQueen) was performing oxyacetylene cutting as part of the contractual works being undertaken by CMA at the processing plants. The fourth defendant (IPA) had hired Mr McQueen to CMA for the purposes of CMA providing those contractual services to MIM. The second defendant (Mr Whale) who was an employee of CMA, had been nominated as a spotter whilst Mr McQueen was to carry out the oxyacetylene cutting in connection with the contractual works. On 28 September 2007 the oxyacetylene cutting carried out by Mr McQueen ignited a rubber lining in a feeder chute and hopper. Mr Whale was not present in the immediately vicinity of the area where Mr McQueen was carrying out this cutting. The fire spread to other parts of the surrounding infrastructure, including conveyors 12, 55, 60, 65 and 801 and their support structures.
[5] MIM filed and served a claim and SOC on 25 September 2013, two to three days prior to the expiration of the limitation period.[2] The SOC, in paragraphs 1 to 6, identified the relevant parties to the action. Paragraph 7 identified the business carried on by MIM, including the fact that it was in the process of undertaking a mine upgrade project known as the "Zinc Lead concentrator number 2 revamp project" referred to as "the Revamp Project" on the mining site.
[6] Paragraph 8 set out MIM's mining and production processes conducted on the site. Paragraph 9 set out the likely consequences of significant damage being caused to the mining infrastructure used in the transportation, processing and production of lead concentrate, silver concentrate, zinc concentrate, lead bullion and lead dross bi-product. This was pleaded to include:
- (a) The necessity to make good the damage caused;
- (b) Re-organisation of the mining transportation, processing and production systems whilst the damage was made good;
- (c) Disruption to the mining, transportation, processing and production systems;
The amount originally claimed by MIM in paragraph 29 was $61.25 million, essentially constituting a claim for loss of anticipated profits.
[10] It is necessary to set out in full paragraphs 26 to 29 of the original SOC.
"26 The damage to the mining infrastructure caused by the Fire Incident and the need to carry out the Reinstatement Works to make good the damage also had the result that:
(a) ore could not be fed via the conveyor transportation system incorporating conveyors 12, 55, 60, 65 and 801 to the HMP;
(b) ore feeding from the HMP to the grinding circuit (including rod mills) via the conveyor transportation system incorporating conveyors 12, 55, 60, 65 and 801 was prevented;
(c) ore feeding from the HMP and grinding mills to the concentrator via the conveyor transportation system incorporating conveyors 12, 55, 60, 65 and 801 was prevented;
(d) ore throughput rates and metal production were adversely affected due to:
(ii) prevention and delay of normal maintenance programmes and optimization projects.
(a) installed and operated temporary conveyors in order to permit beneficiated ore to be fed to the rod mills;
(b) installed and operated a temporary conveyor in the HMP in order to permit beneficiation to resume.
(b) the quantity of contained (and recovered) zinc was reduced;
(c) feeding ore from the temporary conveyor installed in the HMP to the grinding mills required rehandling;
(d) throughput in the grinding section was reduced;
(e) HMP feed and rod mill feed rates were reduced until completion of the Reinstatement Works;
(i) The installation, operation and disassembly of the temporary conveyors pleaded in the previous paragraph;
(ii) rehandling of ore fed through the HMP which then had to be stockpiled on the ground as it could not be fed directly to the grinding circuit via the conveyor transport system;
(iii) hauling of ore normally fed to the HMP to the semi-autogenous grinding mill (also known as the "SAG Mill");
(iv) the necessity to stockpile ore mined but not fed at the usual run of mine rate to the mills;
(g) loss of lead concentrate resulted in loss of feed to the lead smelter and, as a consequence, to loss of lead bullion (and dross) production and sales.
(h) MIM incurred additional costs as a result of the necessity to purchase and smelt lead concentrate from third parties to enable lead smelting to continue (at a reduced rate) whilst the Reinstatement Works were being undertaken.
(a) The methodology by which MIM has estimated its loss has been to calculate the net present value of the net revenue of the mine over the life of production (i.e. to 2026) had no Fire Incident occurred and to deduct a calculation of the net present value of the net revenue of the mine over the life of production having regard to the disruption to production caused by the Fire Incident.
(b) The proper valuation of the amount of loss and damage suffered by MIM is a matter for expert opinion evidence. MIM will provide further particulars of the manner of calculation of its loss when its expert opinion evidence is finalised."
[11] The effect of the allegations made in paragraphs 26 to 29 of the SOC are accurately summarised in paragraph 30 of the third and fourth defendants' written submissions as follows:
"In summary, the SoC alleged that the damage to mining infrastructure caused by the fire, and the need to carry out Reinstatement Works, had the result that:
[12] Paragraphs 30 to 33 of the SOC pleaded the breach of the first defendant's implied terms and claimed the pleaded loss and damage. Paragraphs 34 to 37 pleaded the breach of the first defendant's express terms and claimed the pleaded loss and damage. Paragraphs 38 to 42 pleaded the tortious duty and breach of duty of the first defendant and claimed the pleaded loss and damage. Paragraphs 43 to 45 pleaded a contractual indemnity. Paragraphs 46 to 47 pleaded that the first defendant was vicariously liable for the conduct of the second and third defendants. Paragraphs 48 to 52 plead the tortious duty and breach of tortious duty by the second defendant and claimed the pleaded loss and damage. Paragraphs 53 to 57 pleaded the tortious duty and breach of tortious duty by the third defendant and claimed the pleaded loss and damage. Paragraphs 58 to 59 pleaded that the fourth defendant is vicariously liable for the third defendant's conduct and claimed the pleaded loss and damage.
[13] The ASOC amends a number of paragraphs. As to paragraph 7(d) further particulars are provided in relation to the Revamp Project. Paragraph 8 is amended to refine MIM's zinc/lead mining and production processes conducted on the site. Paragraph 9, which deals with the likely consequences of significant damage being caused to the mining infrastructure, is amended only in respect of paragraph 9(d), which now reads:
"(d) prevention, disruption or delay of normal maintenance programmes, repairs, improvements and planned optimisation projects including the Revamp Project;"
[14] Paragraphs 30 to 59 with plead the relevant contractual obligations, tortious duties and their breach and the Prayer for Relief remain basically unchanged except for the increase in the total amount claimed for loss and damage from $67,376,472 to $75,002,435, which amounts include $6,126,472 for the reinstatement works.
[15] The major amendments are to paragraphs 26 to 29. These amended paragraphs now run to over 12 pages.
[16] The introductory words to paragraph 26 in the ASOC remain unchanged. Paragraph 26 continues to deal with the results flowing from the damage to the mining infrastructure caused by the fire and the need to carry out the reinstatement work to make good the damage. Paragraphs 26(a) to 26(c) have been replaced by paragraphs 26(ca) to 26(ce). Both the original paragraphs and the replacement paragraphs, as submitted by MIM, plead the "self-evident proposition" that by damaging the transportation infrastructure for materials within the processing system, there was a reduction in the production of product for a period.[16] The defendants however identify the following new results pleaded in paragraphs 26(ca) to 26(ce):[17]
- (a) an inability to operate the SAG Mill circuit, being a separate circuit and which is alleged for the first time to be a separate part of the mine's operations;[18]
- (b) the prevention of feeding Black Star and excess George Fisher ore to the Heavy Medium Plant;[19]
- (c) a reduction in feed capacity of the zinc/lead concentrator, which was reduced to the throughput which could be fed through the SAG Mill circuit, and alleged limited quantities beneficiated through the Heavy Medium Plant;[20]
- (d) that it was necessary to process solely George Fisher ore to maximise production opportunities, which were limited, and that this was done by the SAG Mill;[21]
- (e) that normal production of the zinc/lead concentrator was not restored until after 12 November 2007.[22]
[17] Paragraph 26(d) is amended in the following terms:
"(d) ore throughput rates and metal production were adversely affected due to:
(i) disruption to the Site, limited availability of the production/processing plant and mining operations between 28 September 2007 and 12 November 2007 (being from the occurrence of the Fire Incident until the restoration of normal production capability);
(ii) Further, and in addition to the adverse effect pleaded in subparagraph (d)(i) above, prevention, disruption and, or alternatively, and delay of normal maintenance programmes, repairs and improvement optimization projects (including those works necessary to achieve the commercial aim of increasing the zinc/lead ore throughput of the zinc/lead concentrator to 8 million tonnes per annum by the second half of 2008) for a period of at least 35 days."
[18] MIM submits that paragraph 26(d)(ii), in both the original and amended pleading, together with the new paragraphs 26A to 26C in the ASOC, deal with the effect the fire had on activities which would have improved the output of the processing operations, such as normal maintenance programs and optimization projects. The allegation is that "not only did the fire have the immediate reduction in processing materials producing metal between 28 September 2007 and 2 November 2007, but it also delayed the improvement to the processing plant."[23] At the hearing of the application MIM agreed to a further amendment to paragraph 26B of the ASOC so that the paragraph now reads:
"26B Between December 2007 and February 2009, the overall performance of zinc/lead concentrator throughput and metal production improved..."
[19] The remaining allegations in paragraph 26B are now omitted. Paragraph 27, both in its original and amended form, pleads loss in the form of mitigation costs associated with putting in place temporary conveyors in different parts of the processing system in order to permit some production to take place. Paragraph 27A in the ASOC pleads further mitigation costs by MIM purchasing lead concentrate from third parties in order to seek to maximise lead smelting operations whilst the reinstatement works were being undertaken. The plea in paragraph 27A of the ASOC reflects the plea in paragraph 28(h) of the original pleading.[24]
[20] Whilst there have been some amendments to paragraph 28, it continues to deal with the overall result. Similarly paragraph 29, whilst extensively amended, continues to deal with the loss and damage suffered by MIM as a consequence of matters pleaded in paragraphs 26 to 28. The amount claimed has been amended from $61.25 million to $68,875,963. The basic methodology however, for the calculation of this loss remains the same, being the net present value of the net revenue of the mine over the life of production (that is to 2027) had no fire incident occurred, and to deduct a calculation of the net present value of the net revenue of the mine over the life of production, having regard to the disruption to production caused by the fire.[25] The defendants however submit that the alleged loss in paragraph 29 as amended is calculated by a new methodology to take account of, among other things, an alleged delay in increasing the ore throughput to the zinc/lead concentrator.[26]
[21] In Borsato v Campbell[27] Philip McMurdo J (as his Honour then was) discussed the nature of a cause of action:
"[8] The term "cause of action" was defined in Cooke v Gill as being "every fact which is material to be proved to entitle the plaintiff to succeed", a definition which many judgments have employed in the context of this rule or its equivalent: see e.g. Allonnor Pty Ltd v Doran per McPherson JA. But it has not been applied literally, for otherwise any new fact to be added to a plaintiff's case would be treated as raising a new cause of action which required leave in the context of a rule such as r 376(4). So in Allonnor Pty Ltd v Doran for example, there is an indication of what the Court of Appeal in Thomas v State of Queensland subsequently endorsed as a "fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended". The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which a plaintiff's case is described. Some illustrative guidance is provided by Allonnor Pty Ltd v Doran, Thomas v State of Queensland and another judgment of the Court of Appeal, Central Sawmilling No. 1 Pty Ltd & Ors v State of Queensland." (Citations omitted)
[22] By reference to the above passage the defendants submit that an amended pleading which requires the assessment of damages in a different way can amount to a new cause of action. If an amended pleading alleges a different assessment of damages, or alleges a different or new consequence flowing from a breach, it may give rise, according to the defendants, to a new cause of action, rather than a mere particularisation of the cause of action previously pleaded.[28] MIM submits however, that when the "fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended" is made here, the amendments do not constitute the pleading of new causes of action. According to MIM, what is plain is that the existence of new facts themselves do not simply equate to a new cause of action. As observed by Applegarth J in Menegazzo v Price Waterhouse Coopers[29] not every newly-pleaded fact raises a new cause of action. [30] Rather, it is a question of degree.[31]
[23] MIM further submits that upon proper analysis Borsato does not support the defendants' submission that if an amended pleading alleges a different assessment of damages or alleges a different or new consequence flowing from a breach, it may give rise to a new cause of action. In Borsato, as is evident from paragraphs [5], [14] and [15], what had originally been pleaded was a breach of a tortious duty of care constituted by negligently performed surgery resulting in a severed nerve. The amendments alleged a breach of a tortious duty of care by failing to warn of a material risk inherent in the proposed treatment. This was identified by Philip McMurdo J:[32]
"Indisputably, the breach of duty now alleged is quite distinct from that already alleged. In substance it is such a different case from an allegation of negligent performance of the surgery that it cannot be described as some further particularisation of the original claim of breach of duty. It requires the plaintiff to prove a distinct fault, necessarily prior in time to the alleged breach in the course of the surgery, and then to prove the likelihood of some sequence of events in response to a proper warning. I do not accept that it is appropriate for present purposes to characterise the duty in this new case as the same as in the existing case, but on any view the new case involves quite a different breach." (Citations omitted).
[24] I accept MIM's submission that Borsato is not authority for the proposition that amendments relevant to a different assessment of damages or new consequences flowing from a breach necessarily constitute the addition of a new cause of action. His Honour's reference in [15] to a different assessment of damages was for the purpose of demonstrating that the new duty of care pleaded and the breach of that duty constituted an additional cause of action:[33]
"Then there is a difference in the new case which is relevant for the assessment of damages. The existing case, that of negligent surgery, involves a loss measured by the difference between the plaintiff's actual position and that which he would enjoy, had he had the benefit of the surgery but not the detriment from the severance of the nerve. Under the failure to warn case, his loss would be the difference (if any) between his actual position and the position in which he would be, had he been warned. His pleading does not seem to identify a difference. But assuming that his case, notwithstanding the terms of his pleading, is that he would not have gone ahead with the surgery, then his position (with a proper warning) would be that he would have avoided the complication but he would not have had the benefit of the surgery. The new case then is likely to involve a different assessment of damages, because the damage was different." (Citations omitted).
"A cause of action is the combination of facts which gives rise to a right to sue. In Bruce v Odhams Press Ltd Scott LJ identified material facts as those necessary for the purpose of formulating a complete cause of action, the omission of one having the consequence that a statement of claim is bad. However, his Lordship also noted that it is often difficult to distinguish between a material fact, and a particular piece of information which it is reasonable to give to the defendant, in order for the defendant to know the case to be met. His Lordship also noted the common practice of including in a pleading, facts which are not material facts. It follows from these observations that, if an amendment introduces a new material fact, then a new cause of action is introduced, even if the cause of action is of the same type or category as one pleaded before the amendment. However, if the material facts remain the same, then no new cause of action is introduced. That is consistent with the general approach taken by courts to the application of limitations statutes. A new cause of action does not arise simply because some relevant fact occurred after the cause of action accrued. A common example, in a case of negligence, is further loss occurring after some loss was first suffered." (Citations omitted)
"It might be observed that damage for a cause of action under s 87 of the TPA may be constituted by the detriment suffered by being bound to a contract unconscionably induced; or the entry into legal relations from which a party would otherwise have abstained. In some actions for damages where the suffering of damage is an element of the cause of action, it is possible that there will be separate incidents of damage, giving rise to separate causes of action. This, however, is generally limited to actions in nuisance. On the other hand, while substantial economic loss may be suffered at a later point in time than the initial damage, that is usually not decisive. What is critical is when measurable damage first occurs. Thus, in Wardley Australia Ltd v Western Australia, Brennan J said that where a misrepresentation induces a plaintiff to enter into a contract in which it suffers loss, the loss is suffered once the plaintiff becomes bound by the transaction; and what follows can be viewed as evidence proving the extent of the loss suffered. This view was adopted by Handley JA in Scarcella v Lettice. In determining whether a cause of action has accrued prior to the expiry of a period of limitation, the question is determined by reference to the substance of the matter, and not simply on the basis of allegations in a pleading. Given that r 376 deals with the inclusion of a cause of action after the expiry of a period of limitation, it seems to me that the same approach is to be taken when determining whether an amendment includes a new cause of action." (Citations omitted)
[27] P Lyons J was considering this issue in the context of a cause of action based on deceptive and misleading conduct under s 52 of the Trade Practices Act 1974 (Cth) where relief was sought under s 87. The defendants submit that in the context of a negligence action the facts establishing the damages caused by the alleged breach are an essential element of a cause of action for negligence and on that basis must be considered a material fact essential to the cause of action. Thus according to the defendants although an amended pleading for damages for negligence may plead only one injury and one incident, if the amended pleading alleges different causes of injury, leading to different damage, it may give rise to a new cause of action.[37] The defendants accepted that there is no direct authority for that proposition.[38]
[28] Whilst the pleaded causes of action against the third and fourth defendants are in negligence only, contractual breaches are alleged in relation to the first and second defendants. In the Commonwealth of Australia v Cornwell[39] the High Court emphasised the difference between causes of action in contract and tort:[40]
"In HTW Valuers (Central Queensland) Pty Ltd v Astonland Pty Ltd, this Court warned that assumptions which are simulated various causes of action (including those in contract and tort) may not always be sound. In that vein, Lord Vance recently emphasised: "no issue regarding relevant and measurable damage can arise in contract, since nominal damages can be awarded for any breach". Hence, in the present case, Higgins CJ held that any cause of action in contract had first accrued many years ago, upon breach in 1965.
However, to show the existence of a completely constituted cause of action in negligence, a plaintiff must be able to show duty, breach, and damage caused by the breach; accordingly, in the ordinary case, it is at the time when that damage is sustained that the cause of action "first accrues" for the purposes of a provision such as s 11 of the Limitation Act." (Citations omitted).
[29] As the essential elements in a claim for damages for negligence are the duty of care, breach of that duty and injury caused by that breach it is unsurprising that amendments alleging different duties and different breaches and different causes of injury would constitute new causes of action.[41] As observed by Thomas JA in Thomas v State of Queensland,[42] where different duties, different breaches and different causes of injury are alleged then new causes of action are added although only the one injury and incident may be alleged. In the present case, whilst at a very general level the relevant incident is the fire, if the amendments were to allege a breach of different contractual obligations whether express or implied or different tortious duties or breaches of those duties, then a new cause of action would be added, even though the general incident, namely the fire, remained the same. The defendants do not suggest that MIM has sought to amend its pleading to allege any different contractual obligations, tortious duties or breaches.
[30] A cause of action in respect of which causation is an essential element makes it necessary to plead the material facts which are said to give rise to the causal connection.[43] This does not mean however, that a mere increase in damages or the pleading of additional damages would constitute a new cause of action. Nor do the cases referred to by the defendants stand as authority for the proposition that if an amended pleading alleges different causes of injury leading to different damage it may give rise to a new cause of action in circumstances where there is no amendment to the alleged contractual obligation, duty or breach. MIM submits that where the terms of the contract are pleaded, the tortious duties are pleaded, the breaches of each of the terms and duties are pleaded, and some damage has been pleaded, there is no inclusion of a new cause of action where the amendments sought are only a part of the damages plea.[44] MIM refers to Sands v South Australia[45] for the proposition that subject to an exception which exists for personal injuries claims, there is one single indivisible cause of action for each duty and breach of duty pleaded. Therefore as further damage is suffered of different types and at different times there is no "new" cause of action. It is the same cause of action and the time limit runs from when the damage is first suffered. Ultimately, for reasons given below, it is unnecessary for me to determine whether amendments to a pleading alleging different causes of injury leading to different damage may give rise to a new cause of action for the purposes of UCPR r376(4). This is because I am of the view that on proper analysis the amendments do not alter the alleged causal connection between the breach of contractual and tortious duties and the damages sought. I view the amendments as a particularisation of causes of action already pleaded.
"But the fact that paragraph 12(j) was not struck out does not oblige the Court to ignore its vacuous character, when considering whether an amendment will if allowed add or substitute a "new cause of action"'. That view appears, in my opinion, the proper one to take under both the new and the old Rules, but especially under the former, which require that the rules be applied so as to avoid undue technicality and to facilitate their purpose: r 5(2). The spirit of the UCP Rules would not be respected if the question whether what are in substance new causes of action should be allowed to be added out of time is made to depend upon the presence or absence in the existing pleading of an allegation of misconduct which is so vague as to be devoid of any ascertainable meaning."
[40] In Draney the allegations against solicitors in the original pleading suggested that the solicitors had failed to register a security in the way they should have done and that this caused loss of the money secured and loss consequent upon an inability to exercise an option. The amendments however went much further to allege negligent advice. As observed by his Honour, this was an issue upon which the solicitors would have no occasion to reflect until notified of the proposed amendments.[57] Draney is easily distinguishable from the present case. The amendment sought in Draney constituted a new allegation of a different duty of care, namely a failure to properly advise, as opposed to the original allegation of a failure to register a security.
[41] I conclude therefore, that the amendments and new facts pleaded in paragraphs 26 to 29 of the ASOC do not constitute the addition of new causes of action.
Rule 376(4)(b): The new cause of action arises out of the same facts or substantially the same facts
[42] If I am wrong in this conclusion I would otherwise find that any new causes of action arise out of the same facts or substantially the same facts as the causes of action pleaded in the original SOC.
[43] Thomas JA in Draney v Barry[58] held that a resolution of this issue may involve a consideration of whether the "necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action". Thomas JA's reference to the "story to be told" has been referred to as "a short-hand reference to the matters that the plaintiff has to prove".[59] The Court of Appeal in Thomas v State of Queensland construed the test suggested by Thomas JA as encouraging "a fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended".[60]
[44] The most recent consideration by the Court of Appeal of rule 376(4) is the case of Paul v Westpac Banking Corporation.[61] Fraser JA (with whom Gotterson JA and Douglas J agreed) stated:
"The question in each case is whether the facts out of which a new cause of action arises are substantially the same as facts relied upon in a cause of action for which relief has already been claimed in the proceeding. As has been mentioned in other cases, this may involve questions of degree and fine judgment, but the answer to that question should be informed by an appreciation that the policies underlying the applicable statute of limitation may be inappropriately undermined if the required analysis is conducted at too high a level of generality. If those underlying policies are not threatened by a proposed amendment, the test in UCPR r 376(4)(b) may be found to be satisfied even though the new claim involves some variation in the facts. This approach is consistent with the careful way in which the rule has generally been applied since it was enacted." (citations omitted)
[45] I have already carried out the comparison of the original SOC with the ASOC for the purposes of determining whether any new causes of action were added. Based upon that analysis and applying the broad brush comparison suggested in Thomas v State of Queensland, I am satisfied that if new causes of action had in fact been added, they arise out of the same or substantially the same facts.
Rule 376(4)(a) - Does the Court consider it appropriate to grant leave?
[46] The Court has a broad discretion in determining whether an amendment is "appropriate". The exercise of this discretion brings into account considerations of fairness and any prejudice caused to the defendants. The Court should also have regard to the principles discussed in Aon Risk Services Australia Limited v Australian National University[62] and rule 5 of the UCPR. I have previously considered these principles in Monto Coal 2 Pty Ltd v Sanrus Pty Ltd.[63]
[47] The defendants submit that the extent of the amendments in the ASOC must be viewed against the background of MIM's delay and the prejudice it has caused the third and fourth defendants and the unsatisfactory explanation for the progression of the proceeding.[64] This submission requires a consideration of some of the chronology of the present proceedings.
[48] The proceedings commenced on 25 September 2013, which as I have already observed, was two to three days from the expiration of the limitation period. The fire occurred on 28 September 2007. The events since the fire are set out in the submissions for the third and fourth defendants.[65]
[49] MIM's current solicitors were engaged on behalf of its insurers on 18 October 2007.[66] Reports were obtained from loss adjustors in 2007 and 2008.[67]
[50] In February 2010, some two and a half years after the fire, MIM's solicitors first wrote to the third and fourth defendants' then solicitors, alleging that the third and fourth defendants were responsible for the alleged loss said to have been caused by the fire.[68]
[51] In March 2010, the third and fourth defendants' solicitors wrote to MIM's solicitors, denying liability.[69] MIM's solicitors engaged junior counsel to draft the pleading in March 2010 and senior counsel in August 2011.[70] They did not engage any experts until April 2013,[71] approximately six months short of the expiry of the limitation period.
[52] On 25 September 2013, two to three days short of the limitation period, MIM filed the SOC. It served the SOC on the third defendant on 26 September 2016, and on the fourth defendant on 27 September 2013.
[1] Submissions on Behalf of the Plaintiff, [11]-[16].
[2] Outline of Submissions on Behalf of the First and Second Defendants, [2(b)]; Third and Fourth Defendants' Written Submissions, [2], which suggest the claim and SOC was filed and served only two days short of the end of the limitation period.
[3] Submissions on Behalf of the Plaintiff, [21(k)]; Outline of Submissions on Behalf of the First and Second Defendants, [7]; Third and Fourth Defendants' Written Submissions, [1].
[4] Submissions on Behalf of the Plaintiff, [17(b)]-[17(d)].
[16] Submissions on Behalf of the Plaintiff, [21(l)].
[17] Third and Fourth Defendants' Written Submissions, [31].
[18] ASOC, [26(ca)]; ASOC, [8(aa)].
[23] Submissions on Behalf of the Plaintiff, [21(m)].
[24] Submissions on Behalf of the Plaintiff, [21(o)].
[25] SOC, [29] Particulars (a); ASOC, [29(d)(i)].
[26] Third and Fourth Defendants' Written Submissions, [31(l)].
[27] [2006] QSC 191 at [8].
[28] Third and Fourth Defendants' Written Submissions, [39].
[30] [2016] QSC 94 at [42].
[31] Submissions on Behalf of the Plaintiff, [50].
[32] [2006] QSC 191 at [14].
[33] [2006] QSC 191 at [15].
[35] [2014] QCA 216 at [17].
[36] [2014] QCA 216 at [46].
[37] Third and Fourth Defendants' Written Submissions, [40].
[40] [2007] HCA 16; (2007) 229 CLR 519, 522-523 at [4]-[5].
[41] See for example, Woolfe v State of Queensland [2008] QCA 113 at [15]- [17] per Keane JA where his Honour found that an amendment which sets up a different breach of duty is not within the scope of UCPR r376(4)(b); Zonebar Pty Ltd v Global Management Corporation Pty Ltd & Anor [2009] QCA 121 at [23] per Keane JA; T1-10, lines 20-45.
[42] [2001] QCA 336 at [16].
[43] Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd & Ors [2004] QSC 457 at [15] per Chesterman J.
[44] Submissions on Behalf of the Plaintiff, [26].
[46] Submissions on Behalf of the Plaintiff, [31]-[32].
[47] Third and Fourth Defendants' Written Submissions, [56].
[48] Submissions on Behalf of the Plaintiff, [52].
[49] Submissions on Behalf of the Plaintiff, [53].
[50] Third and Fourth Defendants' Written Submissions, [59]-[60].
[51] Third and Fourth Defendants' Written Submissions, [63]-[69].
[52] T1-31, lines 11-46; ASOC, [26A(h)] and [26A(j)].
[53] Submissions on Behalf of the Plaintiff, [86].
[54] Submissions on Behalf of the Plaintiff, [17]; Paragraphs [8] and [9] above.
[56] (2002) 1 Qd R 145, 158 at [32].
[57] (2002) 1 Qd R 145, 161 at [49].
[58] (2002) 1 Qd R 145, at [57].
[59] [2001] QCA 336 at [19].
[60] [2001] QCA 336 at [19].
[63] [2014] QCA 267 at [73]- [74].
[64] Third and Fourth Defendants' Written Submissions, [88].
[65] Third and Fourth Defendants' Written Submissions, [11]-[28].
[66] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [23].
[67] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [3].
[68] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [4], JLP-1.
[69] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [5], JLP-2.
[70] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [27] and [28].
[71] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [33] and [73(a)].
[72] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [6], JLP-3.
[73] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [7], JLP-4.
[74] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [73].
[75] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [8]-[10], JLP-5.
[76] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [11], JLP-6.
[77] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [12] and 13, JLP-7, JLP-8.
[78] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [14], JLP-9.
[79] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [15], JLP-10.
[80] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [16], JLP-11.
[81] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [17] and [18], JLP-12.
[82] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [19], JLP-12.
[83] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [20], JLP-13.
[84] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [21], JLP-14.
[85] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [22], JLP-15.
[86] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [23]-[31], JLP-16 to JLP-24.
[87] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [33], JLP-25.
[88] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [34], JLP-26.
[89] Submissions on Behalf of the Plaintiff, [95].
[90] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [32]-[33].
[91] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [37].
[92] CD 9, Affidavit of Mr O'Halloran filed 4 October 2016, [77]-[83].
[93] CD 7, Affidavit of Ms Priestley filed 9 September 2016, [12], [21], JLP-10, JLP-14.
[94] Submissions on Behalf of the Plaintiff, [101].
Mt Isa Mines Limited
CMA Assets Pty Ltd & Ors [2016] QSC 260
(2009) 239 CLR 175
(2007) 229 CLR 519
(2002) 1 Qd R 145
(2015) 122 SASR 195
[7] Paragraph 11 pleaded that all of the parties to the proceeding had knowledge of the matters in paragraphs 7 through to 9 and particulars were given from which that state of knowledge was to be inferred. Paragraph 12 pleaded the existence of an agreement with the first defendant. Paragraphs 13 to 14 pleaded express terms of the agreement with the first defendant. Paragraphs 15 through to 18 pleaded implied terms of the contractual retainer with the first defendant by reason of s 74(1) and s74(2) of the Trade Practices Act 1974 (Cth). Paragraphs 19 through to 22 pleaded the factual circumstances leading up to and the causation of the fire, including the roles of Mr McQueen as the oxyacetylene cutter and the role of Mr Whale as the person who should have been spotting for Mr McQueen but was not. These facts were then relied upon to constitute the breaches of contractual terms and the tortious duties of care.
[8] Paragraphs 23 to 29 pleaded the consequences of the fire in terms of the damages which it caused. Paragraphs 23 to 25 pleaded damages in the form of costs associated with the rectification of physical infrastructure. That plea of loss and damage (which is repeated in the ASOC) of $6,126,472 is not the subject of the present strike-out application.[3]
[9] Paragraphs 26 to 29 identified three categories of damages alleged to have been caused by the fire and claimed by MIM in these proceedings. These are summarised by MIM in its written submissions as follows:[4]
[31] It is necessary to further consider paragraphs 26 to 29 of the ASOC. The defendants identify a number of new facts pleaded in paragraph 26 which include for example the existence or operation of the SAG Mill.[47] As I have already observed, the introductory words to paragraph 26 however remain the same. I accept, as submitted by MIM, that the new paragraphs 26(ca) to 26(ce) inclusive represent a more specific pleading, explaining with greater particularity how the ore throughput rates in metal production were adversely affected.[48] The amendments to paragraph 26 also seek to correct previous inaccuracies. For example, paragraph 26(a) of the original SOC which has been struck out and re-pleaded stated that ore could not be fed to the Heavy Medium Plant by a certain identified conveyor as a result of the fire and the damage caused by the fire. This was technically inaccurate as the fire did not damage or affect the conveyor system by which the ore was fed to the Heavy Medium Plant itself, but rather affected the conveyor system on the other side of the Heavy Medium Plant which carried away the partly-processed ore from Heavy Medium Plant. Whilst the reference to conveyors 60 and 801 was correct, their positioning was inaccurate.[49] Paragraph 26 originally and in its amended form continues to identify the results flowing from the damage to the mining infrastructure caused by the fire and the need to carry out the reinstatement works. The mere fact that these results have been more accurately and precisely identified does not constitute the addition of a new cause of action.
[32] Similarly in relation to paragraph 26(d) the introductory words to this subparagraph remain the same, dealing with the subject matter of ore throughput rates and metal production being adversely affected. The defendants however submit that the allegations about the disruption to works necessary to achieve throughput for the zinc/lead concentrator are new. Further, paragraph 26(d)(ii) of the ASOC for the first time refers to the "commercial aim" of increasing zinc/lead ore throughput of the zinc/lead concentrator to 8 million tonnes per annum by the second half of 2008. The damage to the mining infrastructure caused by the fire and the need to carry out reinstatement works is alleged to have delayed this commercial aim for a period of at least 35 days. The defendants therefore submit that MIM cannot rely on the vague reference in the form of paragraph 26(d)(i) of the original SOC to "disruption to the site and mining operations" to subvert the plain intent of UCPR r376(4).[50]
[33] The allegations in paragraph 26(d) both in the original SOC and the ASOC must be read in light of paragraphs 7 to 9 of each pleading. Paragraph 7(d) of the SOC, for example, pleaded that MIM was in the process of undertaking a mine upgrade project, namely the Revamp Project. Paragraph 9(d) of the SOC has always identified the likely consequence of significant damage being caused to the mining infrastructure as including the prevention or delay of normal maintenance programmes and planned optimization projects. The amendments to paragraph 9(d) now make it clear that such optimization projects include the Revamp Project. Paragraph 9(d) has also been amended to include the word "disruption". It has always been part of MIM's case therefore, that ore throughput rates and metal production were adversely affected due to prevention or delay of normal maintenance programs and planned optimization projects. One of those projects which has always been identified is the Revamp Project. The additional facts pleaded in paragraph 26(d)(ii) in relation to the "commercial aim" does nothing more than particularise one of the aims of the optimization projects. These new facts do not constitute the addition of a new cause of action.
[34] Similarly, paragraphs 26A through to 26C further particularise the effect the fire had on activities which would have improved the output of the processing operations, such as normal maintenance programs and optimization projects. The defendants again highlight and emphasise the new facts that are pleaded in paragraphs 26A to 26C.[51] For example, paragraphs 26A(a) - (c) refer to "the adverse operational and plant performance issues". These matters are pleaded to identify some of the targets of the planned optimization projects, including the Revamp Project. Further facts identify that these adverse operational plant performance issues had been identified and were the target of planned optimization projects prior to the fire. It has always been part of MIM's case that significant damage being caused to the mining infrastructure would prevent or delay planned optimization projects. The new facts pleaded in paragraphs 26A through to 26C do not constitute the addition of new causes of action.
[35] On first reading paragraph 26C of the ASOC I was concerned that the introductory words "by reason of the matters pleaded in 26A above and as a result of the Fire Incident and its consequences" suggested an additional cause of the delay in achieving improvements to production, other than the fire. The correct reading however, as confirmed in oral submissions, is that it remains MIM's case that the causative event was the damage to the mining infrastructure caused by the fire and the need to carry out the reinstatement works.[52]
[36] In relation to paragraphs 27 and 27A of the ASOC I have already noted that both mitigation pleas were found in the original SOC. The first, being the cost associated with the need to install and operate temporary conveyors was pleaded in paragraphs 27 and 28(f)(i). The second mitigation plea now pleaded in paragraph 27A of the ASOC concerning additional costs as a result of the necessity to purchase lead concentrate from third parties was previously pleaded in paragraph 28(h) of the SOC.
[37] As to paragraph 29 of the ASOC, the introductory words remain as originally pleaded except that the amount is amended from $61.25 million to $68,875,963. The original particulars to paragraph 29 of the SOC contemplated the provision of the proper valuation of the amount of loss and damage suffered by MIM by way of an expert report. The particulars now supplied in paragraph 29(d) to (h) constitute particulars of quantification of loss and damage. The methodology as to the calculation of loss has not changed.
[38] On the basis of the above analysis I accept MIM's submission that neither the cause of the damage or the type of the damage are materially different from that originally claimed.[53] Applying the broad brush comparison test, the additional facts pleaded in the ASOC in my view, do not constitute the addition of new causes of action but rather further particularise claims that have been previously advanced. It remains the case that both the original SOC and the ASOC seeks losses under the same four categories.[54] This is not a case where the plaintiff seeks to amend by alleging a different contractual obligation or tortious duty or a different breach. Nor has MIM sought to alter its causation allegations. What the amendments do achieve however, is a more detailed and accurate pleading as to what the planned optimization projects were and their targets and how these projects were prevented, disrupted or delayed.
[39] MIM accepts that paragraphs 26 to 29, as originally pleaded, were succinct.[55] These paragraphs however, when read with paragraphs 7 to 9 of the SOC, were not "so vague as to be devoid of any ascertainable meaning". This was a phrase used by Pincus JA in Draney v Barry.[56] In that case his Honour gave the following warning:
[53] MIM had engaged all of its experts by late 2013.[74]
[54] In December 2013, the third and fourth defendants asked for more time in which to carry out investigations into the claim, and proposed a timeline for the provision of further and better particulars and the filing of defences by the end of January 2014. MIM agreed to that course.[75]
[55] On 20 December 2013, the third and fourth defendants served their request for further and better particulars.[76] In January 2014, MIM asked for an extension of time to provide further and better particulars, to which the third and fourth defendants agreed, together with a similar extension until mid-February 2014 for the third and fourth defendants to file their defences.[77]
[56] On 28 February 2014, MIM informed the third and fourth defendants that preparation of the response to further and better particulars required information that was to be contained in expert reports. MIM's solicitors foreshadowed an intention to amend the SOC "to take account of the findings of the reports". MIM's solicitors suggested that the third and fourth defendants need not take any further steps to prepare a defence until MIM provided its expert reports (and presumably amended the SOC).[78]
[57] On 14 March 2014, the third and fourth defendants' solicitors put MIM's solicitors on notice of the ongoing prejudice caused by MIM's delay in providing further and better particulars, including the death of one of their witnesses. The third and fourth defendants' solicitors asked for a response to the request for further and better particulars by 28 March 2014, and for confirmation of the date by which MIM would amend the SOC.[79]
[58] On 25 March 2014, MIM provided its response to the request for further and better particulars.[80] The letter did not respond to, or acknowledge, the third and fourth defendants' query about the date for the amended pleading.
[59] The third and fourth defendants' solicitors asked for a response to that query on 4 April 2014, and again on 16 April 2014.[81]
[60] On 17 April 2014, MIM's solicitors advised that they expected to receive the relevant expert report by the end of May 2014, and "would amend the claim shortly thereafter".[82]
[61] In November 2014, MIM's solicitors provided documents "in support of our clients [sic] business interruption loss claim" by way of informal disclosure[83] and prior to any orders or interlocutory timetable having been made.
[62] By January 2015, MIM had still not yet amended the SOC, or served any expert reports (some eight months later from when MIM indicated it would provide them). On 23 January 2015, the third and fourth defendants' solicitors again asked for confirmation of the date by which MIM intended to amend the SOC. Again, the third and fourth defendants put MIM on notice of the ongoing prejudice caused by MIM's delay.[84]
[63] On 4 February 2015, MIM's solicitors provided a copy of a quantity surveyor's report, and informed the third and fourth defendants that:[85]
[64] Between 3 March 2015 and 6 November 2015, MIM's solicitors provided further documents and expert reports, by way of "informal disclosure".[86]
[65] On 4 May 2016, more than two years after it was first foreshadowed in February 2014, MIM finally filed the ASOC and served it on the third and fourth defendants.[87]
[66] On 31 May 2016, the third and fourth defendants' solicitors wrote to MIM's solicitors drawing its attention to the fact that it had raised entirely new factual matters and a new cause of action was raised in the ASOC some three years after the end of the limitation period. The letter foreshadowed this application to strike out parts of the ASOC.[88]
[67] MIM accepts that there has been some delay in the proceeding. It submits however that it is not at the upper end of delay. This is not a case where the plaintiff has been inactive and doing nothing.[89] The delay is sought to be explained by MIM in paragraphs 23 to 76 of the affidavit of Mr O'Halloran, who is the solicitor who has conduct of the matter. Prior to the settling of the insurance claim, notice had been given both to the first defendant and the fourth defendant (who had hired out the third defendant) advising of a claim arising from the fire.
[68] MIM engaged an independent forensic accountant in or about April 2013 in order to plead and particularise the common law assessment of damages and loss suffered by MIM.[90] In August 2013 prior to instituting the proceedings MIM discovered that the first defendant had gone into administration.[91] The appropriate applications were made and leave to proceed was granted by Applegarth J on 25 September 2013, with the proceedings being instituted on the same day. Further delay was occasioned by the solicitors for MIM seeking to ascertain from the administrators of the first defendant whether there was an operative insurance policy. No correspondence was received from the administrators by the solicitors for MIM for the period 25 September 2013 to 28 January 2014. Further applications had to be brought by MIM in respect of the first defendant. Throughout 2014, MIM continued with preparation of the recovery action including the obtaining of four expert reports. Each of those reports has been previously provided to the defendants. In addition to the expert reports, six separate disaster reports together with other documentation has been disclosed to the solicitors for the defendants.[92]
[69] MIM submits that the provision of expert reports, disaster reports and disclosure of documents demonstrates that MIM has been active. I accept that while there has been delay, such delay does not render it inappropriate to grant leave if new causes of action were being added.
[70] The prejudice identified by the third and fourth defendants includes the death of a witness, probable loss of documents and the closure of one of its offices.[93] MIM submits however that the references to Ms Priestley's affidavit and the relevant exhibits do not provide evidence in an admissible form of actual prejudice. The reference to the death of a witness appears to be a witness who died in January 2014, which is over three months after the SOC had been delivered. As submitted by MIM, this witness is not identified, nor is the evidence which the witness could have given identified.[94] There is no evidence before the Court that the witness's evidence related to any of the amendments to the damages portion of the pleading. Nor is the closure of the fourth defendant's office identified as being at a particular time. Nor does the general reference to possible loss of documents establish relevant prejudice. It is not at all evident whether these documents have been lost in the period since the institution of the proceeding.
[71] I therefore conclude that had MIM required leave, it would have been appropriate for the Court to grant such leave.