Singtel Optus v Almad

Judgment (EX TEMPORE - REVISED 5 august 2013) 1HIS HONOUR: I am concerned with an application (made in the course of a final hearing) by the first defendant to amend a paragraph of its response to the Further Amended Commercial List Statement (FACLS) by withdrawing an admission. 2The background to the application is that the first defendant, Almad, provided services to one or other of the plaintiffs, to whom it is sufficient to refer as "Optus". 3Paragraph 14 of the FACLS alleges that during the relevant period, "Almad provided transport and logistics management services, including storage, scrapping and labour to" Optus. That is said to have been done pursuant to something known as the "Almad Arrangements". 4Paragraph 15 alleges that pursuant to those arrangements, Almad would collect and transport, or procure the collection and transportation of, equipment and stock owned by one or other of the Optus companies. It alleges, further, that Almad would arrange storage for that equipment and stock. It makes other allegations which need not be examined. 5It is tolerably clear, both from the evidence and from the pleadings as a whole, that Optus regarded Almad as some sort of broker for the purpose of arranging transportation and warehousing services. So much was acknowledged by Mr Natale of Optus in his evidence this morning. That is also alleged by Optus against Almad in para 28A of the FACLS. 6Paragraph 17 of the FACLS alleges that from time to time Almad and Optus entered into contracts "for the provision of the transport and logistics management services by Almad to" Optus. The particulars to that paragraph make it clear that what Optus is alleging is not one overarching or master contract, performed on numerous occasions by requests for and provision of services. Rather, it is the case that is pleaded and particularised that each time such a request was made and performed, and an invoice generated, there was a separate contract. The particulars contain the assertion that "to the extent that such contracts were in writing they included" certain invoices rendered by Almad to Optus. 7Paragraph 18 alleges that there were implied terms and conditions of those contracts. The first is said to be that "Almad would only charge...Optus for services actually provided and not overcharge". 8The other implied terms alleged are of good faith and co-operation. 9Those implied terms were admitted. Almad now wishes to withdraw the admission of the first - that it would charge only for services provided and would not overcharge. 10There are other parts of the FACLS that are relevant. In particular, so it seems to me, one should refer to the allegations of breach in para 23. The first of those which is now pressed is an assertion that Optus was invoiced for a number of pallets stored which exceeded the number actually stored. The second is that Optus was overcharged in relation to both the rate per pallet and the cost of moving pallets between stores. There are also allegations of overcharging in relation to labour and in relation to scrapping. 11Clearly enough, those allegations of breach can be traced back to the implied term pleaded in para 18(a). 12When the question of amendment was raised some days ago, I expressed the tentative view that, as a matter of language, para 17 of the FACLS (which is the paragraph that alleges the making of the contracts for provision of services) could be taken to plead that there was a contract between Optus and Almad by which Almad undertook to provide management services in relation to transport and logistics. Mr Rayment of Queens Counsel, who appears with Mr Johnson and Ms King of counsel for, amongst others, Almad, embraced that suggestion. 13However, Mr Stoljar of Senior Counsel, who appears with Mr Mackay of counsel for the Optus companies, pointed out that para 17 could also be read as in some way referring back to and incorporating the definition of the "Almad Arrangements" in para 14. It will be recalled that in para 14, the transport and logistics management services were said expressly to include "storage, scrapping and labour". 14If the view of para 17 for which Mr Stoljar contends is correct, then the allegation of an implied term would extend not just to the provision of management services but, at least arguably, also to the underlying services arranged, including services of storage, scrapping and provision of labour. 15It is certainly correct, as Mr Stoljar submitted, that this more expansive reading of the implied term is consistent with para 23: the paragraph alleging breach. 16There is evidence from those then responsible for the conduct of the defence on behalf of Almad that they understood the pleading, as it then stood (and this is well before the amendments which introduced the expanded definition of "Almad Arrangements" into para 14, and which introduced the fresh allegations of breach into para 23) of the implied term as related to the limited view of services which I tentatively indicated. It is also the case that support for that limited view could be found in an exchange of request for and supply of particulars, in relation to an earlier but not materially different version of para 18(a) (the allegation of the implied term) in July 2011. 17It does seem to me to be undesirable, if it can be avoided, to determine the application for leave to amend by expressing a concluded view as to the proper construction to be given to the pleaded case. It is sufficient to say that, up to and including the FACLS, the pleading of the plaintiff's case is not spectacularly clear, and that it is possible to take a range of views, which range encompasses the views for which, respectively, Mr Rayment and Mr Stoljar argues. 18I was taken to the decision of the Court of Appeal in Maile v Rafiq [2005] NSWCA 410. In that case, Tobias JA, with whom Brownie AJA agreed, referred, if I may say so by a somewhat circuitous route, to the well-known judgment of Santow J in Drabsch v Switzerland General Insurance Co Limited (16 October 1996, unreported). In that case, dealing with a commercial dispute, Santow J made a number of points. The first was that where there was a clear and distinct admission which was accepted and acted upon, the Court should not freely grant an application for leave to withdraw it. 19The second was that although each matter required consideration on its merits and individual facts, nonetheless there should be good reason offered why an admission should be allowed to be withdrawn. 20The third point made by Santow J was that an admission made after full consideration and advice, and a proper opportunity to reflect, would not ordinarily be permitted to be withdrawn. 21The final points made by his Honour were that admissions contrary to fact, or made inadvertently or without due consideration, should generally be permitted to be withdrawn unless the other party has somehow changed its position in reliance on the admission. 22I accept that those are principles relevant to the exercise of the discretion. Nonetheless, the discretion is one which is at large, and is not to be confined by reference to the principles stated. Further, it is necessary to bear in mind the overriding objective set out in s 56 of the Civil Procedure Act 2005 (NSW). 23If I may start however by looking at what Santow J said, the first question is whether there was a clear and distinct admission. 24In terms, it could be thought that the admission was clear and distinct. However, the reference to "services actually provided" leaves unresolved the question of what those services were. By reference back to para 17, it could be thought that they were management services. By reference to the admitted position of Almad as a broker or intermediary (see para 28A of the FACLS) it could be thought that they were agency or broking services of a kind provided by such persons but not the actual services arranged or broked. 25Alternatively, if para 17 was intended to pick up the Almad Arrangements referred to in para 14, but by some quirk of the drafter's word processor did not, the reference in para 18(a) could be thought to be wider; and likewise, if para 23(c) is taken into account. 26Looking at the range of meanings possible, and the alternatives available both on the pleading and on the facts, I have some difficulty in characterising the substance of the admission, as opposed to the words used, as being in any way "clear and distinct". That is because, as I have said, it leaves at large the question of what were the "services actually provided". 27If it is necessary to go to the reason why the admission was made, it does seem to me, despite Mr Stoljar's criticisms of its generality, that the evidence for Almad provides that explanation. It seems that those advising Almad took a view of the pleading (as it stood at an earlier time, to be sure, and thus not including all the subsequent refinements) which was not unlike that which I tentatively expressed some days ago in the course of argument. I find it hard to say that someone who had taken a view which accorded with a view that I expressed, even tentatively, was acting entirely unreasonably. 28It does not seem to me that the third of Santow J's considerations applies. There is no suggestion here of consideration, expert advice, full opportunity to consider and the like. 29Whether or not the admission is contrary to the actual facts depends, so it seems to me, on what one might expect from a broker in the role of Almad. That is something which can be pursued in the cross-examination of, in particular, its principal, Mr Philip Davey. 30Certainly, it seems to me, there is reason to think that the admission was made inadvertently or without due consideration of material matters. 31The first and last of the principles to which Santow J drew attention in Drabsch looked at the position of the opponent: the party having the benefit of the admission. The only suggestion here of any prejudice, of a kind encompassed by those considerations, was that the categories of agreed discovery had been settled by reference to the pleadings, including the admissions. That may be accepted. But what we have alleged are implied terms. If what is relied upon is implication in law then it seems to me that discovery would not be of any relevance. If, on the contrary, what is being intended is implication in fact, then that is something which would be expected to emerge not from such scanty documents (on that topic) as the parties may possess but, again, from the way in which they dealt with each other and what (if anything) they said to each other. In this case, each party has had (and has availed itself of, I regret to say) a more than ample opportunity to go into that sort of evidentiary detail. 32Stepping back from the detail for a moment, and looking at what seems to me to be the balancing considerations of justice and injustice, I do think that there could be a significant injustice to Almad if, upon mature reflection and detailed consideration of the pleaded case against it, it were to be taken to have admitted something which it did not intend to admit, particularly if that should prove to be inconsistent with whatever emerges from the factual matrix. In that hypothetical circumstance, what Optus would lose would be a tactical advantage, but not something which would otherwise be capable of causing it prejudice in the relevant sense. On the contrary, if the factual matrix supports the case that Optus wishes to make out, then it will suffer nothing by having the admission withdrawn. 33In short, it seems to me, there is no relevant (as opposed to purely tactical) disadvantage to Optus, and the potential for significant detriment to Almad. 34In circumstances where it does not seem to me that it can be said that Optus acted to its detriment, or changed its position, by reference to the admission, or acted upon it in any material way, I think that the balance of convenience favours granting Almad the leave that it seeks. 35Accordingly, I grant leave to Almad to amend its Commercial List Response to the Further Amended Commercial List Statement by withdrawing para 19.1 thereof and substituting for it a non-admission of para 18(a) of the FACLS. 36I direct that the amended response be filed and served by 5pm tomorrow.