The parties' choices to date in the litigation and the consequences of those choices
56 Despite the applicants not taking action to amend their particulars, there was an equal absence of action from the respondents when they received the statement of Mr Wyzenbeek.
57 The difficulty in this case is that none of the parties prepared their witness statements by reference to the issues which arose in the pleadings. I did not understand any of the parties to suggest that it would not be prudent to prepare witness statements in that manner. There are many advantages of doing so. Firstly, it is efficient because it focuses attention on the live issues in the action. They are the only issues in respect of which evidence is required. Secondly, it avoids wasted costs. Clients' funds ought not to be expended on generating evidence on irrelevant issues. Third, if reference is not made to the issues which have crystallised on the pleadings the parties are likely to extend the scope of the evidence needlessly and issues will be created which do not align with the pleadings. The parties are likely to progress to trial on that false basis with the consequence that at or near to trial the error will be noticed and applications will be made to amend. That is, apparently, what occurred in the present case.
58 What follows from the above is that inadvertence was the origin of the present difficulty and inadvertence was the cause of its continuation. The choices by the parties to not adopt the issues arising from the pleadings as the framework for the witness statements apparently caused them to prepare for trial on the basis of all of the representations which Mr Wyzenbeek identified in his witness statement and on which he claimed that he relied.
59 Mr Sirtes SC, on behalf of the first to fifth respondents, submitted that the proceedings are adversarial such that it is for the applicants to bring their pleaded case to court and prove the same. He variously made submissions to the effect that the respondents were not obliged to take pre-emptive action in relation to the applicants' pleading, that they were entitled to "keep their powder dry" until trial, that a strike out application would merely lead to an application for an amendment, and a respondent should not be forced to effectively improve the case against themselves. These submissions were advanced in relation to the omission of the respondents to advise the applicants of the inconsistency between the pleaded case and the allegations in the statement of claim or to take some form of action in relation to it. That submission requires some analysis in the light of ss 37N and 37M of the Federal Court of Australia Act 1976 (Cth).
60 Even before the reforms to the Federal Court Australia Act in 2010, this Court accepted that certain hitherto accepted practices of adversarial litigation had the untenable effect that matters were not determined on the real issues in dispute, and that the Court's resources and parties' funds were unnecessarily wasted. In an often cited passage in White v Overland [2001] FCA 1333, Allsop J (as the Chief Justice then was) identified that the just resolution of disputes ought not involve procedural machinations designed to entrap the other party. His Honour observed at [4]:
However, by way of general principle I would simply like to make perfectly plain my view that in the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that in the propounding of issues for trial the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue should be discouraged firmly. Even if something has been said, where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. Litigation is not a game. It is a costly and stressful, though necessary, evil. To paraphrase Roscoe Pound from "The Causes of Popular Dissatisfaction with the Administration of Justice" (1906) 29 ABA Rep 395, 404-406, the "sporting theory of justice" and any behavioural manifestation of it should be seen as a survival, or better, a relic, of the days when a lawsuit was a fight between two clans: cf Jackamara v Krakouer (1998) 195 CLR 516 at 526-527 per Gummow and Hayne JJ. Representatives do not owe duties to the other side's client. They owe duties to their own client. But no one's interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false. This is very much the case when an issue, if it is to be propounded, might endanger the instructions of those acting for the other side. In saying this I need make no reference to the well-known responsibility of the Crown and emanations of the Crown to act at all times as model litigants beyond referring to what was said by the Full Court of this Court in Scott v Handley [1999] FCA 404 at [43] ff. I would expect no less than that which I have indicated of bitterly competitive commercial parties in the hardest fought of cases. In the long run, the only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone.
61 These comments have been cited with approval and approbation on numerous occasions, see for instance Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 at [28]; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]. They were referenced by Johnson J in McGuirk v The University of New South Wales [2009] NSWSC 1424 at [26] where his Honour emphasised that the duty of the parties to assist the Court in the overriding objective to facilitate the just, quick and cheap resolution of the real issues in dispute, gives rise to need for "clarity, precision and openness in the conduct of litigation". This is particularly so in circumstances where a failure to do so might take the other party by surprise; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Limited [2008] NSWCA 243 at [161]. For many years, trial by ambush which has the effect of disadvantaging an opposing party has had no part to play in litigation (Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 at [26], [28]).
62 More recently, in the New South Wales Court of Appeal in Benn v State of New South Wales [2016] NSWCA 314 at [62] Gleeson JA (with whom Meagher JA and Johnson J agreed) identified that it was part of the duty of all parties to litigation to ensure that other parties are cognisant of the issues which are sought to be raised in the litigation. His Honour noted that this was not a "new phenomenon" but reflected what has been referred to for some years as the "cards on the table" approach to litigation (see Boyes v Collins (2000) 23 WAR 123; White v Overland [2001] FCA 1333 at [4] and Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[162])
63 In this Court similar statements have been made by Rares J in TJ (on behalf of Yindjibarndi People) v Western Australia (No 2) [2015] FCA 1358 where his Honour explained that in modern litigation, it is the obligation of all parties to ensure that hearings are approached such that the real issues in dispute might be determined:
[8] In my opinion, the procedural rules that apply both under Pt VB of the Federal Court of Australia Act 1976 (Cth) and under the common law require the parties to bring forward their cases frankly, prior to the final hearing. The purpose of case management and the docket system adopted by this court is to enable both the parties and the court to be informed, from the outset, of the case each party intends to advance and to identify the real issues in dispute. This is so that directions can be crafted to enable the efficient management of the litigation, with a view to focusing on and allowing those issues to be tried, and, at the same time, eliminating irrelevant matters quickly and efficiently: White v Overland [2001] FCA 1333 at [3]-[4] per Allsop J (applied by Heydon JA in Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 at 128-129 [28]-[32], Mason P and Young CJ in Eq agreeing); Visible Results Properties Inc v Sushi Train (Australia) Pty Ltd [2005] FCA 1159 at [29] per Allsop J; Snowy Mountains Organic Dairy Products Pty Ltd v Wholefoods Pty Ltd [2006] FCA 1361 at [15] per myself; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[162] per Allsop P, with whom Beazley and Campbell JJA agreed.
[9] In Maniotis v JH Lever & Co Pty Ltd [2006] FCAFC 7 at [72], Finn, Emmett and Bennett JJ said:
In the efficient and proper conduct of civil litigation, even civil litigation hard fought between parties, it should always be recognised that, in the propounding of issues for trial, the parties should take steps to ensure that all relevant parties to the dispute are cognisant of what the issues are. Quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue is a practice that must be firmly discouraged. Where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, common sense will, as a general rule, mandate that a party ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said. No one's interests are advanced by litigation proceeding on assumptions which are seen or suspected to be false. The only consequence of keeping issues hidden or not clearly identifying them is to disrupt the business of the court leading to the waste of valuable public resources and to lead to the incurring of unnecessary costs by the parties, costs which ultimately have to be borne by someone: see White v Overland [2001] FCA 1333 at [4]. (italic emphasis in original; bold emphasis added)
64 Whilst the above comments might be taken as referring to the substantive issues in dispute between parties, on principle they are not so limited. They apply, perhaps with even greater force, to matters of practice and procedure. Where, for instance, a party is of the opinion that a claim in a pleading cannot be sustained at trial, it can only be productive of wasted time and costs for that issue to be held back and only raised at the trial of the matter. Trials, which are expensive to prepare and run, are for the resolution of the substantive disputes between the parties. They do not exist for the purposes of playing out procedural stratagems which might prevent the real issues which exist between the parties from being ventilated. The respondents' claims to be entitled to "keep their powder dry" or to not take steps which might alert the applicants to deficiencies in their pleading must be rejected.
65 Whilst lawyers are obliged to advance their own client's interests, they are to do so within the confines of the obligations imposed by the Federal Court of Australia Act 1976 (Cth). Sections 37N and 37M of that Act impose on the parties and their lawyers the duty to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. It is now beyond doubt that if arguments about the adequacy of pleadings which can be advanced well before a trial, are saved up till trial in the hope of obtaining a forensic advantage, there is a real risk that their resolution will necessitate the adjournment of the trial with the concomitant waste of court time and resources. It can probably not be doubted that the perceived effect of the High Court's decision in AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 has, unintentionally, made the strategy of not advancing pleading points and the like prior to trial somewhat more advantageous. On one view of the decision in AON, a party's failure to ensure that their case is adequately pleaded prior to trial has an almost terminal consequence. On that view, which has a degree of prevalence amongst some of the profession, any amendment sought to be made close to or at trial which might necessitate an adjournment of the hearing has almost no chance of success. However, there is nothing in AON which suggests that it is intended to be used in such a manner. The decision of the plurality identified that the procedural context of that matter was one where "case management principles" dominated and where the rules of Court were intended to minimise delay and expense even though there were no explicit obligations imposed on the parties such as those which emanate from ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). Where such obligations do exist, there is no warrant for a party to keep to themselves until trial complaints about the adequacy of the opposite side's pleading. Fulfilment of the obligations cast by ss 37M and 37N require all parties to take whatever steps are necessary to ensure that the substantive issues between the parties are determined at trial and that involves ensuring that they make clear the case which they intend to advance, including any issue as to the adequacy of their opponent's pleading. To the same extent that a party is not entitled to "leave footprints in the sand" as to the existence of any substantive claim or defence, neither may they conceal any procedural attack on the other party's pleaded case.
66 In the circumstances of the present case, if the issues now in question were appreciated by the respondents well ahead of the hearing and nothing was done about it, there would have been non-compliance with the requirements of s 37M. Happily that did not occur. The solicitors for the respondents have deposed that they did not notice that the allegations in Mr Wyzenbeek's witness statement went beyond the scope of the pleading until shortly before trial when they were considering its admissibility. That explanation is coherent with the fact that the respondents produced a complete response to all of the allegations in the witness statement. It seems that it was possible to answer all of the allegations without difficulty.
67 Although the delay in the raising of this issue surrounding the discrepancy between the particulars and the witness statements was not the result of any conscious decision by any party, all sides chose to press on with the litigation without questioning the sufficiency of the pleading to sustain the substantive evidence which had been delivered. This is particularly true of the respondents who prepared witness statements and, whom presumably, prepared for trial on the basis of the pleaded material facts in the statement of claim and the evidence contained in the applicants' witness statements.
68 These circumstances weigh heavily in favour of allowing the making of amendments which will bring the pleaded claims into line with the action which both parties seemed to have anticipated was to be pursued.