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J M Kelly (Project Builders) Pty Ltd v Toga Development No 31 Pty Ltd (No 6)

 

[2014] QSC 262

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

J M Kelly (Project Builders) Pty Ltd v Toga Development No. 31 Pty Ltd (No 6) [2014] QSC 262

PARTIES:

J M KELLY (PROJECT BUILDERS) PTY LTD

ACN 010 280 412

(plaintiff)

v

TOGA DEVELOPMENT NO. 31 PTY LTD

ACN 103 796 854

(defendant)

J M KELLY GROUP OF COMPANIES PTY LTD

ACN 000 732 856

(defendant by counterclaim)

FILE NO/S:

SC No 3651 of 2006

DIVISION:

Trial Division

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

24 October 2014

DELIVERED AT:

Brisbane 

HEARING DATE:

24 September 2014

JUDGE:

Flanagan J

ORDER:

I will hear the parties as to the final form of the orders and as to costs.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – AMENDMENT –  where the proceedings were commenced over eight years ago – where two separate proceedings were commenced by the defendant and consolidated with the current proceedings – where a large number of allegations and claims in the plaintiff’s fourth further amended statement of claim were struck out – where the proceedings were being supervised – where there was a long history of non-compliance by the plaintiff – where the defendant filed its defence and counterclaim in April 2013 – where the plaintiff, for the first time, alleged a liquidated damages clause was a penalty in its reply and answer (“the penalty plea”) – where the plaintiff and defendant by counterclaim were seeking leave to file and serve a fifth further amended statement of claim including the penalty plea – where the plaintiff and defendant by counterclaim were seeking leave to amend the penalty plea in the reply and answer to avoid it being struck out – where the defendant was seeking to strike out specific pleadings in the statement of claim alleging they were inconsistent with prior court rulings – whether the plaintiff and defendant by counterclaim ought to have leave to amend the reply and answer and to file and serve a fifth further amended statement of claim – whether any pleadings in the statement of claim ought to be struck out as being inconsistent with prior court rulings

Uniform Civil Procedure Rules 1999 (Qld), r 5, r 379

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, applied

Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261; [2010] FCAFC 101, applied

Hartnett v Hynes [2009] QSC 225, applied

COUNSEL:

J Bond QC, with M O Jones, for the plaintiff and defendant by counterclaim

D G Clothier QC, with M S Trim, for the defendant

SOLICITORS:

Tucker & Cowen Solicitors for the plaintiff and defendant by counterclaim

Clayton Utz as town agents for Speed and Stracey Lawyers for the defendant

Introduction

  1. By amended application filed 29 August 2014 J M Kelly (Project Builders) Pty Ltd (“JMK”) seeks leave to file and serve a proposed fifth further amended statement of claim (“5FASOC”).  The most significant amendment sought is the addition of paragraphs 95 to 100 which plead that the liquidated damages provisions of a building contract (“the Contract”) between JMK and the defendant, Toga Development No. 31 Pty Ltd (“Toga”), is void and of no effect as a penalty (“the penalty plea”).  Toga opposes any such grant of leave to amend.
  1. The proposed 5FASOC contains a number of further amendments. These include the deletion of paragraphs and annexures which were struck out by orders made by Dalton J on 13 May 2014 or which JMK has abandoned. These amendments are not controversial. A further amendment sought, in respect of a variation claim VN361, is opposed by Toga. Unlike the penalty plea which had not been pleaded in any of the previous versions of the statement of claim, VN361 has been previously pleaded. The plea of VN361 in the 4FASOC is the subject of an application for strike out filed by Toga on 18 August 2014. Toga’s strike out application has been largely overtaken by JMK’s later application which seeks leave to file and serve the 5FASOC.
  1. JMK and the first defendant added by counterclaim, J M Kelly Group of Companies Pty Ltd (“JMK Group”) also seeks leave to file and serve an amended reply and answer containing (by way of cross-reference) the penalty plea. This is also opposed by Toga.  In simple terms, if leave is granted to add the penalty plea to the 5FASOC then JMK may use it as a sword for the purposes of making a money claim against Toga.  If leave is restricted to only permitting the penalty plea to be pleaded in the amended reply and answer, then JMK and JMK Group may only use it as a shield to the money claim made by Toga in its counterclaim.
  1. To appreciate the significance of the amendments sought in respect of the penalty plea in relation to both the 5FASOC and the amended reply and answer it is necessary to have regard to the background and history of the present litigation. In this respect, I have been assisted by two annexures detailing the background to these proceedings.[1]  This background, with a few exceptions, is generally agreed as between the parties.[2] I have drawn upon these annexures for the purposes of detailing the relevant background below.

Background and brief history of the proceedings

  1. Toga was the developer of the ‘Swell’ project on the old Burleigh Heads Hotel site at Burleigh Heads. The project includes residential and hotel components.
  1. The project was built by JMK, which was engaged under the Contract in June 2004 at a price of $50,018,219 (excluding GST). The Superintendent under the Contract was Suters.
  1. Practical completion of the last Separable Portion of the project was certified by Suters in late 2006.
  1. JMK had been paid, by January 2007, a total amount of $55,884,892.17 (including GST) made up as follows:
  1. $47,735,143.13 for Contract work;
  1. $4,790,201.28 for variations;
  1. $633,991.64 for provisional sum adjustments;
  1. $543,612.88 for delay costs;
  1. $18,451.22 for GMP adjustments;
  1. $5,370,059.11 for GST, Less,
  1. $20,809.09 for works carried out at that time by Toga; and,
  1. $3,185,758 for liquidated damages.
  1. The parties have been in dispute since 2005 about the project.
  1. JMK commenced proceedings against Toga approximately eight years ago on 3 May 2006.
  1. By the initial statement of claim, JMK alleged that the agreement between the parties was partly written, partly oral and partly implied. The effect of its claim was that there was a binding and enforceable agreement outside the Contract — but it did not claim rectification of the Contract. The pleading described this agreement as “the JMK Contract” and the scope of works under it as “the Trade Cost Allocation Works”. A series of contractual claims was then formulated by reference to a scope of works dictated by these concepts.
  1. The statement of claim alleged an alternative case in the event that the court dismissed the first claim and held that the Contract contained the parties’ bargain. That case was based on a contravention of section 52 of the Trade Practices Act 1974 (Cth).
  1. On 11 September 2006 Toga filed a Defence. In paragraph 29, Toga denied the existence of “the JMK Contract” and alleged that the parties were bound by the Contract.
  1. On 5 February 2008, Toga commenced separate proceedings in the Supreme Court (959 of 2008) against JMK and JMK Group for the payment of $907,326.28 in respect to Payment Certificates numbered 51, 52, 54, 56B, 57B, 59, 60 and 61. Toga’s claim against JMK Group was pursuant to a deed of guarantee entered into by Toga, JMK and JMK Group on 20 July 2004, whereby JMK Group guaranteed JMK’s performance under the Contract. JMK and JMK Group filed a conditional notice of intention to defend on the basis that substantially the same questions arose in the present proceedings. On 20 March 2008, Daubney J ordered that proceedings 959 of 2008 be consolidated with these proceedings.
  1. On 4 March 2009, some 3 years after the proceeding was commenced and after the filing and service of 4 versions of the statement of claim, the court made orders in relation to the identification of issues that might be tried separately.
  1. On about 2 November 2009, the trial of issues was set down for 4 weeks commencing 10 May 2010.
  1. JMK filed a third further amended statement of claim (“3FASOC”) on 31 March 2010.
  1. By the 3FASOC, JMK continued to maintain an agreement outside of the Contract. However, instead of alleging that the agreement was binding and enforceable, it claimed rectification of the Contract so as to accord with it. The agreement was described in the pleading as “the Agreement”, a term used as a substitute for “the JMK Contract”. The scope of works for which JMK contended continued to be described as “the Trade Cost Allocation Works”. A series of building claims was advanced based on the Contract rectified to accord with “the Agreement” and “the Trade Cost Allocation Works”.
  1. The trial of the separate issues occurred before Martin J over 13 days in May and June 2010.
  1. On 21 October 2010, Martin J dismissed all of the claims committed to him for decision. After submissions by the parties, on 10 February 2011, Martin J ordered JMK to pay Toga’s costs in relation to the trial of issues up to the filing of the 3FASOC on the indemnity basis and thereafter on the standard basis. The effect of Martin J’s decision and JMK losing its rectification claim was that JMK had to replead its case to ensure it was advanced by reference to the Contract.
  1. On 25 November 2010, Toga’s solicitors sought JMK’s advice about whether JMK intended to continue with any of its outstanding claims in the proceedings. JMK’s solicitors responded on 2 December 2010 to the effect that their client was proceeding with the balance of its claims and was considering amendments to the 3FASOC which would be provided in “early 2011”.
  1. In the meantime the Contract remained on foot and Suters, as the Superintendent, continued issuing Certificates of Payment under the Contract for the period December 2010 to August 2012. Toga commenced separate proceedings in the Supreme Court against JMK and JMK Group on 4 February 2011 (816 of 2011) in respect of Certificate of Payment No 72 in the amount of $3,395,880.18. On 10 March 2011 JMK and JMK Group filed a defence in these proceedings. This defence did not seek to defend any claim for liquidated damages on the basis that the relevant contractual provisions were void and of no effect as a penalty. On 29 November 2012, Atkinson J ordered that Supreme Court proceeding 816 of 2011 be heard and managed with Supreme Court proceeding 365 of 2006.
  1. Proceeding 3651 of 2006 was listed for review on 30 May 2011. On 27 May 2011, JMK filed and served an application and affidavit material seeking until 30 November 2011 to file and serve a fourth further amended statement of claim (“4FASOC”). The affidavit material included an affidavit from JMK’s solicitor who deposed that JMK’s quantity surveyor, Mr Leck, had been retained and that to complete his retainer would take him a further six months.
  1. At the review on 30 May 2011, the court ordered that JMK deliver its proposed 4FASOC by 29 July 2011. In the course of doing so, the supervising judge, Boddice J, expressed concern at the prospect of JMK having 12 months from Martin J’s decision to amend its pleading.
  1. JMK did not comply with this order. Instead, on 29 July 2011, being the last day for compliance, JMK filed an Application to extend the time to 30 November 2011.
  1. A directions hearing occurred on 31 August 2011 at which JMK sought the further extension of time in its application.
  1. At the review on 31 August 2011, JMK was ordered to deliver its proposed 4FASOC by 14 October 2011. Again Boddice J expressed concern at the length of time taken by JMK. During the course of the hearing:
  1. Senior Counsel for JMK informed the court that a draft 4FASOC in JMK’s affidavit material identified the claims to be pursued on the Contract as found by Martin J “in a rigorous way”. This was a reference to the body of the pleading rather than to any proposed annexures to it; and
  1. Boddice J put JMK on notice that time was running out. His Honour stated that the process had “just been going on for too long” and that “under UCPR5 that is just appalling”. His Honour also warned JMK that he was contemplating a guillotine order.
  1. On 14 October 2011 JMK delivered its proposed 4FASOC. It was not the version upon which JMK relied; that version was not provided until April 2012.
  1. The 4FASOC was actually filed on 14 June 2012 in accordance with the terms of a consent order. The consent order was agreed on the express reservation by Toga of the right to seek to strike out such parts of the 4FASOC as it may be so advised. The orders also expressly specified that JMK was not to further amend its statement of claim in the proceeding except by leave of the court.
  1. Toga requested further and better particulars of the 4FASOC in August 2012 and November 2012. In substance the requests sought the particulars of the variation and extension of time claims that Toga’s solicitors’ letters of 17 May 2012 and 31 May 2012 had said ought properly be pleaded in the final 4FASOC.
  1. JMK did not respond to Toga’s requests for particulars in August 2012 and again in November 2012 but despite this, on 22 April 2013, Toga filed its defence and counterclaim. Toga’s counterclaim primarily relies on Certificate of Payment No 76 issued by Suters on 17 August 2012 in the amount of $7,537,334.06. The Certificate was issued under cover of letter from Suters dated 17 August 2012.

“Certificate of Payment No 76 certifies payment for the value of work carried out by the Contractor up to the 17 August 2012, and includes amounts payable under clause 35.6, 36, 42.4 and the cost of completing work not in accordance with the Contract as instructed under clause 30.3 and 37 of the Contract.

Certificate of Payment No 76 also reconciles and includes for all overdue and outstanding amounts due from the Principal or from the Contractor.”

  1. COP 76 shows a total amount payable to Principal (including GST) of $7,537,334.06. This amount is calculated in part by deducting from the value of building work completed (including GST) liquidated damages in the amount of $5,190,838.50.
  1. By July 2013, and nearly 12 months since its first request for particulars, JMK had still not responded to those requests and Toga relisted the proceeding.
  1. At the review on 16 July 2013 before Boddice J, JMK acknowledged it had failed to respond to the requests for particulars in a timely or reasonable manner and that this had occurred in the context of its previous poor performance.
  1. JMK was granted additional time to provide its responses to the requests for particulars and was ordered to file its reply and answer by 24 September 2013, having sought only to have the matter adjourned until that time in order to then advise the court how much time it needed. His Honour warned JMK that if it continued to not comply with orders any application by Toga to dismiss the proceedings could then be listed.
  1. JMK purported to comply with the court’s order to provide responses to Toga’s requests for particulars.[3]
  1. JMK did not file the reply and answer on 24 September 2013 as ordered, but reported to the court on 20 September 2013 that it expected that it would be in a position to file on 8 November 2013.
  1. His Honour ordered JMK to deliver its reply and answer by 8 November 2013 and warned JMK that if there was more non-compliance with that order Toga could bring an application to dismiss the proceedings at that time.
  1. JMK filed its reply and answer on 8 November 2013.
  1. On 12 November 2013 the court made orders by consent in relation to the filing and preparation of Toga’s application to strike out parts of the 4FASOC.
  1. JMK first alleged that the liquidated damages clause of the Contract, clause 35.6, was unenforceable as a penalty in paragraph 51(d)(iii) of its reply and answer filed on 8 November 2013.[4] This was:
  1. 7 ½ years after the commencement of the proceedings;
  1. after 6 versions of the statement of claim (not including unfiled drafts) and over 20 notices of dispute dealing with liquidated damages in which no such contention was advanced; and
  1. despite the 4FASOC making no such claim and indeed making a claim based on clause 35.6 for the recovery of liquidated damages alleged to have been wrongfully deducted on the basis of incorrect Dates for Practical Completion and Dates of Practical Completion.[5]
  1. Toga in paragraph 25 of its rejoinder pleads that the “allegations should be struck out as an impermissible attempt to amend the 4FASOC and for lack of particulars.”[6]
  1. After Toga’s earlier strike out application was set down for hearing, JMK’s solicitors wrote foreshadowing a strike out application of Toga’s liquidated damages claims in the counterclaim on the basis of its penalty allegations. They contended that such an application raised issues of law and could be determined in a few hours without regard to any evidence other than the Contract. Notwithstanding the fact that Toga’s solicitors disagreed with this assessment, on 18 February 2014 JMK filed an application to strike out (amongst other things) Toga’s claim for liquidated damages on the basis that clause 35.6 is a penalty.[7]
  1. JMK and Toga filed submissions in connection with JMK’s strike out application on 17 March and 16 April 2014 respectively.[8]  Toga’s submissions contended, amongst other things, that paragraph 51(d)(iii) of the reply and answer:
  1. was inconsistent with allegations and claims in the 4FASOC and constituted an impermissible attempt to amend the 4FASOC without leave;
  1. did not plead the material facts which, according to JMK’s submissions, were relied on to allege that clause 35.6 is a penalty and was therefore liable to be struck out; and
  1. was based upon an incorrect construction of the Contract and a misapplication of the principles relating to penalties.
  1. In consequence of receiving Toga’s submissions, JMK agreed shortly before the hearing that its strike out application be dismissed with costs.
  1. Toga’s strike out application, JMK’s strike out application and an application by JMK for leave to withdraw admissions and limited leave to amend were heard by Justice Dalton on 6 and 7 May 2014.
  1. JMK’s application for leave to withdraw admissions was resolved during the hearing. Also during the hearing JMK conceded for the first time that several parts of its pleadings attacked by Toga ought to be struck out. It filed an amended application for leave to amend and, later still, orally sought leave to replead in respect of all struck out allegations. Its several changes of position were a feature of the hearing.
  1. On 9 May 2014, Dalton J delivered reasons striking out all of the allegations attacked by Toga at the hearing before her with no leave to JMK to replead and dismissing JMK’s application and amended application for leave to amend. Orders were made on 13 May 2014. Justice Dalton ordered that:
  1. JMK pay Toga’s costs of its strike out application and JMK’s application and amended application for leave to amend on the indemnity basis;
  1. JMK not amend its reply and answer or particulars without leave.  In conjunction with the existing order that JMK not amend its statement of claim without leave, this meant that JMK was precluded from amending any pleading or particular without leave;
  1. JMK’s director, Geoffrey Murphy, and its in-house counsel, Andrew Sinclair Ford, be given a copy of the reasons and file affidavits stating that they have read the reasons and they understand Dalton J’s view that JMK’s claim is in jeopardy of being dismissed because of JMK’s conduct in the proceeding; and
  1. if JMK does make any further application for leave to amend, it is to be supported by an affidavit sworn by a director of JMK which explains, in a detailed and substantive way, why the case which is sought to be articulated by the proposed amendment has not been previously articulated.
  1. The orders in (a) and (b) were sought by Toga. The orders in (c) and (d) were made by Dalton J of her own volition.
  1. Dalton J’s reasons disclose the basis for orders made. They include that:
  1. The 4FASOC advanced claims that were inconsistent with the judgment of Martin J, inconsistent with other claims and otherwise deficient.  JMK had also attempted to circumvent the court’s order requiring leave to amend the 4FASOC by making inconsistent allegations in particulars and in the reply and answer.
  1. The 4FASOC advanced claims for the payment of money based upon the difference between the (alleged) proper value of work and amounts certified in Certificates of Payment (COP) that had never been acted upon (and that JMK alleged were void).  The claims should have been for the difference between the proper value of work and what JMK had in fact been paid in respect of that work.  That was not pleaded and by the time of the hearing JMK was unable to articulate what it says was owed.
  1. Although JMK sought leave to amend, there was no draft pleading, no articulation of what it was owed and no explanation for its failure to properly articulate its claims.  It adopted the approach of obtaining expert reports in a piecemeal way over a substantial period of time.  Generally those reports demonstrated that JMK’s pleaded claims were inaccurate.  Rather than directly address this, JMK only sought leave to amend in accordance with the reports (many of which it had for some time) responsively to Toga’s strike out application.  This continued a pattern of JMK progressing and seeking to change its case in its own time rather than in accordance with directions of the court or its obligations under the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”).
  1. Justice Dalton was in particular concerned that the proceeding had not got beyond the stage of pleading.  Her Honour described JMK’s conduct in the proceedings as “outrageous” and characterised by an “extraordinarily long series of defaults and extraordinarily irrational behaviour”.  Her Honour referred to the fact that when JMK was granted leave to file and serve the 4FASOC, its Senior Counsel informed the court that it “had been told that it would have almost no prospects of making a further amendment” and her Honour referred to JMK circumventing the requirement for leave by making inconsistent allegations in particulars and the reply and answer.  Her Honour concluded that JMK had engaged in “a course of conduct which is extraordinarily delinquent and dilatory, irrational and, frankly, contemptuous of the court’s authority”.
  1. The orders included directions for JMK to provide, by 23 May 2014, a proposed amended annexure 1 to the 4FASOC and a proposed amended reply and answer containing amendments in consequence of the withdrawal of admissions and in limited other respects. The directions required that Toga notify its attitude to those amendments and that an application for leave to amend be filed in respect of them if required. No direction was sought by JMK about other types of amendments including any amendments to the 4FASOC or the proposed amended reply and answer so as to include the penalty plea.
  1. On 15 May and 19 May 2014 respectively, affidavits of Mr Murphy and Mr Sinclair-Ford were filed in response to Dalton J’s directions.[9]
  1. On 23 May 2014, JMK’s solicitors provided a proposed amended annexure 1 to the 4FASOC and proposed amended reply and answer without most of its annexures.[10] The proposed amended reply and answer was said to contain amendments that were “slightly broader” than contemplated by Dalton J’s directions.  However it contained paragraph 51(d)(iii) in an unamended form. 
  1. Toga’s solicitors responded on 30 May 2014 pointing out the absence of annexures, the need for a proposed 5FASOC and various other issues (including continued references to struck out allegations). They sought a proposed 5FASOC “properly reflecting all the abandoned and struck out paragraphs and claims.”[11]
  1. The letter formally advised that leave to amend was opposed based upon the matters set out in it but, in the interests of avoiding an unnecessary application, indicated a preparedness to agree a modification to the directions to enable the matters set out in the letter to be addressed.
  1. JMK did not take up that invitation. Instead, on 6 June 2014 further drafts of the proposed amended annexure 1 and proposed amended reply and answer and an application for leave to amend in respect of them were provided. The application was made returnable on 2 July 2014. It was supported by an affidavit from JMK’s solicitor that said that he was instructed that both pleadings “are in the form of the pleadings which JMK wishes to file and which identify the allegations upon which JMK intends to advance its case to trial.”[12] The proposed amended reply and answer again contained paragraph 51(d)(iii) in an unamended form. 
  1. In the covering letter dated 6 June 2014, JMK’s solicitors agreed that it was appropriate to provide a proposed 5FASOC “which addresses the issues referred to in your letter”. No broader amendments were foreshadowed. The letter stated that a proposed 5FASOC would be provided within approximately two weeks.[13]
  1. A proposed 5FASOC had not been provided by 23 June 2014 and Toga’s solicitors wrote chasing it up.[14] JMK’s solicitors responded that it would be provided by 2 July 2014.[15] As a result, JMK’s amendment application was adjourned to 8 August 2014.
  1. The proposed 5FASOC was provided on 2 July 2014.[16] It included paragraphs 95 to 104 in relation to the penalty issue.  The covering letter stated, amongst other things:[17]

“Paragraphs 95 to 104 – these paragraphs plead that the liquidated damages clause of the contract is void as a penalty.  This is not intended to introduce a new issue in the proceedings.  Rather, it is intended to plead what is already alleged at paragraphs 9 and 51(d)(iii) of the Reply and paragraphs 40(f)(ii) and 109 of the Answer.  We consider it is more appropriate to articulate these allegations in the Statement of Claim.”

  1. In respect of each of these matters, JMK contended that the proposed 5FASOC simply relocated existing allegations into the statement of claim.
  1. An application for leave to amend was filed on 11 July 2014 supported by an affidavit from JMK’s solicitor but without any affidavit from a director of JMK. The only explanation offered in support of the application was by reference to what was said in the 2 July 2014 letter.[18]
  1. The covering letter said that an affidavit from Mr Murphy would be filed and served “shortly”.[19]  Toga’s solicitors then asked for the affidavit to be provided “without delay” so Toga could assess its attitude.[20] JMK’s solicitors responded providing an unsworn affidavit and stated:[21]

“[B]ecause the current proposed 5 FASOC (which you have) only proposes ‘formal’ amendments (in the sense that it relocates claims, makes deletions due to the recent orders of the court and corrects errors) it is anticipated that Mr Murphy’s affidavit will also be short and formal.  In other words it will not add anything new (because nothing ‘new’ in a substantive sense is added to the proposal claims).  Therefore we do not see that it can or will in any way affect your clients assessment of the proposed 5FASOC.”

  1. The executed affidavit of Mr Murphy was provided on 24 July 2014.[22]
  1. Toga’s solicitors substantively responded to the proposed 5FASOC on 28 July 2014 identifying the reasons why Toga did not consent to leave being granted in respect of it. Paragraphs 95 to 104 (penalty allegations) were described as “inexplicably late, not clearly pleaded and inadequately particularised” and JMK was invited to withdraw them.[23]
  1. JMK’s solicitors responded on 31 July 2014. The invitation to withdraw paragraphs 95 to 104 (penalty allegations) was declined. It was said for the first time that those paragraphs represented the pleading of “necessary further material facts” in an attempt to address the defects complained of in Toga’s 17 March 2014 written submissions.[24]
  1. On 8 August 2014, directions were made for the hearing of JMK’s application and a strike out application by Toga. On 25 August 2014, an affidavit was filed from JMK’s solicitor. He deposes that:
  1. In light of Toga’s solicitors’ comments in its 28 July 2014 letter, he instructed counsel to review and reconsider the proposed 5FASOC, in particular whether the penalty plea should be removed from it.  This resulted in a further proposed 5FASOC which, relevantly, retained and amended the penalty plea[25]
  1. Having considered Toga’s 17 March 2014 written submissions, JMK “considered that it was appropriate to plead further material facts on the penalty argument and JMK’s application on that point was dismissed by consent”.[26]
  1. JMK’s solicitors have subsequently confirmed, in response to a request from Toga’s solicitors, that paragraph 51(d)(iii) of the reply and answer is effectively abandoned and should be struck out.[27]

The nature of the amendment application in governing principles

  1. In the present proceedings no trial dates have been allocated nor has any request for trial date been filed. The amendments are however opposed. This brings into operation r 379 of the Uniform Civil Procedure Rules 1999 (“UCPR”) which provides:

379Disallowance of amendment

(1)If a party makes an amendment without leave before the filing of the request for trial date, another party may, within 8 days after service on the party of the amendment, apply to the court to disallow all or part of the amendment.

(2)On the application, the court may make an order it considers appropriate.”

  1. Rule 5 of the UCPR is also relevant:

5Philosophy—overriding obligations of parties and court

(1)The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2)Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

(3)In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

(4)The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court.”

Example—

The court may dismiss a proceeding or impose a sanction as to costs, if, in breach of the implied undertaking, a plaintiff fails to proceed as required by these rules or an order of the court.

  1. The parties agree that the principles applicable to the determination of the application for leave to amend are those identified by Applegarth J in Hartnett v Hynes.[28]  His Honour outlined, by reference to Aon Risk Services Australia Limited v Australian National University (“Aon”)[29] and r 5, 12 principles with respect to amendments for which leave is required:[30]

“The principles discussed by the High Court in Aon inform the exercise of the discretion to grant leave to amend a claim pursuant to UCPR 377 and the discretion to allow or direct a party to amend a claim or a pleading pursuant to UCPR 375. I have already referred to some of these principles in discussing the operation of UCPR 5 in the case of amendments made without leave pursuant to UCPR 378 and the Court’s power to disallow such amendments or make directions concerning further amendment of a claim or a pleading in order to avoid prejudice to the other party and to comply with the rules of civil procedure and their purpose. In the context of the present application and in respect of amendments to the claim or the statement of claim for which leave is required, the following principles assume importance:

  1. An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation.

2The discretion is guided by the purpose of the rules of civil procedure, namely the just and expeditious resolution of the real issues in dispute at a minimum of expense.

  1. There is a distinction between amendments which are necessary for the just and expeditious resolution of ‘the real issues in civil proceedings’ and amendments which raise new claims and new issues.
  1. The Court should not be seen to accede to applications made without adequate explanation or justification.
  1. The existence of an explanation for the amendment is relevant to the Court’s discretion, and ‘[i]nvariably the exercise of that discretion will require an explanation to be given where there is a delay in applying for amendment’.
  1. The objective of the Court is to do justice according to law, and, subject to the need to sanction a party for breach of its undertaking to the Court and to the other parties to proceed in an expeditious way, a party is not to be punished for delay in applying for amendment.
  1. Parties should have a proper opportunity to plead their case, but justice does not permit them to raise any arguable case at any point in the proceedings upon payment of costs.
  1. The fact that the amendment will involve the waste of some costs and some degree of delay is not a sufficient reason to refuse leave to amend.
  1. Justice requires consideration of the prejudice caused to other parties, other litigants and the Court if the amendment is allowed. This includes the strain the litigation imposes on litigants and witnesses.
  1. The point the litigation has reached relative to a trial when the application to amend is made is relevant, particularly where, if allowed, the amendment will lead to a trial being adjourned, with adverse consequences on other litigants awaiting trial and the waste of public resources.
  1. Even when an amendment does not lead to the adjournment of a trial or the vacation of fixed trial dates, a party that has had sufficient opportunity to plead their case may be denied leave to amend for the sake of doing justice to the other parties and to achieve the objective of the just and expeditious resolution of the real issues in dispute at a minimum of expense.
  1. The applicant must satisfy the specific requirements of rules, such as UCPR 376(4) where it seeks to introduce a new cause of action after the expiry of a relevant limitation period.” (footnotes omitted)
  1. The application of these principles will vary from case to case. As stated by Keane CJ, Gilmour and Logan JJ in Cement Australia Pty Ltd v Australian Competition and Consumer Commission:[31]

Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.”

Submissions of JMK and JMK Group (Penalty Plea)

  1. Mr Bond QC, who appeared with Mr Jones for JMK and JMK Group, submitted that the application for amendment seeks to achieve two things in respect to the penalty plea. The first is to move the plea from where it currently exists in the reply and answer.[32]  The second is to make amendments to the form of the plea in order to respond to criticism which had previously been advanced by Toga. 
  1. Whilst the form of the proposed penalty plea in paragraphs 95 to 100 of the 5FASOC is more extensive, I accept Mr Bond’s submission that a comparison of the content of the existing plea and the proposed amended plea reveals that the issue raised is the same one.[33]
  1. Mr Bond properly conceded, in light of the history of the litigation (some of which I have outlined above), that JMK’s conduct of the litigation falls below the standard required of it.[34]
  1. Mr Bond submitted that JMK and JMK Group are and were always entitled to raise the penalty plea at the least by way of defence to Toga’s counterclaim, which was filed on 22 April 2013.[35]  Once this is accepted then it follows that the issue of whether the liquidated damages provisions of the contract are a penalty squarely arises as an issue in the litigation.  In those circumstances Mr Bond submits that the placement of the penalty plea in the statement of claim rather than by way of amendment to the reply and answer is a better course in that it facilitates a just and expeditious resolution of the issues.  According to Mr Bond if the penalty plea is pleaded in the statement of claim this will avoid the need for any plea subsequent to amendments to Toga’s defence (unless Toga pleaded facts that required a reply).[36] 
  1. Mr Bond also submitted that the penalty issue raised by JMK and JMK Group is not only arguable but correct.[37]
  1. He emphasised that the counterclaim of Toga filed 22 April 2013 not only counterclaims against JMK but also against JMK Group as guarantor. JMK Group is the first defendant added by counterclaim but has never been a plaintiff in the present proceedings. If the proposed amendments to the reply and answer are not granted then JMK Group will be deprived of any ability to raise the penalty issue in respect of Toga’s counterclaim based on COP76 in the amount of $7,537,334.06. As I have stated in paragraph [32] above this amount is calculated in part by deducting liquidated damages in the amount of $5,190,838.50 from the value of building work completed (including GST). As to the amounts that have already been paid to JMK pursuant to COP53, these amounts have been calculated by deducting approximately $3.5m by way of liquidated damages.[38]  Mr Bond in oral submissions accepted that if the penalty plea was added to the statement of claim then JMK would advance a money claim to recover the amount of liquidated damages that had been held back.[39] 
  1. Mr Bond developed his submission that the liquidated damages provisions of the contract are a penalty by reference to the expanded definition of “practical completion” contained in special condition clause 2 of the Contract. He submitted that this special condition amended the definition of “practical completion” in such a way as to require completion of many items down to the last detail. He submitted that reading the promise in general condition clause 35.2 with the extended definition of “practical completion” JMK was required by the Contract to have executed the work under the Contract by the date of practical completion such that all the matters listed in the definition of practical completion had been completed.[40] 
  1. Extensive submissions were provided both orally and in writing to support the correctness of this proposition.[41]  These submissions were made for the purposes of establishing that the issue raised by the penalty plea was not only arguable but correct.  Mr Clothier QC, who appeared with Mr Trim for Toga, submitted that the penalty plea, whilst not unarguable, was certainly not strong.[42]  It is sufficient in determining the present application for amendment to proceed on the basis that the penalty plea raises an arguable issue.  Neither party sought to have the court determine the penalty plea as a preliminary issue. The court is therefore not in a position to determine the ultimate correctness of the submission that the liquidated damages provisions of the contract are void and of no effect as a penalty.  It should be noted however that the mere fact that the penalty issue is arguable is not of itself sufficient to permit amendment and prevail over the objectives of rule 5 of the UCPR.[43]
  1. As to issues of delay, explanation and prejudice, Mr Bond’s submission was that the penalty plea, having been properly raised by JMK and JMK Group in answer to the counterclaim, any delay or prejudice identified by Toga in respect to the litigation arises in any event.[44]  Mr Bond further submitted that as the penalty plea is raised in answer to Toga’s counterclaim this constitutes, together with the concerns raised by Toga as to the original penalty plea, sufficient explanation for the amendment applications.

Toga’s submissions

  1. Mr Clothier identified as the critical consideration the delay and the effect it will have on the future conduct of the proceedings if the amendments were granted.[45] 
  1. The delay that Mr Clothier sought to emphasise was in respect to the litigation as a whole. He identified that the first time JMK ever raised the penalty plea as an issue was in their reply and answer in November 2013. This was in circumstances where the litigation had been proceeding for over eight years and the issue of liquidated damages, as evidenced by COP53, was a real and live issue as between the parties.
  1. Mr Clothier also submitted that Mr Murphy’s affidavit does not explain, “in a detailed and substantive way”, why the case which is sought to be articulated by the proposed amendments has not previously been articulated:[46]

“It contains no proper explanation as to that, including as to why it apparently had not occurred to JMK (an experienced builder) that clause 35.6 is a penalty rather than a genuine pre-estimate of loss reached after an arm’s length negotiation between sophisticated commercial parties.  Rather than demonstrating that this aspect of the amended application evidences the understanding that the Court has attempted to impress on JMK on many occasions, the evidence demonstrates that it represents a continuation of JMK’s conduct in seeking to inexplicably change its case in its own time and contravene Court orders along the way.  The amendments to the penalty allegations ought to be refused for these reasons alone.”

  1. Mr Clothier whilst identifying that the present proceedings had not been set down for trial submitted that this ought not to be a material consideration; in fact quite the contrary, because the only reason the matter has not been set down for trial or is close to trial is because of the conduct of JMK.[47]
  1. As to Mr Bond’s submission that JMK “is and always was” entitled to make the penalty allegations at least by way of defence to Toga’s counterclaim. Mr Clothier submitted that this submission should be rejected:[48]

“This submission demonstrates a continuation of the very attitude that the Court has repeatedly warned against – an attitude of entitlement to change its case as and when JMK sees fit.  In any event the submission is flawed.  JMK had no right to make allegations in the [reply and answer] inconsistently with allegations in the 4FASOC without amending the 4FASOC and it had no entitlement to amend the 4FASOC.  Moreover, since earlier this year it has had no entitlement to amend the [reply and answer].  The matter is within the discretion of the Court.”

  1. As to the prejudice identified in Mr Scott’s affidavit in paragraphs 13 to 19,[49] Mr Clothier conceded that this prejudice arises if the court were only to permit an amendment to the answer to the counterclaim.[50] 

Consideration

  1. In applying the objectives of r 5 and the principles in Aon, it is important to identify the relevant period of delay which requires explanation.  As the plurality identified in Aon at [103]:[51]

“Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.”

  1. I shall deal first with the amendment to the reply and answer. The reason that leave was required to make any amendment to the reply and answer was because of the orders made by Dalton J on 13 May 2014 which included an order that JMK not amend its reply and answer or particulars without leave.
  1. The answer is in response to a counterclaim filed by Toga on 22 April 2013. The counterclaim was not just against JMK but also against JMK Group. Whilst it may be accepted the JMK and JMK Group have common directors, they are separate legal entities. JMK Group has never been a plaintiff in the present proceedings. Its liability for any amount claimed by Toga arises from a deed of guarantee. For JMK Group the penalty plea, albeit in a different and insufficient form, was initially raised in its first answer to the counterclaim.
  1. I note that there was delay on the part of JMK and JMK Group in filing the reply and answer. This delay is for the period May to November 2013. In respect to this period of delay the proceedings were being supervised by Boddice J. His Honour granted JMK and JMK Group additional time for the purposes of filing its reply and answer. Initially such a reply and answer was to be filed by 24 September 2013 but a further indulgence was given to file the reply and answer on 8 November 2013. As I have already observed when the reply and answer was filed on this date it contained the original penalty plea in the answer.
  1. A counterclaim is in effect an original proceeding. Chapter 6, part 5, division 2 of the UCPR deals with counterclaims.  Rule 175 provides:

175Application of div 2

This division applies to a counterclaim and an answer to a counterclaim with necessary changes and, in particular, as if the plaintiff in the original proceeding were a defendant and the defendant a plaintiff.”

  1. Rule 178 permits a defendant to make a counterclaim against a person other than the plaintiff (whether or not already a party to the proceeding) if the matters in r 178(1)(a) and (b) are satisfied. This is what occurred in the present case. Toga, on 23 April 2013, commenced a counterclaim against JMK and JMK Group.  As observed in [31] above, Toga’s counterclaim primarily relies on COP76 which was issued by Suters on 17 August 2012.  COP76 therefore was issued after the 4FASOC, which was filed on 14 June 2012 in accordance with the terms of a consent order.[52]  COP76 constitutes a substantial claim against JMK and JMK Group.  It also increased the amount of the calculation of liquidated damages from approximately $3.5m under COP53 to approximately $5.1m under COP76.
  1. As to the position of JMK Group, Mr Clothier specifically referred to the earlier proceedings namely Supreme Court numbers 959 of 2008 and 816 of 2011.  These proceedings were brought both against JMK and JMK Group.  The point made by Mr Clothier is that in defending these proceedings neither JMK nor JMK Group raised any penalty issue.  There is however, in my view, no substance to this observation.  The previous proceedings were in relation to different amounts and different certificates.  Supreme Court number 959 of 2008 was for an amount of $907,326.28 in respect of COP51, 52, 54, 56B, 57B, 58C, 59, 60 and 61.  JMK and JMK Group, as I have identified in [14], only filed a conditional notice of intention to defend on the basis that substantially the same questions arose in the present proceedings.  Similarly, as identified in [22], Supreme Court number 816 of 2011 was in respect of COP72 in the amount of $3,395,880.18.  Whilst a defence was filed in those proceedings they were ultimately consolidated with the present proceedings.  Further, Suters’ covering letter to COP76 makes it clear that COP76 reconciles and includes all overdue and outstanding amounts due from the principal or from the contractor.[53]
  1. The counterclaim based on COP76 must therefore be viewed as a fresh claim. The original reply and answer sought to raise the penalty issue in respect to this new claim.
  1. The amendments now sought to the reply and answer are entirely explicable by reference to the concerns in relation to the original penalty plea raised in the submissions of Toga in response to JMK’s strike out application referred to in paragraphs [42] to [44] above.
  1. This is not a situation where a party seeks to add a new cause of action either on the eve of trial or sooner. The amendment in is relation to an existing plea contained in an answer to a counterclaim first filed in April 2013. In those circumstances neither the application of the objectives in r 5 nor the principles in Aon result in JMK and JMK Group being refused leave to amend an existing plea contained in an answer to a relatively fresh counterclaim.
  1. I would therefore grant JMK and JMK Group leave to amend the reply and answer as proposed in respect of the penalty plea.
  1. The question then arises whether leave should be granted to add the penalty plea to the 5FASOC. Given that the same delay and prejudice arises in respect to leave to amend the answer, I see no reason, in terms of the application of r 5 or the Aon principles, to refuse leave to amend the 5FASOC.  I accept the submission of Mr Bond that the better course to facilitate the just and expeditious resolution of the issues in the pleading is to permit the penalty plea to be added to 5FASOC.  I appreciate that by permitting such an amendment JMK, in spite of its poor conduct, will be able to make a money claim for withheld liquidated damages against Toga.  This consequence arises however because of Toga bringing a counterclaim based on COP76.  If I was to limit the amendment only to the reply and answer then one would have proceedings where a determination of the penalty issue in favour of JMK would result in it partially defeating the counterclaim of Toga yet being unable to claim back amounts withheld because of the operation of the same liquidated damages provisions.  This would mean that there may be differing results and consequences in the same litigation in respect to the one legal conclusion.  Such a situation should be avoided.  I am also concerned that if I was to refuse leave to amend the 5FASOC but permit amendment only to the reply and answer this may possibly constitute utilising case management principles as a means of punishment.

VN361

  1. This variation is pleaded by JMK in both the 4FASOC and the reply. These pleas are the subject of a strike out application filed by Toga on 18 August 2014. The application is brought pursuant to r 171 of the UCPR.  The principles in respect of the application of this rule are well established.[54] 
  1. Toga identified three matters of complaint:

(a)inconsistencies between the relevant pleadings in the 4FASOC and the reply;

(b)the confusing and unclear way in which the claim is expressed; and

(c)the pleas are inconsistent with the decision of Dalton J.

  1. In paragraphs 16 and 17 of the 4FASOC, JMK alleges it was directed to vary the work under the Contract by direction pursuant to clause 40.1 of the general conditions of the Contract. The variation claims are set out in annexure 3 to the 4FASOC. VN361 is one of those claims. This variation is in respect of painting to external precast panels.
  1. Toga submitted that JMK’s case, based on clause 40 of the general conditions of the Contract, requires a number of material facts to be properly pleaded and particularised as follows:[55]

“ (a)the alleged direction by the Superintendent;

   (b)the work under the Contract the subject of the alleged direction;

  (c)the claimed:

(i)increase, decrease or omission;

(ii)change of character or quality;

(iii)change of levels, lines, positions or dimensions;

(iv)additions; or

(v)demolition or removal,

of materials or work, or part of any work, under the Contract, allegedly directed by the direction, and

  (d)the claimed prices and rates for each item of material or work used to calculate the value or the variation.”

  1. The claim in respect to VN361 is for $443,584.43 together with interest. The VN361 claim includes an amount for scaffolding of $288,053. Extracts from COP53[56] shows that in respect of VN328, JMK was certified and paid an amount of in excess of $374,000 for scaffolding.  I should pause to note that the only differences between VN361 as pleaded in the 4FASOC and in the proposed 5FASOC are that the latter version:[57]

(a)contains a “credit” item for the amount assessed for scaffolding under VN328 whereby the amount claimed by VN361 was reduced by the amount certified by the superintendent for VN328; and

(b)consequential changes to the amounts claimed in columns 8 and 9 of annexure 3 to take into account the reduced claimed value.

  1. JMK sought to identify the primary difference between the parties in respect to VN361 as follows:[58]

“The issue concerning VN 361 can be described in short compass.  By its reply, JMK admitted that VN 361 included a claim for work which had been valued by the Superintendent in respect of a separate variation claim, VN 328.  The complaint with respect to VN 361, as appears from Toga’s solicitors’ letter dated 28 July 2014, is that VN 361, as amended, now includes a deduction for the amount certified by the Superintendent for that item of work under VN 328 rather than the amount paid to JMK pursuant to VN 328.”

  1. Toga’s complaint is that the plea does not reflect the actual amounts that JMK has been paid for this variation: a factor which Dalton J criticised and identified in the previous strike out decision. JMK however submits that the figures certified by the superintendent for VN328 is the appropriate figure to deduct where JMK’s claims is articulated as the difference between the amount which the superintendent in fact certified for VN361 and the amount which JMK claims the superintendent ought to have certified with respect to that claim.
  1. The inconsistency with the decision of Justice Dalton was identified in oral submissions by Mr Clothier as follows:[59]

“That’s the very point that was articulated before and decided by Justice Dalton; that a variation claim has to be formulated by reference to reality.  The difference between what you say you should’ve got and what you actually got.  That’s not what this formulation does, and it doesn’t do it because it takes an amount in COP74, which, it’s common ground, has never resulted in a payment, as being the credit amount, rather than the amount that was certified in COP53, which is what they actually got.”

  1. Mr Bond submitted that Dalton J did not deal with VN361 and her Honour did not rule on the present pleaded case in respect of VN361. It is necessary to identify the relevant part of her Honour’s reasons which is said to apply to the present strike out application. At page 3, lines 23 to 30 of her Honour’s reasons of 9 May 2014 the following observation was made, in the context of JMK’s claim for landscaping cost:[60]

“There is a second problem – certificate of payment COP74, while issued, has never been acted upon. That is, the plaintiff has never been paid in relation to its claim for landscaping, in accordance with COP74. With one qualification, the plaintiff accepts that it has been paid in accordance with COP53 – see paragraphs 40(a), 40(b), 62, 69, 76, 83, 90 and 97 of the reply and answer. That is, the plaintiff’s claim, as articulated, is one for moneys which are calculated not on a real basis, but on the basis of a certificate which has never been acted upon. This is the second reason why the plea is untenable,”

  1. The distinction here, as submitted by Mr Bond is that the claim being advanced is one for which JMK has not been paid.[61]  Whilst it is correct that JMK has not been paid any moneys in respect of VN361, they have been paid an amount of $374,655.70 in respect of VN328 which constituted payment in relation to scaffolding to external facades.  Toga’s contention on the strike out application is not so much that JMK should not be able to run a case based on VN361 but rather that such a case should be properly formulated in accordance with Justice Dalton’s reasons.[62]  I accept this submission.  In conformity with her Honour’s ruling JMK should plead its case in respect to VN361 by reference to the difference between what it says should be paid and how much JMK has actually been paid.  In the application of her Honour’s ruling it makes no difference that JMK is yet to be paid for VN361 because it has already been paid for VN328.  As the 4FASOC has been overtaken by the proposed 5FASOC and there is also a proposed amended reply and answer, rather than strike out any paragraphs, I would order that the 5FASOC and proposed amended reply and answer be pleaded in respect of VN361 so as to reflect what it was actually paid in relation to scaffolding. 

Conclusion

  1. I grant leave to JMK to file and deliver a 5FASOC containing the penalty plea (as defined in these reasons).
  1. I grant leave to JMK and JMK Group to file and deliver an amended reply and answer which cross-references to the penalty plea.
  1. Any plea in the 5FASOC in respect of VN361 is to be pleaded in accordance with these reasons.
  1. I will hear the parties as to the final form of the orders and as to costs.

Footnotes

[1] Annexure 1 to the defendant’s written submissions dated 28 March 2014; Annexure 1A to the defendant’s written submissions dated 17 September 2014.

[2] JMK response to Toga’s Annexure 1A dated 23 September 2014.

[3] Court documents 235-237 and 239-241.

[4] Court documents 247 to 251.

[5] Fourth further amended statement of claim filed 14 June 2012, [46]-[52].

[6] Rejoinder to reply and reply to answer to counterclaim filed 21 June 2014, [25].

[7] Court document 259.

[8] Court documents 265 and 272.

[9] Court documents 278, 279.

[10] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 135-228

[11] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 232-233.

[12] Affidavit of Richard Terrick Cowen sworn 6 June 2014, [9].

[13] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 234-242.

[14] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 243.

[15] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 244.

[16] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 257-430.

[17] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 258.

[18] Affidavit of Richard Terrick Cowen sworn 11 July 2014, [9].

[19] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 432.

[20] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 433.

[21] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 435.

[22] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 440.

[23] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 441-443.

[24] Exhibit HRS5 to the affidavit of Hugh Robert Scott sworn 15 August 2014, 444-446.

[25] Affidavit of Tyler David Griffin sworn 22 August 2014, [15]-[16].

[26] Affidavit of Tyler David Griffin sworn 22 August 2014, [26].

[27] Exhibit HRS6 to the affidavit of Hugh Robert Scott sworn 16 September 2014, 3-4.

[28] [2009] QSC 225.

[29] (2009) 239 CLR 175.

[30] Hartnett v Hynes [2009] QSC 225, [27].

[31] (2010) 187 FCR 261, 275-276 [51].

[32] As identified in paragraph [41] above.  The penalty plea was first alleged in JMK and JMK Group’s reply and answer filed on 8 November 2014.  The principle allegation is contained in paragraph 51(d)(iii) with related allegations contained in paragraphs 9(a) of the reply and paragraphs 44(b)(ii), 108, 109, 110 and 111 of the answer.

[33] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [29].   

[34] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [8](e)(i). 

[35] Court documents 226-228.

[36] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [8](d).

[37] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [8](c). 

[38] Transcript of proceedings, 24 September 2014, 1-23, lines 1-3.

[39] Transcript of proceedings, 24 September 2014, 1-22, lines 34-40.

[40] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [38], [39].

[41] Written submissions by plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [31]-[65]. 

[42] Transcript of proceedings, 24 September 2014, 1-60, lines 37-40.

[43] Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, 215 [105].

[44] Transcript of proceedings, 24 September 2014, 1-11, lines 15-25, 1-15, lines 5-12. 

[45] Transcript of proceedings, 24 September 2014, 1-48, lines 18-22.

[46] Defendant’s written submissions for the plaintiff’s amended application to amend its pleadings dated 17 September 2014, [36]. 

[47] Transcript of proceedings, 24 September 2014, 1-58, lines 10-20.

[48] Defendant’s written submissions for the plaintiff’s amended application to amend its pleadings (24 September 2014), [43]. 

[49] Affidavit of Hugh Robert Scott sworn 16 September 2014, [13]-[19].

[50] Transcript of proceedings, 24 September 2014, 1-30, lines 45-47, 1-31, lines 1-35.

[51] Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175, 215 [103].

[52] See [29] above.

[53] See [31] above.

[54] See defendant’s written submissions for its application to strike out parts of the plaintiff’s pleadings dated 29 August 2014, [16], [17].    

[55] See defendant’s written submissions for its application to strike out parts of the plaintiff’s pleadings dated 29 August 2014, [27].

[56] The coloured copy extract of COP53 is exhibit 4.

[57] Written submissions by the plaintiff and defendant by counterclaim in response to the defendant’s strike out application dated 17 September 2014, [24].

[58] Written submissions by the plaintiff and defendant by counterclaim in support of their amendment applications dated 29 August 2014, [26](e).  

[59] Transcript of proceedings, 24 September 2014, 1-74, lines 19-25.

[60] Transcript of proceedings, judgment, 9 May 2014, 3, lines 23-30.

[61] Transcript of proceedings, 24 September 2014, 1-83, lines 37-42.

[62] Transcript of proceedings, 24 September 2014, 1-75, lines 12-15.

Close

Editorial Notes

  • Published Case Name:

    J M Kelly (Project Builders) Pty Ltd v Toga Development No 31 Pty Ltd (No 6)

  • Shortened Case Name:

    J M Kelly (Project Builders) Pty Ltd v Toga Development No 31 Pty Ltd (No 6)

  • MNC:

    [2014] QSC 262

  • Court:

    QSC

  • Judge(s):

    Flanagan J

  • Date:

    24 Oct 2014

Litigation History

No Litigation History

Appeal Status

No Status