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  • Unreported Judgment

Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd

 

[2012] QSC 308

 

SUPREME COURT OF QUEENSLAND

  

CITATION:

Sandvik Mining and Construction Australia Pty Ltd  v Dempsey Australia Pty Ltd & Anor [2012] QSC 308

PARTIES:

SANDVIK MINING AND CONSTRUCTION AUSTRALIA PTY LTD
(plaintiff)
v
DEMPSEY AUSTRALIA PTY LTD
(first defendant)
and
BARRY WILLIAM DEMPSEY
(second defendant)

FILE NO:

9137 of 2007

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Brisbane 

DELIVERED ON:

12 October 2012

DELIVERED AT:

Brisbane 

HEARING DATE:

29 August 2012

JUDGE:

Peter Lyons J

ORDER:

  1. The Defendants have leave to make the amendments proposed in paragraphs 81 and 82 of the document marked Exhibit 2, save for paragraphs 82(b) and (e) to (g).
  2. The Plaintiff and the Defendants’ costs of and incidental to the application filed 21 August 2012, including the costs of and incidental to the appearances on 29 August 2012, 4 October 2012 and today, be costs in the cause.
  3. Otherwise, the Defendants pay the Plaintiff’s costs of and caused by the amendments made in the Amended Defence to the Fourth Statement of Claim and Counterclaim to be assessed on the standard basis.

CATCHWORDS:

PROCEDURE - SUPREME COURT PROCEDURE - QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS - PLEADING - GENERALLY - where plaintiff has sued the first defendant for an amount for goods and services supplied - where the defendant has counterclaimed and claimed damages for breach of contract and damages or compensation for misleading conduct under the Trade Practices Act 1974 and the Fair Trading Act 1989 - where orders were made on 19 April 2012 to the effect that the first defendant required leave before it might amend its defence and counterclaim - where the defendants seek leave to amend the defence and counterclaim - where paragraph 81 of the amendment alleges a fact in support of the misleading conduct claims and paragraph 82 of the amendment identifies a number of facts from which it is said the fact alleged in paragraph 81 is to be inferred - whether the facts pleaded in paragraph 82 could rationally support an inference that the allegation in paragraph 81 is true - whether the allegations sought to be made are speculative - whether the application is brought too late - whether r 668 of the Uniform Civil Procedure Rules 1999 applies such that the defendant is prohibited from seeking leave to amend

COUNSEL:

RA Holt SC with DLK Atkinson for the plaintiff

BD O’Donnell QC with D Pigott for the defendant

SOLICITORS:

Thomsons Lawyers for the plaintiff

McCullough Robertson for the defendant

  1. In September 2004 the first defendant entered into a contract to provide drilling services to Mt Isa Mines Limited at the Black Star open cut mine at Mt Isa, for a period of two years. The drilling requirements were set out in a production schedule which specified the number of metres of holes to be drilled each month, as well as the diameter of the holes to be drilled.
  1. To perform that contract, the first defendant purchased four drilling rigs from the plaintiff. Two were Titon 600 drilling rigs, respectively referred to as DA15 and DA16; and two were Pantera 1500 drilling rigs. The Titon rigs were capable of drilling larger holes than the Pantera rigs.
  1. It seems to be common ground that a number of difficulties were encountered with the use of the Titon drilling rigs on the project.
  1. The plaintiff has sued the first defendant for an amount slightly in excess of $1,000,000 for goods and services provided by it to the first defendant. The first defendant has counterclaimed, by reason of the difficulties it experienced, principally with the Titon drilling rigs.
  1. The first defendant claims damages for breach of contract, including breach of warranty implied by statute. It also claims damages or compensation for misleading conduct under the Trade Practices Act 1974 (Cth) (TPA) and the Fair Trading Act 1989 (Qld) (FTA) (together the misleading conduct claims).  The case has been subject to management in the Supervised Case List for more than three years.  Orders were made on 19 April 2012, the effect of which is that the first defendant requires leave before it might amend its defence and counterclaim.  In the present application, the defendants seek leave to amend the defence and counterclaim, in accordance with the document which became exhibit 1, subject to some changes identified in exhibit 2.
  1. Leave to make those amendments is opposed in respect of amendments to the allegations in support of the misleading conduct claims. They are found in paragraphs 81 and 82, as set out in exhibit 2 (contested amendments).  Otherwise the application is ultimately unopposed, save that a condition requiring further amendments to schedules 5 and 6 should be imposed (a condition accepted by the defendants).

Submissions

  1. It was submitted for the plaintiff that the contested amendments were substantially the same as those for which leave was sought on 2 April 2012. On that occasion, leave was refused by Dalton J. It was submitted that the application sought to vary an order, and accordingly it could not be granted unless the requirements of r 668 of the Uniform Civil Procedure Rules 1997 (Qld) (UCPR) were satisfied; and that they were not, in this case. 
  1. Paragraph 81 of the amendment alleges a fact, in support of the misleading conduct claims. Paragraph 82 identifies a number of facts from which it is said the fact alleged in paragraph 81 is to be inferred. The plaintiff submitted that the contested amendment should not be allowed, because the facts alleged in paragraph 82 do not provide a basis for inferring the fact alleged in paragraph 81.
  1. It was further submitted in opposition to the application that the amendments proposed in paragraphs 81 and 82 were sought very late in the action, without explanation. It was submitted that the allegation in paragraph 81 was speculative; and that there was no expert evidence in support of it. It was submitted that the facts pleaded in paragraph 82 were pleaded inadequately, and were too general to enable the plaintiff to meet them. It was submitted that the contested amendment would substantially lengthen the trial, and delay its commencement. It was submitted that if the contested amendments were permitted, considerable expense would be incurred on the part of the plaintiff, itself a matter relevant to the exercise of the discretion in the circumstances of this case.
  1. Reliance was placed on statements found in Aon Risk Services Australia Ltd v Australian National University[1]and Groves v Groves.[2]  Principles relied upon by the plaintiff included the following:

(a)Justice is the paramount consideration in determining an application to amend proceedings;

  1. While the just resolution of the proceedings remains paramount, speed and efficiency, in the sense of minimal delay and expense, are essential to a just resolution of proceedings;
  2. It is not the case that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs;
  3. Even where an amendment does not lead to an adjournment of a trial, a party that has had sufficient opportunity to plead its 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 with a minimum of expense.
  1. It may be accepted that there are statements in the cases referred to which support these statements of principle.
  1. For the defendants it was submitted that r 668 of the UCPR did not apply. It was submitted that the application was made in circumstances which were quite different from those in which Dalton J refused the earlier application; and on different evidence, including an explanation for the fact that the amendments were proposed at this stage of the proceedings. It was submitted that the facts alleged in paragraph 82 could well provide a basis for the fact alleged in paragraph 81.
  1. It is convenient to say something further of the history of the case. In about September 2011, it was set down for a six week trial, to commence on 10 April 2012. On 14 February 2012, the plaintiff was given leave to amend its statement of claim. The defendants were given leave to file and serve an amended defence and counterclaim by 16 March 2012. They did so on 23 March 2012, but included amendments beyond those responding to amendments to the statement of claim. The plaintiff objected to the amendments, and on 2 April 2012 Dalton J refused leave to the defendants to make the challenged amendments.
  1. The trial was subsequently adjourned, for reasons of no present relevance. When that happened, Dalton J recommended that the defendants review their pleadings. The defendants have then produced a number of versions of an amended defence and counterclaim, ultimately leading to the present application.

Support for inference in paragraph 81?

  1. The major matter pressed on behalf of the plaintiff was that the facts pleaded in paragraph 82 could not rationally support an inference that the allegation in paragraph 81 is true. No authority was cited to show that an amendment should not be permitted on this ground. In Landoro (Qld) Pty Ltd v Jensen International Pty Ltd[3] it was held that amendments should not be refused, unless the claims which they raised were so obviously untenable that they could not possibly succeed.  It seems to me, by analogy, that an application to amend to allege a fact which is to be inferred, and the facts relied on for the inference, should not be refused unless it is obvious that, if those facts were proven, the inference could not be drawn.
  1. To understand the issue raised by the plaintiff, it is necessary to say something about the allegations contained in paragraphs 80, 81 and 82 of the proposed amended defence and counter-claim. Effectively, the first defendant seeks to plead in paragraph 80 that had it not been induced by representations made by the plaintiff to purchase the Titon rigs and the Pantera rigs, it would have purchased two Atlas Copco drilling rigs, being model number ROC L8 (the L8s); and two Atlas Copco drilling rigs, being model number ROC L7 (the L7s); and,  in paragraph 81, that with the L7s and the L8s it would have met the requirements of the production schedule for the Black Star Mine. 
  1. It then seeks to plead that the fact alleged in paragraph 81 is to be inferred from a number of matters. Some might be regarded as merely background narrative, and, by themselves could not provide a basis for the inference alleged. However, it seems to me that some are in a different category.
  1. Thus paragraph 82 (c) pleads that the L8 rig was suitable for drilling holes with diameters up to 203 millimetres; working in ambient temperatures up to 50 degrees celsius; and performing as identified in a technical data sheet which forms part of Atlas Copco manuals. Paragraph 82 (d) makes similar allegations about the L7 rig, though a smaller hole diameter is nominated.
  1. The technical data sheet nominates for various bit sizes (reflecting, it would appear, hole diameters) and levels of pressure generated by a compressor, the rate of penetration in Swedish granite, based on standardized laboratory testing. The rate is expressed in millimetres per minute.
  1. The production schedule identified the work to be done monthly, and specified the number of metres to be drilled by reference to patterns and hole diameters. It also gave some information about patterns, being a number which appears to be the relevant hole diameter and another number which was unexplained. The production schedule also provided some information about the type of material to be drilled, described as either ore, weathered waste or fresh waste.
  1. The purpose of the technical data sheet would appear to be to permit those operating drill rigs to determine (either themselves, or with the assistance of consultants who can translate the results of the standardised testing to results to be expected when drilling in different materials) the time which would be required to drill a specified number of metres. Whether or not that be so, on its face, paragraphs 82 (c) and 82 (d), taken together, appear to allege facts from which the fact alleged in paragraph 81 might be inferred.
  1. The plaintiff relied upon evidence of an engineer, Mr Frank Grigg, who expressed the opinion that even if the facts alleged in paragraph 82 were true, they could not support the conclusion set out in paragraph 81 because, “the matters alleged do not go to whether the L8 and L7 rigs (however many there were and whenever they arrived) ‘would have met the requirements of the Production Schedule as to metres and diameters of holes to be drilled’.” In my view, the technical data sheet goes to the capacity of the rigs to drill holes of specified diameters, and to achieve the number of drilled metres. It seems to me that Mr Grigg has not adverted to the technical data sheet when expressing his opinion.
  1. Another allegation in paragraph 82 is that Atlas Copco Construction and Mining Australia Pty Ltd, the seller to the Australian market of the L7 and L8 rigs, represented that the rigs would meet the requirements of the Black Star project. The allegation is particularised by reference to emails of 23 and 26 July 2004 from that company. The fact of the representation may well be thought not to be a fact from which the allegation in paragraph 81 might be inferred; but it rather points to the existence of direct opinion evidence in support of the allegation. However the plaintiff did not object to this allegation on the basis that it pleaded evidence, and not a fact.
  1. There are a number of allegations that the L7 and L8 drilling rigs have proven to be reliable when operating in hot and dusty conditions comparable to Black Star; and that these rigs were not materially different to those referred to in paragraph 81. It is not clear that these allegations are sufficient to support the allegation in paragraph 81. They may, however, be relevant to the drawing of an inference from the information on the technical data sheet. Moreover, the allegations are made in terms which are somewhat imprecise. For the defendants it was submitted that it was sufficient to make the allegations as they appear, and that the detail to be supplied by evidence led in respect of them will demonstrate whether they support the inference pleaded in paragraph 81. It was also submitted that attempts had been made to obtain more detailed information about these facts. However, relevant documents would have to be obtained by way of non-party disclosure, and that cannot occur until the amendment is permitted.
  1. It may be that particularisation of these allegations would demonstrate that they could not support the fact alleged in paragraph 81; or that they may support it; or that they positively establish it. The effect of the submissions made for the defendants appears to be that they cannot at this stage, better particularise the allegations; and can not do so without non-party disclosure. It is not uncommon for a party to allege a fact which it cannot particularise without some form of disclosure. Moreover, as things stand, it is not clear these allegations would not, taken in isolation, support the allegation in paragraph 81. For those reasons, and because of their potential relationship to the drawing of an inference from the information on the technical data sheet, I would not be prepared to refuse leave in respect of them.
  1. It might be observed that some of the information already obtained is for penetration rates achieved by an L8 rig at Black Star (though operating somewhat deeper than the defendant was in 2004 to 2006); and an opinion by the operator that the production schedule could have been achieved using a fleet of four drilling rigs, including two L8 rigs (the other two rigs were not identified).
  1. Paragraph 82 (b) alleges that the L7 and L8 rigs are in direct competition with the Pantera and Titon rigs. I do not see how that allegation, or evidence led in support of it, could play a role in inferring the fact alleged in paragraph 81. Paragraphs 82 (e) to (g) make allegations about the sale of L7 and L8 rigs in Australia.  Again, I do not see how those allegations, or evidence led in support of them, could play a role in inferring the fact alleged in paragraph 81.  Accordingly, I do not propose to grant leave in respect of them.
  1. I am not prepared to find that the facts alleged in paragraph 82 (other than those alleged in paragraph 82 (b) and paragraph 82 (e) to paragraph 82 (g)) could not establish the fact alleged in paragraph 81.
  1. It follows that I do not accept that the allegation sought to be made in paragraph 81 is speculative. The absence of an expert report is explained by the need for further documents, which can only be obtained by non party disclosure. However, the absence of such a report does not warrant refusing leave to make the contested amendments, if they should otherwise be allowed.

Other matters

  1. The evidence in the present application, unlike the application determined by Dalton J, included an explanation for the lateness of the contested amendments. It is that, for the first time, the second defendant instructed the defendants’ lawyers that, but for representations alleged to have been made by the plaintiff about the Titon rigs, the first defendant would have purchased a package of four rigs from Atlas Copco, being the L7s and the L8s; and would not have purchased the Pantera rigs (or the Titon rigs); and that he gave those instructions at that time because it had not previously occurred to him that it would be relevant to the case that the first defendant purchased the L7s instead of the Pantera rigs. No attempt was made to challenge the second defendant’s evidence on this point. In those circumstances, it seems to me that I should accept it.
  1. For the plaintiff, it was said that this explanation did not reflect well on the second defendant, and indicated that he was not attempting to have the proceedings resolved expeditiously. It seems to me that the explanation revealed that the second defendant does not fully appreciate what matters are relevant to the litigation; but that does not, of itself, demonstrate that he is unwilling to proceed expeditiously.
  1. It may be accepted that some of the allegations to be made in paragraph 82 are somewhat general: for example, that the L7s and L8s have proved to be reliable, on the occasions identified in paragraph 82. That does not mean that the plaintiff cannot plead to them. Moreover, it seems to me that particulars could be sought of the allegations by the plaintiff, which should in due course reduce any difficulty the plaintiff might otherwise experience in dealing with these allegations.
  1. If the contested amendments are permitted, there may be delay, but that is by no means clear. There was no suggestion that time would be available this year to hear the case. It is also not clear that the case could, without the contested amendments, be heard in the first half of 2013.
  1. The plaintiff’s real concern about costs was related to the cost of investigating the matters alleged in the contested amendment, particularly paragraph 82. Those costs would have been incurred had the allegations been made at an earlier stage. In any event, it seems to me that there is scope for making directions to shift at least some of the burden of this expense to the defendants.
  1. It may be accepted that the amendments would result in a longer trial.
  1. It has not been suggested that the case in support of which the amendments are sought to be made is unlikely to be of importance to the defendants. It seems to me that it remains a matter of considerable importance that parties should be allowed to plead and advance a case which they wished to make against another party.
  1. This is not an application to which r 668 applies. Dalton J refused an application which was made before her Honour. The defendants have now made another application for leave to amend their pleading. Her Honour’s order, being interlocutory, is no bar to that application. A grant of leave now would have no effect on the order made by her Honour. It is clear that the circumstances in which the present application is made are quite different from those at the time of the application before her Honour. I do not consider that her Honour’s decision warrants a refusal on discretionary grounds.

Conclusion

  1. On balance, it seems to me that the defendants should be permitted to make the contested amendments. I propose to make an order to that effect.

Footnotes

[1] (2009) 239 CLR 175.

[2] [2011] QSC 411; as well as r 5 of the UCPR.

[3] [1999] QCA 318; per Davies JA at [9], per McMurdo P at [3].  See also Alford v Ebbage [2002] QSC 289 at [20].

Close

Editorial Notes

  • Published Case Name:

    Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd & Anor

  • Shortened Case Name:

    Sandvik Mining and Construction Australia Pty Ltd v Dempsey Australia Pty Ltd

  • MNC:

    [2012] QSC 308

  • Court:

    QSC

  • Judge(s):

    P Lyons J

  • Date:

    12 Oct 2012

Litigation History

No Litigation History

Appeal Status

No Status