Sunwater Limited v Drake Coal Pty Ltd
[2015] QSC 320
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- Unreported Judgment
- Appeal Determined (QCA)
- Sunwater Limited v Drake Coal Pty Ltd[2015] QSC 320
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Sunwater Limited v Drake Coal Pty Ltd[2015] QSC 320
Sunwater Limited v Drake Coal Pty Ltd[2015] QSC 320
CITATION: | Sunwater Limited v Drake Coal Pty Ltd and Anor [2015] QSC 320 |
PARTIES: | SUNWATER LIMITED (ACN 131 034 985) (Plaintiff) v DRAKE COAL PTY LTD (ACN 138 221 600) (First Defendant) (Second Defendant) |
FILE NO/S: | Brisbane No 6430 of 2015 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
ORIGINATING COURT: | Supreme Court of Queensland at Brisbane |
DELIVERED ON: | 12 November 2015 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 October 2015 |
JUDGE: | Boddice J |
ORDER: |
|
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND - PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – OTHER MATTERS – where the plaintiff submitted that certain matters pleaded in the defendants’ proposed amended defence and counterclaim were not capable of giving rise to any legally recognised ground of defence to the plaintiff’s claims – where the plaintiffs made a strike-out application in respect of the paragraphs containing those matters – whether the plaintiffs’ application should be granted Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635 |
COUNSEL: | A Pomerenke QC with L Clark for the plaintiff R A Holt QC with J Chapple for the defendants |
SOLICITORS: | Thomson Geer for the plaintiff Holding Redlich for the defendants |
[1] The plaintiff and the defendants each brought applications seeking orders in respect of the pleadings in this proceeding. By consent, they have resolved all but one aspect of those applications. That aspect relates to the plaintiff’s contention that matters pleaded in paragraphs 48(k)(vi)-(xi), 61(k)(vi)-(xi) and 68(o)(vi)-(xi) of the defendants’ proposed amended defence and counterclaim are allegations not capable, in law or fact, of giving rise to any legally recognised ground of defence to the plaintiff’s claims. At issue is whether those paragraphs are properly the subject of a strike-out application.
Background
[2] The proceeding arises out of contractual arrangements between the plaintiff, the defendants and other entities. The parties agree that those other entities are properly to be joined, on the application of the defendants, as plaintiffs on the counterclaim relied upon by the defendants.
[3] Relevantly, the contractual arrangements concerned three agreements made in September 2011. Two of the agreements were entered into between the plaintiff and the first defendant. Each concerned a proposed water pipeline. The first related to what is known as the main line. The second related to a proposed spur running off the main line. The third agreement, with Byerwen Coal Pty Ltd, also concerned the main line.
[2] The three agreements were ultimately terminated. There is a dispute as to who terminated the agreements, and as to the entitlement to terminate those agreements. By the time of the termination, the plaintiff had undertaken work on the pipelines. It is the plaintiff’s case that that work was undertaken pursuant to the agreements with the first defendant or, alternatively, at the first defendant’s request. The alternate claim is for reasonable remuneration for work done at that request. There is also a claim against Byerwen Coal Pty Ltd for reasonable remuneration for work done at its request.
[5] The paragraphs of the proposed amended defence and counterclaim in contention are pleaded in response to the plaintiff’s claims for reasonable remuneration for work done at the first defendant’s request. Relevantly, the first defendant denies the work performed by the plaintiff was for its benefit, that it accepted any benefit of the work, that the costs claimed are fair or reasonable or that the plaintiff is entitled to recover on a quantum meruit basis or by way of restitution.
[6] The defendants’ plea that the plaintiff is not entitled to seek restitution is based on the plaintiff’s conduct. That conduct, in essence, amounts to an allegation that the plaintiff continued to incur costs and expenses and extend relevant dates in the contract when it knew it could not supply water to the first defendant’s mine. The pleaded facts include matters said to have occurred long after the plaintiff had completed the work done at the defendants’ request.
[7] The offending paragraphs are in similar terms. Using paragraph 48(k) as an example, they plead:
“… SunWater is not entitled to seek any restitution due to its conduct in:
…
and by:
(vi)on or about 27 February 2013, advising the defendants that an option for the supply of water to Byerwen and/or Drake was for SunWater to acquire an existing water allocation from RATCH-Australia Collingsville Pty Ltd and RATCH-Australia Collinsville B.V (‘jointly referred to in this defence as ‘RATCH’) which would be sufficient to meet its water supply requirements from the Eungella Dam and on sell that allocation to Drake and/or Byerwen;
(vii)knowing that RATCH had offered to sell its existing water allocation back to SunWater;
(viii)on or about 27 February 2013, advising the defendants that it would seek approval and funding from the SunWater Board and Shareholding Ministers to purchase the RATCH water allocation and transfer it to Drake and/or Byerwen;
(ix)on or about 27 March 2013, advising the defendants that:
(A)it could not obtain SunWater Board approval or the Shareholding Minister’s consent to fund the purchase of the RATCH water allocation;
(B)RATCH had confirmed it would deal directly with Drake and/or Byerwen in relation to the acquisition of the water allocation;
(C)Drake should contact RATCH to investigate whether it could acquire the water allocation from RATCH directly;
(xi)RATCH requiring SunWater’s consent to the assignment of RATCH’s water allocation to Drake and/or Byerwen under clause 15(ii) of the Water Supply Agreement between RATCH and SunWater dated 17 January 1996 as amended on 17 June 2005;
(xi)In or about March 2015, following termination of the Drake Spur Agreement and the Drake Main line Agreement, refusing to consent to the assignment of the Water Supply Agreement to facilitate the transfer of RATCH’s water allocation to QCoal (as agent for Drake) in the circumstances more fully set out in paragraphs 1-18 of the Counterclaim.”
Plaintiff’s submissions
[8] The plaintiff submits that the relevant allegations do not invoke any recognised defence to a restitutionary claim. The plaintiff’s claim falls within the long-established and well-recognised category of cases constituted by claims for work and labour done at the request of another. An assessment of the plaintiff’s conduct is, in those circumstances, neither necessary nor appropriate.[1]
[9] In order for the defendants to be able to rely upon these allegations, they must identify the legal principle or circumstances recognised by law as affording that defence. There must be circumstances which the law recognises would make an order for restitution unjust.[2] Equitable notions do not invite a balancing of competing equities based on considerations such as fault. The question is whether it would be inequitable in all of the circumstances to require restitution.[3]
[10] The plaintiff submits that as a matter of fact, the defendants’ allegations are irrelevant. They concern a different contract, to which the defendants were not a party, which did not give the defendants any right to damages or monetary relief, and which have no temporal or logical connection with the plaintiff’s claims. Further, the plaintiff’s alleged conduct concerns events which occurred as much as four years after the request for the work to be undertaken by the plaintiff, and the plaintiff commencing that work.
Defendants’ submissions
[11] The defendants submit there is no basis for the exercise of a power to summarily strike-out the allegations. The defendants’ pleaded claims involve complex issues of fact and law and should be allowed to run the usual Court process.[4] The caution to be exercised, when considering summary intervention of the Court,[5] is particularly apt in areas where the law is uncertain or in a state of development.[6]
[12] The defendants submit it is relevant to have regard to the contents of the whole of paragraphs 48, 61 and 68 of the pleading, only parts of which are sought to be struck out. The paragraphs respond to a claim by the plaintiff that it carried out specified work for and at the request of the first defendant and Byerwen Coal Pty Ltd, and that each are liable to pay the plaintiff restitution in the pleaded amounts.
[13] The defendants submit the offending paragraphs contain alternate defences in two parts. The first part pleads that the plaintiff is not entitled to restitutionary relief because it continued to incur costs when it knew at the time that the purpose for carrying out the activities could not be achieved. The defendants contend they could not be enriched in circumstances where the work performed by the plaintiff could not bestow a benefit upon them. The conduct of the plaintiff, proceeding with that knowledge, is a relevant consideration to that plea.[7]
[14] The second part of the claim pleads conduct by the plaintiff which it is submitted disentitles it to restitutionary relief. This pleaded conduct meant that no benefit was bestowed on the defendants in respect of the services performed by the plaintiff, as a consequence of the plaintiff’s unreasonable behaviour subsequent to the performance of that work. Those pleas are relevant to whether there is an injustice in the retention of the benefit.[8] That is a matter of substance, not a mere legal technicality.[9]
Discussion
[15] The defendants rely on the pleaded conduct to assert it would be unjust to make an order for restitution. Whilst such a contention does not invite a balancing of competing equities, it does raise whether it would be inequitable in all the circumstances to require the defendants to make restitution.[10] In an appropriate case, the circumstances could include conduct subsequent to completion of the work the subject of a claim for restitution.
[16] A perusal of the contents of paragraphs 48(k), 61(k) and 68(o) supports the defendants’ contention that the allegations the subject of the strike-out application are not separate and distinct. They are in addition to the other matters pleaded in each of those paragraphs. None of those other matters are the subject of the strike-out application.
[17] As those allegations are said to be related, they form part all of the circumstances to be considered in determining whether it would be unequitable to require the defendants to make restitution. They cannot therefore be said to be irrelevant to the defendants’ plea, unless the plaintiff is correct that the matters there pleaded are irrelevant in law to the determination of its claim.
[18] On a strict reading of the judgment of the High Court in Lumbers,[11] none of the matters the subject of the strike-out application are relevant to the plaintiff’s claim to recover sums expended for work and labour undertaken at the request of the defendants. However, there is substance in the defendants’ submission that the Court in Lumbers was considering the relevant factors for establishing a claim by the person undertaking that work. The Court was not considering the factors relevant to establishing a defence to such a claim.
[19] Striking out deprives a party on a summary basis of the opportunity to advance contentions in the applicable Court proceeding. The power to strike-out is therefore to be exercised with caution. Particular caution is to be exercised where the issues in dispute involve complex issues of fact and law. In such circumstances, it is appropriate, in the exercise of the Court’s discretion, to allow the proceedings to run the usual course.
[20] The need for caution was reiterated in Batistatos v The Roads and Traffic Authority (NSW)[12] where Gleeson CJ, Gummow, Hayne and Crennan JJ repeated the observations of Gauldron, McHugh, Gummow and Hayne JJ in Agar v Hyde:[13]
“Ordinarily, a party is not to be denied the opportunity to place his or her case before the Court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”
Whilst those observations were in respect of the power to order summary or final judgment, they are apposite to the exercise of the power to strike out pleaded allegations sought to be relied upon to support a defence to a claim.
[21] A consideration of the pleadings and of the authorities referred to by the plaintiff do not satisfy me that the facts and/or law are so clear that it is appropriate to strike out the allegations the subject of this application. Whilst the plaintiff may ultimately succeed at trial, there is not a sufficiently high degree of certainty about the ultimate outcome of the proceeding, if it were allowed to go to trial, to justify striking out any of the allegations.
[22] I decline, in the exercise of my discretion, to strike out the allegations in paragraphs 48(k)(vi)-(xi), 61(k)(vi)-(xi) and 68(o)(vi)-(xi) of the proposed amended defence and counterclaim.
Conclusions
[23] The application is dismissed. I shall hear the parties as to costs.
Footnotes
[1] Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635 at [88]-[90].
[2] Australia and New Zealand Banking Group Pty Ltd v Westpac Banking Group (1988) 164 CLR 662 at 673.
[3] Australian Financial Services Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [69].
[4] Spencer v The Commonwealth (2010) 241 CLR 118 at [26].
[5] See General Steel Industries Inc v Commonwealth Railways (NSW) (1964) 112 CLR 125 at 130.
[6] Project Company No 2 Pty Ltd v Cushway Blackford & Associates (2011) QCA 102 at [27].
[7] Ford v Perpetual Trustees Victoria Limited (2009) NSWCA 186 at [130].
[8] Ford at [121].
[9] Ford at [123], [126].
[10] Australian Financial Services Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560.
[11] Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635.
[12] (2006) 226 CLR 256 at 257, [46].
[13] (2000) 201 CLR 552 at 575-576, [57].