Frederick W Nielsen (Canberra) Pty Limited v Pdc Constructions (ACT) Pty Limited and National Capital Development Commission [1987] ACTSC 68 (2 October 1987)

SUPREME COURT OF THE ACT

FREDERICK W. NIELSEN (CANBERRA) PTY. LIMITED v. P.D.C. CONSTRUCTIONS (A.C.T.)
PTY. LIMITED AND NATIONAL CAPITAL DEVELOPMENT COMMISSION
S.C. No. 1652 of 1983
Appeal - Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles C.J.(1)

CATCHWORDS

Appeal - against decision of Registrar - no new matter of principle.

Practice and Procedure - application to strike out parts of Statement of Claim - part of claim found to be embarrassing - Rules of the Supreme Court of the Australian Capital Territory, Order 23 Rule 28 - no new matter of principle.

HEARING

CANBERRA
2:10:1987

ORDER

Paragraph 6(f) of the further amended statement of claim be struck out.

The plaintiff have leave to file a second further amended statement of claim within seven days.

DECISION

This is an appeal by the first defendant against a decision of the Registrar on 10 August 1987 dismissing an application to strike out paragraphs 4 to 8 inclusive of the further amended statement of claim of 17 August 1987 (referred to herein as the "statement of claim"). The grounds of the application are that these paragraphs:

"(a) may tend to prejudice, embarrass or delay

the fair trial of the action; and
(b) disclose no reasonable cause of action."

2. By paragraph 2 of the statement of claim, it is alleged that by an agreement in writing ("the sub-contract") dated 14 November 1987 (probably meaning 1977) the plaintiff agreed to supply for remuneration mechanical services to the first defendant who was then engaged in the construction of the High Court building.

3. Paragraph 3 of the statement of claim alleges that a company, referred to in the contract as the superintendent, was to act as the servant or agent of the first defendant pursuant to the terms of the sub-contract. The allegations in the statement of claim made against the second defendant, who is not a party to the present application, are irrelevant for the purposes of this application.

4. Paragraphs 4 to 8 of the statement of claim are in the following terms:

"4. It was an express term and condition of
the subcontract that in the event that
the superintendent directed a deviation
from the construction program provided by
the first defendant to the plaintiff
which deviation affected the works, the
plaintiff would be entitled to such extra
cost resulting from the deviation as was
equitable having regard to the extra cost
(if any) allowed to the first defendant
in respect of such deviations by the
second defendant.
5. It was a term and condition of the
subcontract
that the construction program
would commence on the 31st day of January
1976, that 145 calendar weeks would be
required for the construction program and
that the construction program would be
completed on or about the 24th day of
November 1978.
6. The superintendent directed deviations
from the construction program.

Particulars of Deviations

(a) The superintendent directed the
deferral
and/or slowing down of the
construction program so that work
could not be commenced by the
plaintiff on the date referred to in
paragraph 5 nor completed in
accordance with the date referred to
paragraph 5 above.
(b) The superintendent approved and
directed work in relation to the
construction of the High Court
building which constituted
variations to the works which
brought about further deviations
from the construction program.
(c) The superintendent directed an
acceleration of the construction
program.
(d) The superintendent required the
plaintiff to perform work pursuant
to the subcontract in a different
manner and in a different order from
the manner and order set forth in
the subcontract, thereby causing a
deviation from the construction
program.
(e) The superintendent required the work
of the plaintiff to be performed in
a manner and at times which resulted
in increased costs to the plaintiff.
(f) The superintendent declined to
permit
the plaintiff to commence the
work the subject of the subcontract
in accordance with the Third
Schedule thereof and refused to
permit the plaintiff to complete the
work, the subject of the subcontract
in accordance with the Third
Schedule thereof.
(g) The superintendent approved and
required variation to the work and
deviations from the subcontract to a
nett value of $563,025.67.
7. The plaintiff performed all works
required and performed all further works
in accordance with the directions of the
superintendent but the first defendant
has refused and/or failed to pay the
plaintiff the extra costs resulting from
the deviations from the construction
program as were equitable in breach of
the express term and condition of the
subcontract set out in paragraph 4.
8. The plaintiff claims the sum of
$618,569.43 for breach of terms 4. and
5. of the subcontract."

5. It is conceded on behalf of the plaintiff that the references to terms 4 and 5 of the sub-contract appearing in paragraph 8 of the statement of claim are erroneous and counsel indicated that the plaintiff would wish to further amend paragraph 8 to refer simply to "breach of the said terms of the said sub-contract". It is common ground between the parties that the allegation in paragraph 4 of the statement of claim is founded on clause 28(b) of the sub-contract. That sub-clause provides as follows:

28(b) Where in pursuance of a provision in the
Head Contract the Contractor has supplied
to the Superintendent a construction
programme showing the dates by which or
the times within which the various parts
of the works (including the Works the
subject of this Contract) are to be
completed or executed and the
Superintendent directs a deviation from
such construction programme which said
deviation affects the Works the
Sub-Contractor shall be entitled to such
extra cost resulting from the deviation
as is equitable having regard to the
extra cost (if any) allowed to the
Contractor in respect of such deviation
under the provisions of the Head
Contract."

6. In my view, the substance of the allegations in paragraphs 4 to 8 of the statement of claim may be expressed in three sentences. First, it was an express term of the sub-contract that the plaintiff was entitled to extra cost resulting from deviation directed by the superintendent, such extra cost to be determined by assessing what was equitable having regard to the extra cost (if any) allowed to the first defendant by the second defendant in respect of such deviations. Secondly, the superintendent directed deviations. Thirdly, that in discharging its duty under the sub-contract the plaintiff has incurred further cost resulting from the deviation and is entitled to $618,569.43 from the first defendant.

7. There are no allegations whereby the first defendant can ascertain how the sum claimed is calculated. This however is not fatal to the statement of claim as a pleading. The contract does not provide that extra cost is recoverable by the plaintiff only if extra cost is allowed to the first defendant by the second defendant in respect of deviations directed by the superintendent. On the contrary it provides, or it is arguable that it provides, that what is recoverable is such extra cost as is equitable having regard to the extra cost, if any (my emphasis), allowed to the first defendant by the second defendant. Hence, it may not be necessary for the plaintiff to show that extra cost has in fact been allowed to the first defendant by the second defendant. It is at least arguable that even if no extra cost in respect of the deviation is allowed to the first defendant by the second defendant that the plaintiff is nevertheless entitled as against the first defendant to extra cost resulting from the deviation as is equitable in the circumstances.

8. Counsel for the first defendant was concerned to argue that paragraph 6(f) of the statement of claim sought to enlarge the cause of action by relying on some alleged loss to the plaintiff brought about by the superintendent's declining to permit the plaintiff to commence and complete the work in accordance with the contract, but counsel for the plaintiff resiled from any such claim and conceded that paragraph 6(f) was superfluous. Strictly as a matter of pleading, the defendant is not required to plead to paragraph 6(f) because it is merely a statement of particulars. Nevertheless, whilst it remains an allegation of which the defendant has notice, it adds unnecessary confusion and in that sense is embarrassing. In my view it would be better removed from the statement of claim.

9. The present application is brought pursuant to Order 23 Rule 28 of the Rules of Court which provides that the Court or a Judge may at any stage of the proceedings order to be struck out or amended any matter in any endorsement or pleading which is unnecessary or scandalous, or may tend to prejudice, embarrass or delay the fair trial of the action. In my view paragraph 6(f) is embarrassing in that it tends to raise a false issue. It is conceded to be unnecessary. The provisions of the rule may be contrasted with similar provisions in other jurisdictions where it is necessary to show that the pleading is bad or that its effect will be harmful. The rule in this Court is much wider. I order that paragraph 6(f) be struck out.

10. The plaintiff concedes that paragraph 8 needs amendment as I have already indicated and I further order that the plaintiff have leave to file a second further amended statement of claim. I direct that the second further amended statement of claim be filed within seven days.

11. This is an old matter which is taking a long time to get to trial. I propose to give further directions as to its disposition. I will hear the parties on further directions and on the costs of this application.