Abbhall Pty Ltd v Canberra Land Developments Pty Ltd [2009] ACTSC 120 (18 September 2009)

Last Updated: 26 October 2009

ABBHALL PTY LTD v CANBERRA LAND DEVELOPMENTS PTY LTD
[2009] ACTSC 120 (18 September 2009)

PRACTICE AND PROCEDURE – amendment to statement of claim – application allowed in part – leave to add new cause of action refused

Court Procedures Rules 2006, r 21, r 501, r 502, r 6700
Agents Act 1968
Agents Act 2003
Agents Regulations 2003

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27

No. SC 217 of 2007

Judge: Master Harper
Supreme Court of the ACT
Date: 18 September 2009

IN THE SUPREME COURT OF THE )
) No. SC 217 of 2007
AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ABBHALL PTY LTD ACN 089 794 490

Plaintiff

AND: CANBERRA LAND DEVELOPMENTS PTY LTD

ACN 103 875 823

Defendant

ORDER

Judge: Master Harper
Date: 18 September 2009
Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff have leave to amend the statement of claim further, consistently with the draft forwarded to the defendant’s solicitors on 3 April 2009.
2. The plaintiff pay the defendant’s costs of and occasioned by the amendment.

1. The hearing of this action was listed before me to commence on Monday 14 September 2009 with an estimate of three days. On Wednesday 9 September, the solicitors for the plaintiff filed an application returnable the following day, seeking orders that the hearing date be vacated and that the plaintiff have leave to file an amended statement of claim. The application sought a further order that the evidence of a named witness, Malcolm Weston, be taken on Tuesday 15 September at his home in a northern suburb of Melbourne.
2. The hearing of the application proceeded on the morning of Thursday 10 September. Counsel for the defendant did not oppose the application being heard at short notice, and I made appropriate formal orders in that regard.
3. The evidence in support of the application was contained in an affidavit affirmed on 9 September by Ms Allyson Hine, a solicitor employed by Bradley Allen. She deposed that until 4 May 2009 she had been employed by Wood Fussell, the solicitors who had acted for the plaintiff since the proceedings were commenced in March 2007, where she had had the conduct of the matter. She said that the previous day she had been asked to attend a conference with senior counsel for the plaintiff and a director of the plaintiff company, Mr Abbey. She was informed that Mr Abbey had terminated Wood Fussell’s instructions “because they’ve done nothing since you left”. She had agreed to take over the conduct of the matter within her new firm. She had been able, by the time she affirmed her affidavit, to look at portions of Wood Fussell’s file but had not obtained all of its extensive contents. She deposed that it was apparent from the file that the matter had not been adequately prepared for trial, and that little had been done since she had left the previous firm four months earlier. There was no explanation readily apparent from the file for the lack of preparation.
4. Ms Hine deposed that a number of steps needed to be taken before the plaintiff would be ready for trial. These included the execution, filing and service of affidavits in reply to the defendant’s affidavits (these had been drafted and could be served without much delay); inspection and consideration of the defendant’s supplementary discoverable documents; and further amendments to the statement of claim. She acknowledged that the plaintiff would have to pay the costs occasioned by the vacation of the hearing date as well as the costs of the application.
5. A deputy registrar made orders by consent in June 2008 that the evidence in chief was to be in affidavit form and setting a timetable for steps to be taken by the parties, which included filing and service of the affidavits on which they intended to rely. The general rule about the giving of evidence is to be found in rule 6700 of the Court Procedures Rules 2006. The general rule is that evidence at the trial of a proceeding started by originating claim must be given orally in open court: r 6700(1). Evidence in a proceeding started by originating application must be given by affidavit: r 6700(2). The present application was properly commenced by originating claim.
6. Rule 6701 permits an exception to the general rule: the parties may agree that the evidence is to be given by affidavit. The agreement must be made before the proceeding is set down for trial, and the parties must tell the Court about it.
7. The reason for the different rules about proceedings commenced by originating claim and originating application is apparent from the distinction between those proceedings. The fundamental distinction is that an originating application is appropriate where the only or main issue is an issue of law and a substantial dispute of fact is unlikely: r 35. Where there is a significant dispute on the facts it is appropriate to commence by originating claim, with evidence being given orally.
8. Notwithstanding an agreement between the parties under rule 6701 that evidence be given by affidavit, the Court may order that the evidence be given orally. This is generally more satisfactory to the Court where there are issues as to credibility and reliability of memory. The giving of evidence in chief by affidavit deprives the Court of the opportunity to observe witnesses giving that evidence without the benefit of leading questions. Whilst there is much to be said in a commercial cause for the exchange of proofs of evidence of witnesses, or at least brief statements setting out the substance of the evidence each witness is expected to give, it should not be assumed that the Court will always permit the adducing of evidence in chief by affidavit where credibility and reliability are in issue.
9. The statement of claim accompanying the originating claim was expressed cryptically, as a liquidated demand for $271,837.50 plus interest and costs, based on the common money counts of work done and money found to be owing on accounts stated. After a requirement by the defendant that the plaintiff plead the facts on which it relied, an amended statement of claim was filed in May 2007. The assertions of fact were that in April 2003 the plaintiff and defendant entered a written agreement in which the defendant appointed the plaintiff as exclusive marketing agent for a suburban development in Canberra, “on a ninety-day renewable basis subject to performance management.” It was asserted that the defendant undertook to pay the plaintiff an “introduction fee” of $50,000.00 on settlement of the defendant’s purchase of the estate, 1.5% plus GST commission on the gross sale price of each block, a release of $500.00 on exchange of contracts for each block, an incentive bonus of $100,000.00 plus GST if the plaintiff sold one hundred blocks by 6 June 2003, and “a bonus of 10% of amounts above the agreed sales budget.” The agreement was said to be contained in a letter dated 23 April 2003 signed by both parties. The statement of claim then asserted that the plaintiff between the date of the agreement and April 2006 marketed the estate to potential purchasers and that several blocks of land were sold. The defendant renewed the agreement on each ninety-day anniversary by conduct. On 27 April 2006 the plaintiff issued an invoice to the defendant for commission in respect of sales in the amount claimed. The defendant refused or failed to pay the amount claimed.
10. The defendant filed a defence, effectively asserting that the agreement came to an end at the second ninety-day anniversary in October 2003, and that the defendant did not deal with the plaintiff after that. The termination is said to have been by letter of 23 October 2003. The defendant was accordingly not liable in respect of sales after the termination of the agreement.
11. With the defendant’s agreement, the plaintiff amended the statement of claim in August 2008. These amendments did not change the cause of action, and seem to have been directly principally to changes to details of the sales relied on as giving rise to the claims for commission.
12. In October 2008 the defendant, by leave, filed an amended defence which included a counterclaim. The amended defence added statutory defences based on the Agents Act 1968 and the Agents Act 2003. In essence the defence was that the plaintiff, in breach of the legislation, agreed to split its commission with another entity which was not a licensed agent. This was an illegality disentitling the plaintiff to recover any commission. Further, the plaintiff failed to comply with certain obligations under the Agents Regulations, to give the defendant estimated figures of rebates, discounts, commissions or expenses which might become payable to the plaintiff.
13. The counterclaim, in summary, asserted that the defendant had overpaid the plaintiff commissions of $100,650.00.
14. In December 2008 the plaintiff filed a lengthy reply and defence to the counterclaim.
15. In February 2009, the plaintiff’s solicitors prepared a minute of consent orders setting out a timetable for supplementary discovery and interrogatories, including a consent order that the need for a listing hearing be dispensed with and that the parties be granted liberty to approach the list clerk to obtain a hearing date. It appears that they did so shortly afterwards, and that the hearing date 14 September 2009 was set down. The matter was removed from the Deputy Registrar’s directions list and lost the benefit of further supervision by the Court until last month.
16. In mid-April the plaintiff’s solicitors raised with the defendant’s solicitors the likelihood that they might wish to amend the statement of claim again. On 30 April, they sent a draft second further amended statement of claim for consideration. The document had been settled by junior counsel. It was at the beginning of the following week that Ms Hine left Wood Fussell. The document was not filed, nor was any formal application made for leave to file it. Nevertheless it can reasonably be said that the defendant’s solicitors were aware of its contents from the beginning of May 2009.
17. In that document, the plaintiff asserted that the agency agreement between the parties was partly express and partly implied. To the extent that it was express, it was partly in writing and partly oral. The writing was the previously identified letter of 23 April 2003. This was supplemented by a telephone conversation between Mr Abbey on behalf of the plaintiff and a Mr Malcolm Weston on behalf of the defendant during April 2003. The substance of the conversation is not set out in the pleading but reference is made to paragraphs in affidavits by Mr Abbey and Mr Weston which had by then been filed. The express terms of the agreement were as previously pleaded. There was an implied term that the defendant would provide the plaintiff with reasonable notice of its intention not to renew the agency agreement.
18. The document then identified the letter of 23 October 2003, which, it asserted, “purported to unilaterally terminate or, in the alternative, unilaterally vary the agency agreement.” The document then asserted that the defendant was not entitled to terminate or vary the agreement. The document pleaded that the letter “evidenced an intention to no longer be bound by, and therefore repudiated, the agency agreement.” It was then said that the plaintiff elected to affirm the agency agreement notwithstanding the repudiation. Consequently the plaintiff was entitled to commission for the sales as claimed.
19. It was then asserted in the document that in July 2003 the plaintiff introduced the Defence Housing Authority to the defendant as a potential purchaser. A number of blocks were sold to the Defence Housing Authority, and the plaintiff was entitled to commission on those sales. Similarly, the plaintiff introduced as a potential purchaser Mr George Haridemos of New Age Living Pty Ltd. The plaintiff was entitled to commission on a number of sales to that company.
20. It also asserted that the plaintiff introduced Kenoss Pty Ltd as a potential purchaser. Kenoss bought a number of blocks, entitling the plaintiff to commission.
21. The draft second further amended statement of claim now sought to be filed is in the same terms as the draft of April 2009 as far as it goes, but adds a further count, described by senior counsel for the plaintiff as a quantum meruit claim. In the paragraph setting that claim out, the pleading asserts that between April 2003 and April 2006 the plaintiff marketed the estate to potential purchasers who bought blocks. The sales of those blocks resulted wholly or partially from the plaintiff’s efforts, and this constituted a benefit accepted and received by the defendant. The plaintiff was therefore entitled to reasonable remuneration for the work done in marketing and selling the blocks. The reasonable remuneration claimed was an amount equal to the amount claimed by way of commission.
22. The final issue dealt with in the application was that of Mr Weston’s evidence. Mr Weston affirmed an affidavit setting out his proposed evidence in chief in July 2008. He gave a Canberra address at that time. He described himself as a self-employed property developer and director of a number of companies. He described a relationship he had with Kenoss Pty Ltd through one of its directors, Mr Brendas. He also deposed to dealings he had had with Mr Abbey and also with Mr Bernie Bryant of BDB Property Consulting Pty Ltd and Mr Richard Drummond of National Commercial Finance Pty Ltd. An affidavit sworn by Mr Drummond in October 2008 has been filed on behalf of the defendant. It is unnecessary for me to go into further detail about the contents of Mr Weston’s affidavit, other than to say that his evidence would be expected to assist the plaintiff’s case. The defendant’s solicitors have required him for cross-examination.
23. In March 2009, Dr Christine Hand, a general practitioner at Ivanhoe in the suburbs of Melbourne, sent a short report, I take it addressed to Ms Hine at Wood Fussell, relating to Mr Weston. Dr Hand said in the report that he had been a patient of her practice regularly since October 2008. He was suffering from “multiple serious, life threatening medical conditions which require close monitoring and ongoing management.” She expressed the opinion that it was “extremely problematic whether he will be fit to undertake travel interstate and attend court in September this year as described to me.” Investigations indicated progression of his illness and the likelihood of significant deterioration.
24. In April 2009, Ms Hine approached the defendant’s solicitors asking for their agreement to a date for the taking of Mr Weston’s evidence being fixed prior to the trial date in September. This was not immediately taken further after Ms Hine left Wood Fussell.
25. In early August 2009 Wood Fussell on behalf of the plaintiff made an application for an order for the issue of a commission for Mr Weston’s examination at his home in Melbourne at the earliest opportunity. This was supported by an affidavit by Ms Blanch, then a solicitor with Wood Fussell. She annexed a copy of Dr Hand’s report and said that she had been informed by Mr Weston that he had been diagnosed in October 2008 with prostate cancer. He had also told her that his condition had deteriorated significantly between March and August. He had told her that he had been informed that he had between two months and eight months to live. He was taking medication including daily morphine and would be unable to travel to Canberra. Ms Blanch had attempted to speak to Dr Hand but had had no success.
26. The application came before Penfold J on 7 August and was put into my list on 11 August. On that date I dealt with a number of objections to Mr Weston’s affidavit but no specific order was made about Mr Weston’s evidence. I indicated that in the circumstances I would if necessary make myself available for travel to Melbourne if his evidence could not be taken in any other way.
27. When the issue was raised again before me on 10 September, I asked senior counsel for the plaintiff to have inquiries made as to whether Mr Weston was capable of travelling to a courtroom in the city of Melbourne equipped with video-conferencing facilities so that his evidence could be taken by video link. Counsel for the defendant was amenable to this idea provided that he had an opportunity to put documents to Mr Weston during the course of the cross-examination. He accepted that this could be done by having his instructing solicitors appoint an agent in Melbourne, and arranging for the agent to have someone at the venue where Mr Weston was to give his evidence to hand him documents as required. Counsel for the defendant accepted that, whilst less satisfactory, such a technique should operate satisfactorily if it became necessary to take Mr Weston’s evidence by telephone, although video link would be more satisfactory. I expressed the view that it was desirable that the cost to the parties and to the Court of having counsel and me travel to Melbourne to take the evidence be avoided if possible.
28. In dealing with the application, I was acutely aware of the fact that the hearing had been listed to commence on the following Monday, 14 September, and that it was highly undesirable that a hearing fixed many months in advance not proceed on the set date. I am, of course, acutely aware of the decision last month of the High Court of Australia in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27, in which the High Court allowed an appeal from the Court of Appeal of this Court based upon factual circumstances with a number of similarities to the present case. In the event I have felt able to distinguish the circumstances for a number of reasons.
29. The first and to my mind the most significant relates to the efficient use of publicly funded court resources and the need to maintain public confidence in the judicial system (see para [27] per French CJ). In Aon, four weeks had been set aside for the trial. On the third day the plaintiff settled with all but one party, and sought an adjournment, foreshadowing an application for leave to amend to allege a substantially different case. The effect of the adjournment was that, as the High Court saw it, nearly four weeks of court sitting time was lost.
30. By contrast, in the present case, the trial had been placed as first case in my list for 14 September, with two personal injuries actions to follow it on that day, and two more personal injuries cases listed for the next day, all with estimates of two or three days. Whilst the present action should probably not have been placed in a personal injury running list, the effect is that court time will not be lost, and parties whose cases might otherwise not have been reached during that week, and who might have had to wait six months for another date, will have the opportunity to have their cases heard.
31. Because the application in this action last Thursday, 10 September, was placed into my list at short notice, I had no time to devote to these reasons immediately. I had another one-day contested company winding-up application in my list, with the parties waiting to get on, and I commenced that matter as soon as I had completed hearing submissions in the present case. The issues raised, and in particular those relating to the proposed amendments to the statement of claim, were not conducive to an ex tempore decision. In the circumstances I took the view that I had little choice but to grant the adjournment, which I did with costs on a solicitor-and-client basis, and to reserve my decision in relation to the application for amendment.
32. Following time for reflection, I have arrived at the view that I should permit the statement of claim to be amended to accord with the draft which was sent to the defendant’s solicitors on 30 April. This includes all of the amendments the plaintiff now seeks to make, with the exception of the introduction of the quantum meruit clause.
33. It seems to me that what the plaintiff is attempting to achieve in the quantum meruit clause is to overcome provisions in the Agents Acts which, the defendant will argue, defeat any claim for commission. The plaintiff is trying to recover precisely the same amount, calculated in the same way (as a commission formula) but characterising the claim as one on a quantum meruit rather than contract. It should be remembered that an action in quantum meruit is based on an implied promise to pay a reasonable sum for work done. The contract asserted by the plaintiff in this case, and the commission basis on which all estate agents customarily charge, has nothing to do with work done. The basis of it is that however much work the agent does, if no sale results the agent is paid nothing. Conversely, however little work the agent does, if his efforts result in a sale, the full commission is payable. What the agent is seeking to do here is not to pursue remuneration for work done, whether on an hourly or some other basis, but to recover the commissions it would be entitled to recover if its contractual claim were successful. This is not a claim in quantum meruit, and to describe it as one cannot save it.
34. Additionally, the fresh cause of action is sought to be introduced after a hearing date was fixed. In this case, for unstated reasons a deputy registrar dispensed with the requirement for completion by the solicitors for the parties of a certificate of readiness. Where parties agree to adopt this course they must be taken to have notionally certified to the Court that the action is ready for trial. Whilst rule 502 gives the Court a discretion to grant leave to a party to amend a document at any stage, it is clear following Aon that the discretion is to be exercised in respect of an amendment to a pleading after certificate of readiness only in the most exceptional of circumstances.
35. The balance of the amendments sought, which I am prepared to allow, seem to me to do no more than to reframe the original claim consistently with the plaintiff’s affidavit material. The defendant has been on notice of the proposal for more than four months, and of the affidavits for longer than that. Those amendments will, as I see it, assist in achieving the purpose of chapter 2 of the Court Procedures Rules 2006 as set out in rule 21, that is, achieving the just resolution of the real issues in the proceedings. Indeed, rule 501 could be argued to require me to order that these amendments be made.
36. I have already made orders about costs in the application. A further order that is needed is that the plaintiff is to pay the defendant’s costs of and occasioned by the further amendment to the statement of claim.

I certify that the preceding 36 (thirty-six) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 18 September 2009

Counsel for the plaintiff: Ms HL Donohoe SC
Solicitors for the plaintiff: Bradley Allen Lawyers
Counsel for the defendant: Mr DJC Mossop
Solicitors for the defendant: Meyer Vandenberg Lawyers
Date of hearing: 10 September 2009
Date of judgment: 18 September 2009