BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd (No.4) [2002] FCA 369 (2 April 2002)

Last Updated: 2 April 2002

FEDERAL COURT OF AUSTRALIA

BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd (No.4)

[2002] FCA 369

BWK ELDERS (AUSTRALIA) PTY LTD (ACN 000 320 794) v WESTGATE WOOL COMPANY PTY LTD (ACN 007 387 902) and PETER JOSEPH ANDERSON and MATT ILMARI KAINE and GRAEME JOHN MOYLE AND BETWEEN WESTGATE WOOL COMPANY PTY LTD and PETER JOSEPH ANDERSON and MATT ILMARI KAINE and GRAEME JOHN MOYLE v BWK ELDERS (AUSTRALIA) PTY LTD

S.105 of 2001

MANSFIELD J

2 APRIL 2002

ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S.105 OF 2001

BETWEEN:	BWK ELDERS (AUSTRALIA) PTY LTD APPLICANT
AND:	WESTGATE WOOL COMPANY PTY LTD FIRST RESPONDENT PETER JOSEPH ANDERSON SECOND RESPONDENT MATT ILMARI KAINE THIRD RESPONDENT GRAEME JOHN MOYLE FOURTH RESPONDENT
AND BETWEEN:	WESTGATE WOOL COMPANY PTY LTD FIRST CROSS-CLAIMANT
	PETER JOSEPH ANDERSON SECOND CROSS-CLAIMANT MATT ILMARI KAINE THIRD CROSS-CLAIMANT GRAEME JOHN MOYLE FOURTH CROSS-CLAIMANT
AND:	BWK ELDERS (AUSTRALIA) PTY LTD CROSS-RESPONDENT

JUDGE:	MANSFIELD J
DATE:	2 APRIL 2002
PLACE:	ADELAIDE

REASONS FOR DECISION

1 The applicant sought leave to amend its Statement of Claim in terms of a document entitled "Further Amended Statement of Claim" filed on 8 March 2002 (the Statement of Claim). I gave that leave on 15 March 2002. At the request of the respondents, I now publish reasons for that decision.

2 The matter has a considerable history. Both that history, and the nature of the applicant's claim, is referred to in previous judgments: BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors [2001] FCA 1110; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors [2001] FCA 1844; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors (No.2) [2002] FCA 87; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors (No.3) [2002] FCA 88. It is evident that the applicant's claim, although in substance easy to understand, in detail is very complex. That is reflected in the particularity contained in the Statement of Claim and the schedules attached to it. This is the third version of a Statement of Claim, but the essential allegations have not altered. What has altered or been added previously are details concerning particular transactions for the sale of wool. In my view, the amendments effected by the Statement of Claim similarly fall into those categories.

3 In considering whether to grant the leave sought, I have been guided by the principles recently reinforced by the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 per Dawson, Gaudron and McHugh JJ at 154-155. Senior counsel for the respondent particularly referred me to the observations of Kirby J at 170 identifying, among the considerations which tend to argue against the grant of an indulgence to permit a pleading to be amended, the failure of a party to offer an explanation for the application or its timing. I did not require the applicant to seek leave to amend their Statement of Claim by issuing a fresh notice of motion for that purpose. It seemed to me appropriate, in the circumstances but particularly having regard to the desirability of the pleadings issues being resolved as soon as practicable, that I should entertain the application made at a directions hearing without that formality provided it could be entertained without prejudice to the respondents. Consequently, filing and service of an affidavit in support of the application was a matter for the applicant. No affidavit specifically explaining the amendments effected by the Statement of Claim, or its timing, was presented. However, the proposed amendments are essentially to matters of detail. In my view, they do not alter in any significant way the thrust of the applicant's claim as it has been maintained throughout. In adopting that course, I fixed a timetable which would ensure that the respondents had an opportunity to consider and address the Amended Statement of Claim as proposed and to respond to it, including any objections which they made to it.

4 As I have said, I consider that the amendments effected by the Statement of Claim are directed in part simply to correcting or amending certain particulars that (I infer) the applicant, as a result of further investigation, considered required correction, and are directed in part to expressing in a slightly different way or in a slightly fuller way the nature of the applicant's claims against the respondents. Although there is no affidavit in support of the application, the nature of the application and the particular terms of the amendments enable me to reach that view without affidavit evidence. There has been no undue delay on the part of the applicant in seeking the amendments. Indeed, I suspect that the need for them is largely a consequence of addressing requests for particulars from time to time received from the respondents: cp Australian Competition & Consumer Commission v Pacific Dunlop Limited [2001] FCA 740.

5 I shall deal with the respondents' objections to the Statement of Claim generally in the sequence they appear in the written objections.

6 The objections are largely common to each of the six purchases of wool separately alleged in the Statement of Claim. The allegations to which objection is taken, in essence, are parallel in relation to each of those purchases of wool. Each of the purchases of wool alleged in turn involved a number of transactions on different dates, which themselves are specified in the Statement of Claim and in schedules to it. The consideration of the respondents' objections can be addressed largely by reference to one of the purchases, as was done by senior counsel for the respondents in oral submissions. I will not refer separately to the clauses of the Statement of Claim which parallel the first alleged series of transactions concerning the Parkes wool, except where necessary.

7 The Statement of Claim now alleges that instead of the contract of purchase being an oral contract only, it is a contract partly oral and partly in writing (the amendment to cl 12.1). There are then express terms, and alternatively implied terms, alleged in each of the contracts that the wool agreed to be sold had a particular derivation, category, weight, and characteristics (new cl 12AA). It is then alleged by new cl 12B that:

"12B.1 Insofar as the terms of the contract were in writing, they were comprised in the Parkes wool statements and in the AWTA certificates.

12B.2 Insofar as the terms were oral they comprised the oral agreement made between Hullick on behalf of the applicant and the second, third or fourth respondents (the applicant cannot presently be more particular) on behalf of the first respondent as to the price to be paid for the Parkes wool."

In respect of the other five transactions, the oral agreement referred to in the analogues of cl 12B.2 in some instances refers to Hullick or other named persons, or in one instance to Hullick or another person whose identity is not at the time able to be given.

8 There are also new clauses numbered 14AA and 14AAA. Clause 14AA alleges that each of the brand property names and the identification numbers or letters against each of the wool lots was fictitious, was placed on the bales at the premises of the first respondent and not on a property bearing the name allocated to it, and was placed on the bales by one or other of the second, third or fourth respondents, or at their direction. It also alleges that such information:

"... was inserted upon the AWTA Core Test Request by an employee or agent of the first respondent (the applicant cannot presently be more particular)."

Clause 14AAA alleges further, or in the alternative, in breach of the Parkes contracts the first respondent did not deliver to the applicant wool which came from a property as identified, or which was of the particular category, weight or characteristics identified. The particulars of those breaches are said to be provided in pars 14.1-14.6 and par 14AA of the Statement of Claim.

9 The first objection is that the applicant has not justified why it now wishes to allege that the contracts were "partly oral and partly in writing" in par 12.1 and corresponding paragraphs of the Statement of Claim. In fact, as the particulars indicate, the documents which are said to constitute the written component of the contracts in each case were previously referred to in earlier versions of the Statement of Claim. All that the applicant has done has been to recognise that those documents are or may be part of the contract. I regard that as a minor change. It does not produce injustice to the respondents. It is not one which requires explanation by affidavit. The respondent has not asserted any injustice in respect of any of the proposed amendments to the Statement of Claim with one exception referred to below.

10 The injustice then alleged, however, was simply that the respondents did not have to confront a claim in terms in which it could not be made out, and so would not have the benefit, at the hearing, of having an advantageous decision on a small aspect of the case. It is hard to believe that that is put forward seriously as a ground of prejudice. The applicants, in the light of further consideration of the material before them, appear to have accepted that the claim as then expressed was not sustainable, but that it was sustainable by reference to different but not materially different facts. The other aspect of the "prejudice" was that the respondents would then succeed on that limited issue inevitably and recover costs at least of that limited issue. I propose to reserve the costs of this application, and to the extent to which the respondents are entitled to costs, by reason of the withdrawal or amendment of those claims, I will address it. It is a ridiculous proposition to say that the case which an applicant no longer wishes to express precisely in a way previously expressed should be obliged to go forward so that it can be lost and the costs at a much larger level secured.

11 The second ground of objection was that the allegation that the contract terms are "express, or in the alternative, ... implied" (par 12A and corresponding paragraphs) does not include particulars of the circumstances in which the implication might arise, nor does it contain precisely the words of the conversations alleged to comprise the actual terms. It is not correct that the circumstances by which the implication might arise are not pleaded, although senior counsel for the applicants acknowledged that the "linking fact" may not have been explicitly asserted. Paragraphs 8 and 10 of the Statement of Claim plead the facts by which the implication might arise. Senior counsel for the applicants has now identified that it is alleged by the applicants that by reason of the facts in those paragraphs, the terms alleged are said to be implied. There can be no misunderstanding on the part of the respondents. In my view a reading of the Statement of Claim would have made apparent that which has now been made explicit. To avoid any risk of injustice to the respondents, however, I formally record that acknowledgment in these reasons for decision. But for the request on the part of the respondents for reasons for my decision, I would have required the applicant to confirm that explicit assurance by correspondence, to fortify that which had been said in the course of submissions.

12 The other aspect of this complaint is that pars 12B.1 and 12B.2 and corresponding paragraphs are "embarrassing" because they are introduced by the word "Insofar", so that the respondents do not know which of the terms proposed to be alleged are in writing and which are oral. In my view that represents a misreading of the Statement of Claim. The relevant oral term is that as to the price to be paid: see par 12.1 and par 89 in the first column to Schedule A therein of the Statement of Claim.

13 Further, I do not consider that it is necessary to the respondents having a fair trial that the precise conversations alleged to constitute the agreement as to the price be specified. It is apparent that there is no real issue as to the price to be paid for that which was agreed to be purchased. The real issue is as to what was agreed to be purchased, and whether that which was supplied met the description of that agreed to be sold and purchased. It is part of that submission that par 12B.2 and corresponding paragraphs is "embarrassing" because it alleges "what is apparently a further, wholly oral agreement, as to, `the price to be paid for the ... wool'". In my view that also represents a misreading of the Statement of Claim. It does not allege a separate and further agreement, but alleges a term of the agreement relating to the price, in a way which enables the respondents to know how it is alleged that the price came to be agreed. There is nothing embarrassing about that allegation. Senior counsel for the respondents noted in the course of submissions that the corresponding paragraphs to par 12B.2 were expressed in slightly different terms in relation to the several wool purchase contracts. Thus, par 68B.2 is in the same terms, but pars 27B.2, 42B.2, 57B.2 and 80B.2 refer to the person named in par 12B.2 plus another named person or persons and in one case that person or another employee of the applicant who is not identified. Having pointed out the variation in those terms, however, senior counsel did not then suggest that those variations caused any embarrassment to the respondents in knowing the case they had to meet, and the variations in my view simply reflect the applicant's allegations as to the slightly different ways in which the several contracts came to be made. They reinforce the point that there is no further wholly oral agreement alleged, but in each case an allegation as to how the oral term of the particular contract as to price came to be reached.

14 The respondents' next focus was upon par 14AAA and the corresponding paragraphs, which provide details of the breaches of the contracts in various ways, including by reason of the facts alleged in par 14AA and corresponding paragraphs. It is contended that the facts alleged in par 14AA and the corresponding paragraphs cannot in terms constitute particulars of breaches of the alleged contract since no such terms are alleged. By way of illustration, it may be noted that par 14AA.1 alleges that the particular source or supplier of the wool is "fictitious", and it is contended there is no term alleged that the identified source or supplier of the wool would not be a fictitious entity. In my judgment that complaint is specious. Paragraph 14AA pleads facts which, if established, would demonstrate that the terms of the contract (assuming they are made out) were breached. It puts the respondents on notice of facts which the applicants propose to prove at the hearing. It is not necessary that the applicant be restricted to asserting contraventions of breaches of the agreements in terms which reflect precisely the alleged terms of the agreement. It is legitimate for the applicants to allege facts which, if established, would demonstrate those breaches. The facts alleged in par 14AA are capable of doing so in the manner alleged, and fairly put the respondents on notice as to the case which they must meet.

15 The next objection concerns par 12AA.2 and par 12AA.3 which are respectively said to be inconsistent with pars 10.9 and 10.10 of the Statement of Claim. Whilst the terminology of those paragraphs is not exactly the same, it is quite clear that in slightly different ways they say the same thing. No inconsistency is made out. I find it difficult to understand how an inconsistency could be asserted. Indeed, senior counsel for the respondents did not positively submit that such an inconsistency was made out, but simply pointed out the different words by which the applicants expressed certain assertions.

16 The next objection is that the par 14AAA and corresponding paragraphs alleges breach of the contracts by the first respondent in not delivering to the applicant the wool subject of the contract. It is said that there is no term alleged that the first respondent would deliver the wool the subject of the contracts to the applicant. In my view that too is a specious objection. It is specious firstly because it is plain that the contract for the sale and supply of wool contemplated that the respondents would somehow provide the wool to the applicants. The precise means of delivery or supply is not important to the case. In the second place, par 28 of the Statement of Claim and its correspondents clearly assert the circumstances in which the wool came to be supplied by the first respondent to the applicant. I do not think that there is any unfairness or potential for ambiguity or uncertainty about the case the respondents must meet by use of the word deliver in par 14AAA or its correspondents.

17 The next objection concerns pars 12B.1 and 12B.2 and corresponding clauses. The complaint is that those pars do not identify to which contract, or in which terms, the paragraphs refer. Again, in my judgment, that contention is specious. It is a consequence of a reading of the Statement of Claim which I have rejected, namely that pars 12B.1 and 12B.2 refer to a "further, wholly oral agreement" when it is plain that they refer to a term of the agreements for the sale and purchase of the Parkes wool. There is no scope for misunderstanding.

18 The next complaint is that par 14AA.4 and corresponding paragraphs do not provide details of "the AWTA Core Test Request". It was not contended by senior counsel for the respondents that there was any misunderstanding about what document was referred to, or that there was any scope for such a misunderstanding. In my view, it is quite clear on the pleading.

19 In respect of the transaction involving the Marzotto wool, a further complaint is made that the applicant has withdrawn allegations which, by reason of cl 84 of the Statement of Claim, are said to be fraudulent. The representations concerning the Marzotto wool include:

"59.1.1 70 bales (being BWKE Order Number IG0541) were combed into tops when the wool was sold to BWKE, WWC represented to BWKE that the average micron level of those bales was 19.1:

59.1.1.1 After combing, it could reasonably be expected by reason of the formula for the calculation of the mean fibre diameter as set out in the AWTA Ltd Wool Testing Hand Book (a copy of which is available for inspection on reasonable notice at the applicant's solicitor's office) that the wool tops would have a fibre diameter of 19.2 microns."

The words deleted from par 59.1.1 were deleted by a previous amendment. The words underlined in par 59.1.1.1 were inserted by the Statement of Claim. Similar changes have been made to pars 59.1.2.1 and 59.1.2.2.

20 It is contended that the applicant should not be permitted to withdraw those allegations. In my view, the alterations do not amount to the withdrawal of allegations but are a re-casting of an allegation in a more precise way. There is no withdrawal of an allegation of fraud. The allegation of fraud is still maintained. In this instance, the respondents do allege prejudice by reason of the amendment. The prejudice which the respondents claim is said to be the loss of the opportunity to confront an allegation which is said to be unsustainable, and so would they have lost the opportunity of succeeding on issue which would entitle them to substantial costs. To state the proposition is to demonstrate its fallacy. If the allegation is not made in the terms they wish it to be made, they will not incur the costs involved in resisting it. I reject the contention that a particular allegation of fraud should be insisted upon being maintained so that the respondent can run up, and then recover, costs in opposing a hopeless case which is not sought to be pursued is a relevant prejudice on an application to amend a pleading. In any event, as I have indicated, I do not consider that those amendments make such a change to the allegations as would disadvantage the respondents in the preparation and presentation of their case.

21 Senior counsel for the respondents then took some further "less substantive objections" to the Statement of Claim. They were that the Statement of Claim uses a reference to the first respondent some times in a variable way. It was not suggested that it was used in a way which caused any embarrassment. It was also pointed out that each schedule referred to in the Statement of Claim is entitled "Amended Schedule". Again it was not suggested that there was any scope for misunderstanding or embarrassment. Thirdly it was pointed out that sometimes the word "contract" is used in the plural when it should not be. Again, there is no scope for any misunderstanding, at least in so far as those issues were pointed to me. I propose to grant leave to amend the statement notwithstanding those matters.

22 There were further objections to the Statement of Claim. It was contended that there are no allegations in it to support the relief sought in the Amended Application for damages for breach of warranty, for loss of reputation and goodwill, for exemplary damages, or for disbursements. In my view, those objections have no substance. Each of those claims are made not simply in the Amended Application, but in the Statement of Claim (pars 91.5, 91.8, 91.9 and 91.11). The complaint concerning the claim for "disbursements" is made out of context. It is simply part of the claim commonly found in a Statement of Claim for an order for recovery of costs and disbursements if the application is successful. Although there is no separate allegation of facts giving rise to a claim for damages for breach of warranty, the claim for damages for breach of warranty both in the Amended Application and in the Statement of Claim is expressed to be a claim for damages for "breach of contract and/or warranty". It is apparent that it is the breach of contract properly particularised which is the subject of those claims. It was not suggested by senior counsel for the respondents that there was any misunderstanding about that. There are allegations of fact in par 89.4 of the Statement of Claim to support the claim for damages for loss of reputation and goodwill as part of the applicant's damage.

23 Order 12, r 4(2) of the Federal Court Rules requires the applicants to have pleaded the facts upon which it claims to be entitled to be exemplary damages. Those facts, if such a claim arises, must be those in the Statement of Claim. If there is evidence sought to be adduced at the trial to fortify that claim, and it is evidence which does not relate to a pleaded fact or particular, then the respondents will be entitled to object to that evidence. I do not consider that there are no facts alleged in the Statement of Claim upon which a claim for exemplary damages might be made out, assuming that such a claim is sustainable in a proceeding such as the present. Senior counsel for the respondents did not contend that that was the case. In my judgment, the applicant has identified a claim for relief, and will be confined to evidence referable to a pleaded fact or particular to make out that claim.

24 Finally, the objection is taken that the applicants have refused to consent to an order to pay the respondents' costs of and occasioned by the amendment. I accept that that is the case. I indicated that I would deal with the costs of the application separately. I have fixed a time when, if necessary, those costs may be argued. If there is the need to make an order for costs in favour of the respondents in the circumstances of the case to do justice between the parties, such an order will be made. The fact that the applicant does not consent to such an order does not of itself provide a reason why the order granting leave to amend the Statement of Claim should not be given. It is a matter within the discretion of the Court.

25 For those reasons, the application for leave to amend the Statement of Claim was granted. I extend the time from which any application for leave to appeal from the order made on 15 March 2002 run from 3 April 2002

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:

Dated: 28 March 2002

Counsel for the Applicant and Cross-respondent:	Mr RC White and Mr R Kennett
Solicitor for the Applicant and Cross-respondent:	Kelly & Co.
Counsel for the Respondents and Cross-claimants:	Mr J Hammond QC and Mr N Russell
Solicitor for the Respondents and Cross-claimants:	Andrew Woolfe & Co.
Date of Hearing:	15 March 2002
Date of Decision:	2 April 2002