Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Mainteck Services Pty Limited v Stein Heurtey Australia Pty Limited [2012] NSWCA 12
• Hearing dates: 3 February 2012
• Decision date: 16 February 2012
• Before: McColl JA at 1; Basten JA at 1

Decision

(1) Leave to appeal refused.

(2) Applicant to pay the respondent's costs of the application.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: APPEAL - civil - application for leave to appeal from refusal to allow amendment - issues raised following interim report of referee - referee's final report provided but not yet adopted; PROCEDURE - civil - application to amend - leave sought after hearing before referee
• Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 57
• Cases Cited: Richards v Cornford (No 3) [2010] NSWCA 134
• Category: Procedural and other rulings
• Parties: Mainteck Services Pty Limited - Applicant; Stein Heurtey SA - First Respondent; Stein Heurtey Australia Pty Limited - Second Respondent
• Representation: Counsel: Mr F Corsaro SC/Mr F Kalyk - Applicant; Mr PW Taylor SC - Respondent; Solicitors: Piper Alderman - Applicant; Jones Day - Respondents
• File Number(s): CA 2007/266650

Decision under appeal

• Jurisdiction: 9111
• Citation: Mainteck Services Pty Ltd v Stein Heurtey SA [2011] NSWSC 844
• Date of Decision: 2011-08-01 00:00:00
• Before: McDougall J
• File Number(s): SC 2007/266650

Judgment

1 THE COURT : The applicant in this Court ("Mainteck Services") is the plaintiff in proceedings in the Equity Division, in the Technology and Construction list. The proceedings involve complex claims in respect of work done by the applicant, apparently at the request of the respondents, to design, supply and fabricate a blast furnace for BlueScope Steel (AIS) Pty Ltd at Port Kembla in New South Wales. As pleaded in the Court below, there was a written agreement with a lump sum price of a little under $28 million. The applicant claimed that it was entitled to additional amounts for work undertaken, for delay and disruption and, by way of equitable compensation, for the failure of the respondents to disclose certain matters to the applicant which affected, or might have affected, the price it quoted for the work. There was also a claim for misleading and deceptive conduct in that respect.

2 On 22 June 2011 (wrongly dated) the referee (the Hon R L Hunter QC) prepared an interim report in which he concluded that the relevant agreement, "so far as it purports to apply to a scope of work, is void for uncertainty with the consequence that the avoidance carries with it the 'price' given as consideration for its performance": at par 587. On that finding, he concluded that "the fiduciary duty, variation claim and the disruption claim of [the applicant] do not require to be determined": at par 588. He accepted that there would still be a need to determine "quantum" and certain cross-claims, and that the parties should have the opportunity to be further heard on this point. It was for that reasons he did not proceed to a final report: par 572.

3 This implicit invitation to address the reference on this aspect of his interim report does not appear to have been embraced. Rather, the only apparent response of the applicant was to seek leave to amend its summons and "list statement" so as to accept that the contract was void for uncertainty and claim an entitlement on a quantum meruit basis. The reason given for the change in course was said to be to bring "the pleadings ... into line with the referee's interim findings": see Mainteck Services Pty Ltd v Stein Heurtey SA [2011] NSWSC 844 at [10].

4 On 1 August 2011, McDougall J dismissed the application for leave to amend. On 24 August 2011, the applicant filed a notice of intention to appeal and, on 14 October 2011, filed the summons seeking leave to appeal. In the meantime, the referee proceeded to hear further submissions from the parties and, on 14 December 2011 completed his final report. That report proceeded on the premise that the construction of the contract adopted in the interim report was wrong. The referee stated that the final report was prepared "with a view to facilitating the conclusion of these proceedings regardless of the correctness of the findings" in the interim report: Final Report, at par 482.

5 There has, as yet, been no application to adopt the referee's report, but the respondent stated at the hearing of the present application that it would be moving expeditiously for the "substantial adoption" of the referee's report. It is at least possible that the legal issue raised by the referee in his interim report will arise again in the course of that hearing, if either party wishes to pursue it.

6 It is not appropriate for this Court to reassess the refusal by the primary judge of leave to amend in circumstances where the final report of the referee, which was not available to the primary judge, is now completed. For this Court to ignore the final report would be to address an interlocutory judgment on an entirely artificial basis; to take account of the final report would be, at least potentially, to pre-empt the adoption hearing.

7 For example, if, at the adoption hearing, it is accepted by the Court that, despite his views about the case pleaded, the referee has nevertheless satisfactorily determined the issues arising on the case pleaded, that may put any further amendment application in an unfavourable light. On the other hand, if his views as to the inadequacy of the case pleaded have so coloured his determination of the issues that there will need to be a further hearing in any event, that may place any fresh amendment application in a different light.

8 Given the uncertainty as to the fate of the referee's final report, it is inappropriate for this Court to intervene to review an amendment application which was rejected, before, and without forewarning as to the contents of, the final report.

9 The primary judge did not accept that the amendment was merely a reflection of the interim finding of the referee. He stated at [24]:

"I can understand the proposition that if there were a contract (or purported contract) which, or an essential part of which, was void for uncertainty, and if, not knowing of that, the plaintiff carried out works under it, the plaintiff might be entitled to be paid a reasonable price for the performance of those works. But what the plaintiff wishes to do in this case is to go beyond that and allege an alternative contract .... That cannot be said, by any stretch of the imagination, to be an amendment merely to give a basis in the pleadings for the interim findings expressed by the referee to date."

10 Whether that approach will ultimately prove determinative may depend on the fate of the final report. The factors that persuaded his Honour not to permit amendment were clearly weighty. Apart from the matters discussed above, he concluded at [28]:

"This is a substantial dispute. I can infer that it has been hard fought. For example, apparently, the proceedings on the reference occupied some 39 days, and there were many thousands of pages of material put before the referee for his consideration. To permit proceedings of that complexity to be reformulated and reargued, simply because the referee reflected upon matters that were not raised for his consideration, does not seem to me to be consistent with the interests of justice as between the parties."

11 It is true that this was not a case in which the applicant stood by and allowed a matter to proceed to hearing and determination for technical reasons, in circumstances where the issues sought belatedly to be raised could have been raised at an earlier time: cf Richards v Cornford (No 3) [2010] NSWCA 134. On the other hand, the reliance by the primary judge on ss 56 and 57 of the Civil Procedure Act 2005 (NSW) was not merely a matter of managerial convenience; nor was it a failure to permit a party to identify the "real issue" in dispute. The rejection of the application was seen, at the time, as necessary to do justice between the parties. The applicant's submissions tend to repeat propositions recorded and dismissed by the primary judge, without demonstrating material error on his part.

12 In all the circumstances, this is not a case in which the Court should intervene. There is no substantial likelihood that the Court would overturn the ruling, having regard particularly to the fact that the final report has now been completed. The foreshadowed application for its adoption should now proceed.

13 Leave to appeal should be refused: the applicant must pay the respondent's costs of the application.

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Decision last updated: 16 February 2012