Anaconda ... up 23%, page-3

Last week I commented to Groundzero that I thought that Anaconda stood a good chance of receiving compensation from Fluor Daniel matey. Although I doubt that they would receive the full $1.2 billion that they are claiming.

I partially based my assumption on the fact that Fluor had instigated court proceedings against Sherrit & Dynatec (Sherritt), claiming the same plant malfunctions that Anaconda claimed against Fluor. Fluor is obviously trying to cover their rses in the event of losing the Anaconda case.
By taking that action it would appear that Fluor feels that the Arbitration Court may make an award against them.

If Anaconda are awarded (& receive) the $1.2 billion, then who knows where the share price will end up matey.
Even $400 million should send it over a $1.

.......or

Are certain parties in the market attempting to create the impression that Anaconda will win compensation?

.......or

Is the price being 'tickled up' to get away a possible rights issue at a healthy price?

I've sold my shares today after more than doubling my money in a short period of time. Not because I think they will not win compensation, but because the profit was too much to resist. Also the bondholder issue is still a dark cloud over their heads. (a big compo pay out will rectify that though)

Be aware though, that if compensation is not forthcoming, then ANL's share price will plummet matey. And if the bond issue is not resolved then.........

Below is the Fluor V Sherritt court proceedings. It is well worth the read as some very interesting points have been made. These proceedings were not well known & were not commented on by Anaconda or the media as far as I could ascertain.

(Hope you are enjoying the ride Groundzero)



All the best

Guardian


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


Fluor Australia Pty Ltd v Sherritt International Corporation & Anor [2002] VSC 203 (29 May 2002)
Last Updated: 14 June 2002





IN THE SUPREME COURT OF VICTORIA
Not Restricted


AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION



BUILDING CASES LIST
No. 6527 of 2000

FLUOR AUSTRALIA PTY LTD

(ACN 004 511 942)
Plaintiff




v





SHERRITT INTERNATIONAL CORPORATION (NB-500937)
First Defendant




DYNATEC CORPORATION (ON-1261960)
Second Defendant




---

JUDGE:
Byrne J

WHERE HELD:
Melbourne

DATE OF HEARING:
3 May 2002

DATE OF JUDGMENT:
29 May 2002

CASE MAY BE CITED AS:
Fluor Australia Pty Ltd v Sherritt International Corporation

MEDIUM NEUTRAL CITATION:
[2002] VSC 203





---

PRACTICE and Procedure - claims for damages for negligence and misleading and deceptive conduct - alleged loss comprises liability to third party the subject of incomplete arbitration - whether present loss - whether claims premature - stay or summary judgment - inconsistent allegations - abuse of process - pleadings - sufficiency of particulars

APPEARANCES:
Counsel
Solicitors

For the Plaintiff
Mr D.G. Collins SC,

with Ms A.M. Ryan
Allens Arthur Robinson





For the Defendants
Mr J.G. Santamaria QC,

with Mr R.M. Peters
Arnold Bloch Leibler



HIS HONOUR:


This litigation commenced by writ filed on 18 August 2000 arises out of a project for the design, construction and commissioning of a nickel and cobalt treatment plant at Murrin Murrin in Western Australia. The project was undertaken by certain joint venturers who acted by their agent Anaconda Operations Pty Ltd ("Anaconda"). On 21 August 1997 the plaintiff, Fluor Australia Pty Ltd ("Fluor"), entered into two agreements with Anaconda whereby it agreed to complete the design and construction of the plant and to provide Anaconda with assistance in the "commissioning, production and ramp up and other operational support following mechanical completion of the Plant".[1] These contracts contained provisions for the resolution of disputes by arbitration. Disputes have indeed arisen between Fluor and Anaconda and these have been referred to arbitration pursuant to the Commercial Arbitration Act 1984 (Vic). The arbitration is not complete.


The defendants to this proceeding are two Canadian companies whose business it is to provide process and metallurgical technologies services with respect to mineral extraction. The secondnamed defendant, Dynatec Corporation ("Dynatec"), is a wholly owned subsidiary of the firstnamed defendant, Sherritt International Corporation ("Sherritt"), and is the company through which Sherritt provides its process and metallurgical technologies services. I shall refer to Sherritt and Dynatec as "the Sherritt parties" unless it be necessary to distinguish between them. Before the 1997 agreements between Anaconda and Fluor were entered into, Sherritt was retained in March 1995 by Anaconda Nickel Ltd, the ultimate holding company of one of the joint venturers, to grant to Anaconda Nickel a licence to use its technology in the project and to provide process design, engineering and technical services in relation to it.[2] For this latter purpose the Sherritt parties prepared a feasibility study, performed test work and preliminary design for the plant.


Between June 1996 and August 1997 Fluor was introduced into the project and worked in conjunction with the Sherritt parties in developing the design of the plant. In August 1997, Fluor entered into the two agreements with Anaconda to which I have referred.


Fluor alleges from this that, in its performance of the design work for the plant, it acted in conjunction with and under the direction, guidance and advice of the Sherritt parties and that the Sherritt parties owed to it a duty of care in the performance of these functions[3]. It further alleges that the work performed by the Sherritt parties was deficient in 16 respects which are set out in sub-paragraphs (a) to (p) of paragraph 37 of the statement of claim. In paragraph 38 it alleges that these deficiencies were the result of the failure of the Sherritt parties to exercise reasonable skill and care, again, setting out particulars with respect of each of the deficiencies. In paragraph 39 it alleges loss and damage under 15 headings, each of which is also related to one or more of the identified deficiencies.


Fluor puts its claim in the alternative as one for misleading and deceptive conduct contrary to the Trade Practices Act 1974. This claim is put on the basis that the Sherritt parties made 16 representations in the course of performing its work[4], that each was false and misleading[5] and that Fluor performed its work and entered into the two contracts with Anaconda and completed the project on the basis of and in reliance upon these representations[6]. In paragraph 45 it alleges that it has suffered loss and damage, repeating the particulars of loss and damage given under paragraph 39 given with respect to the negligence claim.


This brief summary, taken from the statement of claim, which is in fact an amended statement of claim filed on 1 February 2002, does not do full justice to a pleading which runs to 45 pages, but it is sufficient to explain the nature of the present application to which I now turn.


It is brought by the defendants by summons filed on 15 April 2002 seeking two orders:

(1) an order pursuant to order 23.01(1)(a) or 23.01(1)(c) of the Supreme Court Rules ("the Rules") that there be judgment for the defendants on all but three claims made in the amended statement of claim; further or alternatively, (2) an order pursuant to order 23.02(a), (c) or (d) of the Rules that six representative claims in the amended statement of claim be struck out.
Three arguments were presented in support of this application:

(a) Subject to three exceptions, Fluor has not yet suffered any actual loss so that the claims are premature. The defendants seek judgment in respect of these claims.

(b) Fluor, in defending the claims of Anaconda in the arbitration, has adopted a position and has or will lead evidence before the arbitrators which is contradictory of the allegations made by it in this proceeding. This proceeding is, therefore, an abuse of process and should be stayed or dismissed.

(c) In any event, the amended statement of claim contains many pleading inadequacies so that the pleading, or parts of it, should be struck out as prejudicial or embarrassing. For this purpose, six of the claims were selected as representative of these pleading deficiencies.

The Prematurity Contention


It is common ground that the cause of action of the plaintiff must be complete at the time the proceeding is commenced.[7] A claim in negligence[8] and one for misleading and deceptive conduct[9] may not, therefore, be brought if the plaintiff has suffered no consequential loss and damage. Prospective or contingent loss will not suffice[10]. At a pleading level, Fluor has satisfied this requirement inasmuch as it alleges in paragraph 39 that it has suffered loss and damage. In the particulars which follow, this loss and damage is described in four different ways.

"(1) As a result of... [the deficiency] Fluor is liable to Anaconda for the cost of rectification[11]. (2) As a result of .... [the deficiency] Fluor has become liable to Anaconda for the cost of rectification.[12] (3) [The deficiency] has contributed to Fluor's liability to Anaconda...[13] (4) As a result of ... [the deficiency] Fluor has incurred costs.[14]"
The three claims adopting the fourth formula are the three claims which are exempted from the application for judgment.


What is contended on behalf of the Sherritt parties with respect to the remaining claims is that the evidence shows indisputably that Fluor has in fact not suffered any loss as a consequence of any deficiency and that it will not suffer any loss as alleged or at all, unless and until it receives an adverse award on that deficiency in the arbitration. Accordingly, no cause of action has yet arisen.


The facts underlying this submission were not in issue. The liability of Fluor to Anaconda for these deficiencies has not been determined or quantified by judgment, award or agreement. Indeed, Anaconda asserts the liability of Fluor for these deficiencies in the arbitration, and Fluor denies its liability for them, raising various factual and legal answers in its points of defence.


On behalf of Fluor it was contended that I should not conclude that its causes of action were incomplete. I was reminded that in an application of this kind I should not give judgment without trial unless satisfied that the claims[15] raise no real question to be determined whether of fact or law[16] and that this cannot be overcome by amendment.[17] I shall proceed on this basis.


Counsel on behalf of Fluor argued that its liability to Anaconda presently exists notwithstanding that it has not been determined or quantified. Alternatively, it was put that Fluor is entitled to seek declarations that the Sherritt parties are in breach of their duty of care or have contravened s. 52 of the Trade Practices Act and that this was sufficient to support the present proceeding.


The debate on the first point was directed to the loss alleged in the pleading which speaks in terms of Fluor's liability to Anaconda. On behalf of Fluor it was put that there arises an underlying liability to Anaconda upon the breach of contract or other wrongful act on the part of Fluor. This liability continues until it is extinguished, as for example, by merger in judgment or by satisfaction. Moreover, in a case such as the present where the claims of Anaconda have been referred to arbitration, it may be that the liability will continue even after award[18]. Counsel for Fluor fastened upon this to argue that the Sherritt parties could not say to the required degree of certainty that no liability presently exists as is pleaded.


To my mind, this argument confuses two meanings of the word "liable". In ordinary use, it may indicate that a person is at risk of or exposed to or subject to or likely to suffer from something, usually unpleasant; it also has a meaning of being bound or obliged to or be legally subject or amenable to[19]. In any event, the point at issue is not as to the meaning of this word in the pleading; it is whether Fluor has suffered any present loss and damage of whatever kind.


The leading authority on this point is Wardley Australia Ltd v The State of Western Australia.[20] It is clear from the judgments that this question does not admit any simple or mechanical answer. This was a case of misleading and deceptive conduct where the point of issue was whether the loss of the State of Western Australia was suffered when it entered into an indemnity agreement as a consequence of the conduct of Wardley so that the proceeding was barred by the three-year limitation period imposed by s 82(2) of the Trade Practices Act. This contention was rejected by the High Court which concluded that the cause of action arose and time began to run, at the earliest, only when the State was called upon to honour its indemnity obligations.


This is a most instructive case, not only because of the observations of high authority it contains, but also because it points up the implications of the present case. If the contentions put on behalf of Fluor are correct, when does its cause of action in negligence and that under s 52 of the Trade Practices Act arise? The answer to this question provides the earliest date upon which a proceeding to enforce those causes of action may be brought and also makes it possible to know the last date upon which it may be brought.


The discussion of the majority commenced with the following passage:

"Economic loss may take a variety of forms and, as Gaudron J. noted in Hawkins v. Clayton, the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough".[21]
Their Honours then concluded that as a matter of principle, when, as a result of a defendant's negligent misrepresentation, a plaintiff enters into a contract which exposes him or her to contingent loss or liability, "the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred",[22] And at page 533 their Honours added this:

"The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate the plaintiff for the loss ultimately suffered. These practical consequences which would follow from an adoption of the view for which the appellants contend outweigh the strength of the argument that the principle applicable to the cases in which the plaintiff acquires property (or a chose in action) should be extended to cases where an agreement subjects the plaintiff to a contingent loss. In such cases, it is fair and sensible to say that the plaintiff does not incur loss until the contingency is fulfilled".

Brennan J likewise emphasised the importance of identifying the precise nature of the economic loss which the plaintiff suffered, whether by payment of money, by the transfer of property, by diminution in the value of an asset or (as in the present case) by the incurring of a liability.[23] His Honour continued at page 537 as follows:

"The quantification of the diminution in value of an asset or of a liability incurred or the value of any benefit acquired may not be ascertainable at the time when the burden of the transaction is borne. In that event, the suffering of any loss cannot be said to occur before it is reasonable ascertainable (not before it is ascertained) that the burdens which the plaintiff has borne are greater than the value of the benefits that the plaintiff has acquired or will acquire. In other words, no loss is suffered until it is reasonably ascertainable that, by bearing the burdens, the plaintiff is `worse off than if he had not entered into the transaction'."

Deane J accepted that there was authority for and against the view that loss and damage was sustained immediately upon the assumption or coming into existence of a contingent liability, but none was binding on the High Court. Accordingly, His Honour said this:

"It is not possible to derive from the authorities or from settled principle a simple negative or affirmative answer to the abstract question whether, for the purposes of a limitation provision, the mere incurring of a contingent liability to make a monetary payment in the future suffices to give rise to a cause of action of which loss or damage is a necessary ingredient. Nor, in my view, is it practicable or desirable for the courts to attempt to provide in advance an unqualified affirmative or negative answer to that abstract question. For one thing, the answer may vary according to the facts of the particular case, including the nature and implications of the contingent liability and whether the circumstances were such that, even without the benefit of hindsight, the distinction between contingent and certain loss or damage was illusory rather than real".[24]

Toohey J, likewise, focussed attention upon the interest infringed by the wrongful act and the damage suffered as a consequence. His Honour also concluded that the true loss suffered by the State occurred when the events crystallised so that it was then called upon to act under the indemnity.[25]


I now seek to apply these principles to the facts of the present case. The acts which are relied upon as constituting acts of negligence and misleading and deceptive conduct are those set out in paragraphs 37 and 40 of the statement of claim respectively. From my reading of these paragraphs and those depending upon them, it appears that the case of Fluor is that it was provided by the Sherritt parties with specifications and design criteria to which it was obliged to conform in preparing its design and in constructing the plant which was required to achieve specified production and performance standards. These standards were also prepared by the Sherritt parties. Fluor says, too, that, when it prepared its design, this was submitted to the Sherritt parties for review and they did not draw to the attention of Fluor any shortcomings in this design. It was this design which was included in the 1997 agreements with Anaconda.


Broadly speaking, those parts of the Sherritt parties' work which were the subject of complaint fell into four classes as they appear in paragraph 37 of the statement of claim:


(a) specification of a material for use in the autoclaves which was unsuitable, namely titanium grade 1[26]
(b) specification of functional requirements which were not, in the circumstances, achievable[27]

(c) specification of a process design based on data which was inaccurate or otherwise inappropriate[28]

(d) upon review of Fluor's design the Sherritt parties failed to identify and inform Fluor of its design errors.[29]



It is necessary for my present purposes to underline that Fluor was not the owner of the plant. Deficiencies in the plant therefore were the concern of Anaconda. Fluor's interest in the project was to perform the work of designing, constructing and commissioning, for which it was to receive payment from Anaconda. The adverse impact upon Fluor of any deficiency in this work would, therefore, lie in a diminution of payment received from or in its making payment to Anaconda. It might also lie in its incurring the cost of carrying out rectification work, if this be done. It is economic loss. Until these impacts occur, its loss is prospective only and it will not suffice to make a cause of action in damages for negligence or misleading and deceptive conduct complete.


The matter may be tested from a different point of view. Were the trial of Fluor's claim against the Sherritt parties to be held and determined today, what would be the measure of its loss? It would have to be measured on a contingency basis, reflecting the prospect that Anaconda would succeed in the arbitration and it may, therefore, not compensate Fluor fully for the loss it may suffer in due course or it may over-compensate it.[30]


Suppose that, in the alternative, the question in this case was when the cause of action is barred by statute. When would Fluor's cause of action, properly pleaded, arise and time then begin to run? On the analysis presented by its counsel, this is at the moment it acquired an underlying liability to Anaconda for the deficiencies in the plant, notwithstanding that this be not quantified, fixed or even, perhaps, known. If these deficiencies are inherent in the design, it may be that the time therefore would begin to run when the relevant component was manufactured or even earlier or, perhaps, when the deficiency was reasonably ascertainable by Anaconda. These are events which have little bearing on the claims which Fluor makes against the Sherritt parties.


I conclude, therefore, that Fluor's causes of action, other than the three exempted causes of action, are not yet complete so that this separate proceeding to enforce them is premature.


I mention, because these were matters argued before me, that I have derived no assistance from the fact that such claims may have been brought by third party proceeding had the claim by Anaconda against Fluor been brought in the Court. Further, it is beside the point that the claims for contribution may in these circumstances have been brought having regard to the special definition of liability in the Wrongs Act 1958 s. 23A.


It was then put on behalf of the Sherritt parties that I should give judgment in respect of these premature claims. They ought not to have been brought and the occasion for bringing them may never arise. The alternative course contemplated by Rule 23.01(1), that of staying the claims, ought not be adopted because this would require the Sherritt parties to continue to conduct their businesses under the shadow of a multi-million dollar claim which may never be reactivated and, perhaps, to make provision for this claim in their accounts. Finally, it was submitted, that if the claims in question were left alive, albeit dormant, this would prejudice the Sherritt parties who might be minded to bring contribution proceedings against third parties. This, I was told, had to be done by August of this year, twelve months after the service of the writ. At that time, the Sherritt parties would be in the position of not knowing if the stayed claims would ever be revived and therefore should not be required to determine whether to sue a third party, to formulate a claim which may never arise and to incur the expense of taking steps to join that party.


The alternative course, that pressed on behalf of Fluor, was that I should allow the trade practices claims to stand on the basis that there is a present entitlement to declaratory relief and that I should stay the negligence claims. Where a claim is brought for declaratory relief, it is not necessary that the statement of claim should disclose a complete cause of action; such a claim might nonetheless be supported by a prayer for relief which included a claim for "further or other relief".[31] Such a prayer for relief is found in the present statement of claim. In Arthur Young v Brunswick NL[32] Brooking JA concluded that such a prayer would, without amendment, support a claim for a declaration and that the plaintiff's entitlement to declaratory relief could not be denied on the ground that all of the allegations necessary to support a complete claim for damages were not included in the pleading. The present case is a little different from that in that I have concluded that the vice in the plaintiff's claim is not one of pleading but one of proof. If the claim as presently pleaded were to be tried today, the claims for damages would fail and the Court could be asked merely to make a declaration that the defendants were guilty of acts of misleading and deceptive conduct. It is probable that a Court would decline such relief since it would be of no utility in a claim such as the present to make such findings in the absence of more substantive relief.


Insofar as the choice between summary judgment and a stay order turns upon matters of discretion, the following would support the stay order. First, I was told by counsel that the first part of the arbitration hearing has been completed and an interim award is expected to be published in July or August of this year.[33] The parties to this proceeding could not, even if the proceeding were ready for trial, expect a trial date in this Court for at least twelve months. In any event, as I indicated to counsel in the course of argument, I would be very reluctant to fix this case for a trial to commence before the arbitration is completed. Third, while Fluor made no concession before me, experience shows that a contractor under a design and construct contract cannot confidently expect to emerge from litigation or arbitration entirely unscathed where the construction has failed or has not performed to specification. Fourth, if the claims in question were disposed of as is proposed by the Sherritt parties, they could be reagitated in this proceeding after award by amendment pursuant to Rule 36.01(3). There is no benefit in putting the parties to this expense. Finally, since this proceeding will go forward in any event against the Sherritt parties in respect of the three excepted claims, little benefit is to be had from disposing of the balance.[34]


With respect to the difficulties of the Sherritt parties bringing third party contribution proceedings, it was put that the time for bringing these proceedings expires on the anniversary of the service of the writ on the defendant or the last date upon which the claim against the Sherritt parties might be brought, whichever last occurs. Accordingly, given the findings that I make that no complete cause of action presently exists in respect of the claims now in question, time has not yet commenced to run. As to the embarrassment to the Sherritt parties due to the existence of a pending claim, it may be that under their accounting regime there is no benefit that the pending or contingent claim or liability is or is not in existing litigation. There was no evidence of this.


Having weighed up these competing considerations it seems to me that the interests of justice in this case point to a stay of the claims in question rather than their summary disposal by judgment. I am conscious of the fact that the whole proceeding is to be stayed pending the arbitral award, following which it will be revived, perhaps, in different form depending upon the outcome of the arbitration.


Abuse of Process


It was put on the authority of the judgment of Brooking J in R v Smith[35] that "if civil or criminal proceedings are brought without reasonable grounds the prosecution of those proceedings is an abuse of process and may be stayed as such"[36]. This is relied upon as the foundation of a submission that the present claims by Fluor against the Sherritt parties are an abuse of process because, in the arbitration, Fluor denies the same claims when they are put against it by Anaconda and, further, it proposes in some cases to call evidence at the arbitration which is inconsistent with its claims in this proceeding.


Let it be assumed that there is such an inconsistency in the position of Fluor in the arbitration and in this proceeding. The Sherritt parties' submission is nonetheless without substance. The passage from R v Smith[37] which is relied upon must be read in its context. On the following page his Honour makes it clear that his use of the expression "without reasonable grounds" requires no exercise of qualitative judgment. A proceeding is an abuse of process in this sense only where it "can be clearly seen to be foredoomed to fail"[38].


What then is said about the Fluor claims in the present proceeding? On their face there is nothing to suggest that they are foredoomed to fail. The fact that they repeat claims made against Fluor in the arbitration and are denied in the arbitration does not mean that they are foredoomed to fail in this proceeding. It is possible that the Anaconda claims in the arbitration might succeed so that, if Fluor has access to equivalent evidence, it cannot be seen as inevitable that this Court will reach a different conclusion. Nor is the submission of the Sherritt parties improved by reference to the witness statements produced by Fluor for the arbitration. It may be that there are contradictory witness statements produced in the arbitration by Anaconda. What evidence Fluor chooses to call at the trial of this proceeding is now unknown. It is not for me to judge whether the unknown testimony of these unknown witnesses will inevitably be rejected.


It cannot be an abuse of process simply to make inconsistent allegations against different parties in the same proceeding[39] or in two different proceedings.[40] The precise point presently in issue was the subject of consideration by French, J in Sea Culture International Pty Ltd v Scoles.[41] In that proceeding the respondent brought an application to strike out the applicant's statement of claim as an abuse of process on the basis that it made claims which were inconsistent with those made in other proceedings in the Western Australian Industrial Relations Commission. Having observed that the power to prevent an abuse of process was one which ought to be sparingly exercised His Honour said this:

"Underlying the power that courts have assumed to stay or dismiss proceedings for abuse of process is a policy of preventing waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes. There is, in my opinion, another element to be considered and that is the necessity to maintain confidence in and respect for the authority of the courts. If a party in litigation in this Court makes a formal and public allegation by way of its pleading which is inconsistent with a formal and public allegation in another forum, then such an issue may arise. No doubt most questions of statements made by a party out of court inconsistent with its plea in court are to be resolved as matters of evidence going to credit and not upon an application for summary disposition. In most such cases there will, in any event, be room for debate about the precise extent and significance of the alleged inconsistency which can only be resolved by a consideration of all the evidence and the circumstances surrounding the alleged inconsistent statement".[42]

Like His Honour in that case, I do not here see the allegations in the arbitration as giving rise to an abuse of process of the kind there described. A very great shortcoming of arbitration as a dispute resolution process is that it does not easily admit a third party claim. This means that it not infrequently arises that a respondent in an arbitration, while denying liability, will seek to pass this liability to another in an independent arbitration or court proceeding on the basis that, "if I am liable (which I deny) then you too are liable...". In any event, in the present case an allegation in a pleading in a private arbitration may lack the "formal and public" nature to which His Honour refers, but it is not necessary that I express a concluded view on this.


The application based on the abuse of process for inconsistency will be dismissed.

Pleading Deficiencies


I do not propose to deal with these complaints in any detail. It is clear from the analysis of the statement of claim undertaken by counsel for the Sherritt parties that the Fluor statement of claim simply repeats in a modified form many, if not all, of the allegations made by Anaconda in the arbitration. It is inevitable that some or many of the claims will be the subject of amendment and perhaps abandonment after the arbitration in the light of the evidence which will then have been given and in the light of the award published and the reasons.


I will content myself however with some general observations. Experience in the Building Cases List shows that extensive battles over particulars at an early stage are often of little value to the parties or to the trial judge. The plaint is often heard from counsel, as in this case, that the pleadings do not disclose the case which their client must address. Very often the party knows very well what the case is. A feature of building cases arising out of major projects is that they are usually commenced after extensive negotiation involving exchanges of position between the parties. Furthermore, insofar as the claims concern technical matters, the litigants are usually well resourced in terms of technical input. Moreover, by the time the case comes for trial, mediation will have been conducted and expert and other witness statements will have been delivered. All of this has the consequence that the particulars provided early in the litigation process often cease to play a very significant role. This is not to say that particulars should be put to one side; cll. 16 and 18 of the Building Cases Practice Note[43] make this clear. It means only that arguments about their sufficiency must be approached in a practical and pragmatic way. It is often convenient, for example, for a defendant faced with a particularised complaint of bad work to plead in some detail to the individual allegations contained in the particulars rather than to the allegation in the substantive paragraph of the pleading. The alternative of simply denying or, worse, not admitting the allegation in the body of the pleading is looked upon with disfavour. Evasive pleading is not tolerated[44].


I note, too, that certain of the complaints made on behalf of the Sherritt parties have been accepted by counsel for Fluor. Doubtless these matters will be attended to when the revised pleading is delivered.

Conclusions


I therefore propose the following orders:

Defendants' Summons of 15 April 2002

(a) The claims of the plaintiff other than those mentioned in para 39(b)(i), and (m)(i) be stayed pending further order.

(b) The costs of the defendants of this application be paid by the plaintiff.

Summons for Directions


Order that the proceeding be stayed pending the publication of the award in an arbitration between Anaconda Operations Pty Ltd and the plaintiff or further order.

I will hear counsel further on the terms of the order and as to costs.