ABL Nominees Pty Ltd v MacKenzie - [2014] VSC 460

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2009 4756

ABL NOMINEES PTY LTD (ACN 106 756 521) In its corporate capacity and as Trustee for the Lighthouse Warehouse Trust No. 8 (Environinvest Finance)	Plaintiff
v
CAROLINE MACKENZIE	Defendant

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JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	16 September 2014
DATE OF JUDGMENT:	17 September 2014
CASE MAY BE CITED AS:	ABL Nominees Pty Ltd v MacKenzie
MEDIUM NEUTRAL CITATION:	[2014] VSC 460

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PRACTICE AND PROCEDURE — Application to amend pleadings — New defences sought to be raised - Principles relevant to an application to amend — Test for determining whether amendment futile — Late application to amend to include Amadio defence (Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447) — Whether pleading discloses a viable defence – Relevant principles applicable to defence of unconscionable advantage taken of a person suffering a special disability— No viable defence in proposed amended pleading — Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr O. Bigos	Allens Linklaters
For the Defendant	Mr T.G. Moloney	Foundation Legal

HIS HONOUR:

Introduction

By summons filed on 11 September 2014 the defendant (Caroline or the defendant) applies for leave to file and serve a Fourth Further Amended Defence.

The plaintiffs’ claims arise under a loan agreement said to have been entered into in June 2000 between the first plaintiff’s ultimate assignor, the second plaintiff Blackburne Pty Ltd, and Caroline. That loan agreement was assigned by Blackburne to Environinvest Limited, the fourth plaintiff (EIL) and then to Primary Yield Finance Pty Ltd, the third plaintiff (PYF) and from PYF to the first plaintiff (ABL).

The substantial defence in the existing Third Further Amended Defence filed on 2 March 2012 (after denials of the assignments alleged) is that under a put and call option between the defendant and EIL—the defendant was granted a put option, and EIL a call option—under which EIL could be called on to buy certain property, or could call on the defendant to sell that property (presumably the woodlots acquired with the loan moneys) and in consideration pay out the loan. The defendant alleges that on 20 September 2007 she (via her husband Roger Pescott) exercised the put option and in consequence the loan agreement was discharged.

Amendments sought

In the application to amend the defence the defendant seeks to:

(a) Withdraw admissions in relation to the execution of the loan agreement to be consistent with the Amadio pleading referred to below;

(b) Change in a minor respect the way the defence under the put and call option is pleaded;

(c) Plead unconscionable conduct on the part of ABL in failing to give notice of the assignment until 2008. This defence alleges that if the loan was not paid out as a result of the exercise of the call option (which is the primary defence) then that was because of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] VSC 460
Decision Date: 17 September 2014

CaseChat Overview and Summary

In the Federal Court of Australia, ABL Nominees Pty Ltd sought to challenge a decision made by MacKenzie. The dispute centred around the application to amend pleadings, specifically an attempt to introduce new defences late in the proceedings. The court was tasked with determining the appropriate principles to apply when deciding whether to permit an amendment to the pleadings, particularly focusing on the test for determining whether such an amendment would be futile.

The primary legal issue before the court was whether the application to amend the pleadings to include a defence based on the principle of unconscionable advantage, as articulated in Amadio v. Commercial Bank of Australia Ltd, was permissible. The court needed to assess whether the proposed amended pleading disclosed a viable defence and apply relevant principles to determine the sufficiency of the proposed defence. Key principles included the requirement for a sufficient nexus between the original cause of action and the proposed defence, the timing of the application, and the likelihood of the amendment succeeding if granted.

The court concluded that the proposed amended pleading did not disclose a viable defence. It found that the new defence of unconscionable advantage was not sufficiently linked to the original cause of action and would likely be futile. The court emphasised the importance of the timing of the application, noting that the proposed amendment was made well after the pleadings were closed. Consequently, the application to amend was refused, and the court found no merit in the proposed defence. The court's decision underscored the stringent requirements for amending pleadings late in the proceedings, particularly when introducing new defences that do not align with the original cause of action.

Orders