ACN 101 074 015 Pty Ltd v Oaks Hotels and Resorts Ltd (Ruling)

[2012] VSC 336

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2011 4579

ACN 101 074 015 PTY LTD	Plaintiff
v
OAKS HOTELS & RESORTS LIMITED	Defendant

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JUDGE:	WHELAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 August 2012
DATE OF JUDGMENT:	3 August 2012
CASE MAY BE CITED AS:	ACN 101 074 015 Pty Ltd v Oaks Hotels & Resorts Ltd (Ruling)
MEDIUM NEUTRAL CITATION:	[2012] VSC 336

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Commercial Law – Application to join a third party as the fourth defendant to the counterclaim – Leave granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. M. Harvey	Norton Rose Australia
For the Defendant	Mr. J Davis	Norton Gledhill
For the Third Party	Mr. C. Sweeney QC	Cooper Grace Ward Lawyers

HIS HONOUR:

1. Having heard argument today, my conclusion is that leave should be granted to join the third party, Mr Wong, as the fourth defendant to the counterclaim and that leave should be granted to file and serve an amended defence to the amended statement of claim and further amended counterclaim in the form handed up to the court by counsel for the defendant today.

1. The allegations to be made against Mr Wong in the proposed further amended counterclaim reproduce or reflect allegations already made about him by the defendant in its defence and counterclaim against the plaintiff.  In my view, Mr Wong ought to have been joined to that counterclaim at the outset.

1. The explanation given for not joining Mr Wong to the counterclaim at the outset was given in oral evidence by the solicitor for the defendant, Mr Green.  In substance, he said that while he was aware of the possibility of joining Mr Wong when the counterclaim was first made, he was then focused on the defence.  He also said that there was an issue in his mind about Mr Wong’s connection with Australia and that the issue of joining Mr Wong was not on the agenda.  He would not accept that he had made what could properly be characterised as a deliberate decision to not join Mr Wong.

1. This matter is not close to trial.  Interlocutory steps have not been completed.

1. The application was opposed on the basis that the explanation proffered was inadequate and, in fact, that it was evasive and not credible.  It was also submitted that the application was an abuse of process and had been made in the absence of good faith.  It was put that what was described as an “election” had been made to not make claims based on the allegations already made against the plaintiff, against Mr Wong.

1. Reliance was placed on the High Court decision in Aon Risk Services Australia Ltd v Australian National University,[1] although it was accepted that the application here was not late in the way in which the application to amend had been there.  It was submitted, relying on the reasoning of Justice Heydon in Aon that there was no discretion in this case to allow the proposed amendment. It was also submitted that Mr Wong would suffer prejudice because the claim now made might give rise to the operation of an exclusion under an insurance policy that was tendered as Exhibit A.

   [1][2009] HCA 27 (‘Aon’).

1. As I indicated, in my view Mr Wong ought to have been joined as a party to the counterclaim at the outset. It seems to me that on any view he is a person between whom and the defendant there exists questions related to claims already made in the proceeding.  He accordingly ought to be joined to the counterclaim now and the counterclaim then of course must be amended.

1. As to the submissions made against that course, my conclusions are as follows:

(1)I accept the explanation given by Mr Green for the defendant’s failure to join Mr Wong earlier.  If this application had been made at a much later stage in the proceeding, during the trial for example, that explanation might not have been adequate in the circumstances but it is, in my view, an adequate explanation in the current circumstances.

(2)I do not accept that there has been any lack of good faith or any abuse of process.  I reject the characterisation of what has occurred as being an election.

(3)I do not consider that Aon assists greatly in this case, although I accept of course everything said by the High Court in that case.  The circumstances here, in particular the stage at which the application is made, are very different.

(4)In my view, there is no relevant prejudice to Mr Wong which would justify a refusal of the orders sought.  No prejudice was suggested in relation to the conduct of the proceeding itself.  I do not accept the submission made concerning the insurance policy.  Mr Wong’s cover can only be effected by his conduct in the past. That conduct has either occurred or not occurred already.

1. To the extent it is necessary to decide whether the foreshadowed amendments are for the purpose of determining a real question in controversy between the parties to the proceeding, my conclusion is that they are.  I reach this conclusion on the basis of the allegations already made in the proceeding between the defendant and the plaintiff, notwithstanding that Mr Wong is not at this point a party to claims based on those allegations.

1. So the order will be that the defendant is granted leave to join the third party as the fourth defendant to the counterclaim and that the amended defence and the amended statement of claim and further amended counterclaim be filed in the form handed up.