AED Oil Ltd v Puffin FPSO Ltd (No 4) - [2010] VSC 65

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 8380 of 2009

AED OIL LIMITED (ACN 110 393 292)	Plaintiff
v
PUFFIN FPSO LIMITED (COMPANY REGISTRATION NO. C37772) (INCORPORATED IN MALTA)	Defendant

PUFFIN FPSO LIMITED (COMPANY REGISTRATION NO. C37772) (INCORPORATED IN MALTA)

Plaintiff by counterclaim

AED OIL LIMITED (ACN 110 393 292)

AED SERVICES PTE LTD
(INCORPORATED IN SINGAPORE)

First Defendant by counterclaim

Second Defendant by counterclaim

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 February 2010
DATE OF JUDGMENT:	11 March 2010
CASE MAY BE CITED AS:	AED OIL LTD v PUFFIN FPSO LTD (NO. 4)
MEDIUM NEUTRAL CITATION:	[2010] VSC 65

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PRACTICE AND PROCEDURE – Amendment of pleadings – Inherent jurisdiction of the court to prevent abuse of process or injustice – Objectives of the power to grant leave to amend – Factors to be taken into account in decision to grant leave – Orderly and timely disposition of the issues between the parties – Unfair prejudice to the responding party – Failure to provide adequate explanation for late amendments - Efficient trial management and allocation of court resources – Supreme Court (General Civil Procedure) Rules 2005 (Vic), rr 1.14, 36.01, Supreme Court Act 1986 (Vic), s 29(2).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff and First Defendant by Counterclaim	Mr J J Gleeson SC with Mr N Pane	Corrs Chambers Westgarth
For the Defendant and Plaintiff by Counterclaim	Mr J G Santamaria QC with Dr J P Moore	Freehills
For the Second Defendant by Counterclaim	Mr J Digby QC with Mr A T Strahan	Mallesons Stephen Jaques

HIS HONOUR:

This proceeding was commenced by AED Oil Ltd (‘AED Oil’) to support an application for an injunction restraining Puffin FPSO Ltd (‘Puffin’) from appointing a receiver under a guarantee. The guarantee, given by AED Oil to Puffin, secured performance by AED Services Pte Ltd (‘AED Services’) of its obligations under an amended and restated FPSO Charter Contract dated 17 May 2007. Under a Deed of Novation and Amendment, a Charter Contract, dated 3 March 2006, was novated from AED Oil to AED Services and AED Oil bound itself to guarantee due performance by AED Services of its obligations under the Charter Contract. The Charter Contract set out the terms under which the “Front Puffin”, a floating production storage and off-loading vessel, was leased and chartered by Puffin to AED Services for deployment in an oil field located in the South Timor Sea.

The injunction had been sought by AED Oil in circumstances where Puffin had made demand upon AED Oil for amounts claimed to be payable under a tax indemnity in favour of Puffin under the Charter Contract. The demand also included some outstanding invoices for charter fees. The claim under the tax indemnity was in respect of goods and services tax (‘GST’) and income tax. The amount claimed in respect of GST related to past transactions. The obligation to pay the tax had arisen…

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: [2010] VSC 65
Decision Date: 11 March 2010

CaseChat Overview and Summary

AED Oil Limited sought to amend its statement of claim in a dispute with Puffin FPSO Limited, which was heard in the Supreme Court of Victoria. The original claim was filed to seek damages for alleged breaches of a charter party agreement, and the proposed amendments introduced new claims and parties. Puffin opposed the amendments, arguing that they were an abuse of process and would cause substantial prejudice and delay.

The court had to determine whether to exercise its inherent jurisdiction to allow the amendments, considering the objectives of the power to grant leave to amend and the relevant statutory provisions. The court also considered factors such as the timeliness of the application, the adequacy of the explanation for the delay, and the potential prejudice to the responding party. The court had to balance the objectives of the power to amend pleadings with the need for orderly and timely disposition of the issues between the parties and the efficient management of court resources.

The court found that the amendments were an abuse of process and an attempt to introduce new claims at a late stage in the proceedings. The court noted that the applicant had not provided a satisfactory explanation for the delay in seeking the amendments, and that the proposed amendments would cause significant prejudice to the respondent and waste of court resources. The court held that it would not exercise its inherent jurisdiction to allow the amendments, as doing so would not serve the interests of justice. The court dismissed the application to amend the statement of claim.

The court ordered that AED Oil Limited pay Puffin FPSO Limited's costs of the application, on an indemnity basis. The court also noted that it would be open to AED Oil Limited to seek leave to appeal the decision, but that any such application would need to be made promptly and would be subject to the usual criteria for granting leave to appeal.

Orders