Armit v Jeminex Limited (No 2)
[2012] FCA 656
•27 June 2012
FEDERAL COURT OF AUSTRALIA
Armit v Jeminex Limited (No 2) [2012] FCA 656
Citation: Armit v Jeminex Limited (No 2) [2012] FCA 656 Parties: MADONNA ANNE ARMIT v JEMINEX LIMITED ACN 113 973 087 File number: NSD 1744 of 2010 Judge: ROBERTSON J Date of judgment: 27 June 2012 Catchwords: PRACTICE AND PROCEDURE – amendment of pleadings – whether leave should be granted to permit substantial amendment to originating application where matter already set down for hearing – costs thrown away by the amendment – whether costs should be taxed immediately
PRACTICE AND PROCEDURE – subpoenas – application by respondent to set aside or amend subpoenas issued by applicant – whether subpoenas relevant
Legislation: Federal Court Rules 1979 O 62 r 3
Federal Court Rules 2011 r 40.13Cases cited: Bailey v Beagle Management Pty Ltd (2001) 182 ALR 264 Date of hearing: 20 June 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 17 Counsel for the Applicant: Mr JS Mendel Solicitor for the Applicant: Diamond Conway Lawyers Counsel for the Respondent: Mr F Corsaro SC Solicitor for the Respondent: Sachs Gerace Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1744 of 2010
BETWEEN: MADONNA ANNE ARMIT
ApplicantAND: JEMINEX LIMITED ACN 113 973 087
Respondent
JUDGE:
ROBERTSON J
DATE OF ORDER:
27 JUNE 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The applicant have leave to amend her pleading in the form of the draft annexed as KN12 to the affidavit of Mr Krishneel Nath sworn 1 June 2012, such pleading to be filed and served by 22 June 2012.
2.The applicant pay the respondent's costs thrown away by the amendment.
3.The respondent’s interlocutory application filed on 6 June 2012 be refused.
The orders made on 4 April 2012 be varied as follows.
4.The respondent request any further and better particulars of the applicant's amended originating pleading by 5 July 2012.
5.The applicant respond to the respondent's request for further and better particulars by 13 July 2012.
6.The respondent file and serve its defence to the applicant's amended originating pleading by 6 August 2012.
7.On or before 13 August 2012 the applicant give notice to the respondent and the respondent give notice to the applicant of any further documents she or it requires by way of discovery.
8.The parties complete any further discovery by 24 August 2012.
9.The applicant file and serve all lay and expert evidence upon which she proposes to rely by 28 August 2012.
10.The respondent file and serve all lay and expert evidence upon which it proposes to rely by 12 October 2012.
11.The applicant file and serve all lay and expert evidence upon which she proposes to rely in reply by 2 November 2012.
12.The matter be listed for directions at 9:30am on 7 November 2012 for the purpose of making detailed pre-trial directions.
13.The parties participate in a mediation by 13 November 2012, such mediation to be arranged by the applicant.
14.If any party is in default of any order set out above, the non-defaulting party is to notify his Honour's Associate within 24 hours of the default occurring and the Court will list the matter for directions shortly thereafter.
15.Liberty to apply on 48 hours’ notice.
16.Subject to order 2, the costs of the interlocutory applications heard on 20 June 2012 be reserved.
Note: Any lay evidence which goes beyond annexing or exhibiting documents is not to be given by way of affidavit but is to be served on the other party, but not filed, as a proof of evidence of each witness sufficient to put the other side on notice of the substance of that evidence. At the trial that lay evidence is to be adduced orally.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1744 of 2010
BETWEEN: MADONNA ANNE ARMIT
ApplicantAND: JEMINEX LIMITED ACN 113 973 087
Respondent
JUDGE:
ROBERTSON J
DATE:
27 JUNE 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Before me are two interlocutory applications, one brought by the applicant and the other by the respondent.
Applicant’s interlocutory application
The applicant’s application is for leave to amend the pleadings. This application was formally opposed by the respondent. Part of this opposition stemmed from suggestions in the correspondence on behalf of the applicant that the hearing dates, already vacated once on the application of the applicant but now set for 3 December 2012 for an estimated 10 days hearing time, could again be vacated to accommodate any prejudice to the respondent from the applicant’s application to amend her pleadings.
As these submissions developed it became clear that the applicant accepted, as she had to, that the usual order in relation to costs of an amendment would be a condition of that leave. I should note that on any view the proposed amendments by the applicant are very substantial. This is a representation case resulting from the sale of a business by the applicant to the respondent and although the submissions on behalf of the applicant described many of the amendments as a “rewording”, that is not an apt description of the substance of the amendments.
It also became clear that, absent prejudice to the hearing date, the respondent did not rely on any prejudice flowing from the amendments. I made it clear to the parties that absent some unforeseen event I would be very reluctant to vacate the December 2012 hearing dates. Both sides handed up proposed short minutes by way of timetabling designed to accommodate all the necessary interlocutory steps while maintaining the hearing dates.
The respondent’s submissions in substance had two aims. In light of the very substantial amendments proposed to the applicant’s pleading, the respondent contended that instead of the formulation “costs thrown away by the amendment” I should order that all the costs so far incurred by the respondent would be costs thrown away by the amendment. In the alternative, it was submitted that I should order that some fixed proportion of the respondent’s costs thus far incurred should be paid as a condition of leave to amend. Related to that submission was the second proposition on behalf of the respondent which was that I should order that the costs thrown away be taxed immediately.
While I accept, as I have said, that the amendments are very substantial I do not accept this submission that, at this point, I should order that all of the respondent’s costs thus far incurred should be paid by the applicant as a condition of the grant of leave to amend. The evidence as to the costs to be incurred on behalf of the respondent by reason of the proposed amendments was at a high level of generality. This is no criticism because the work has not yet been done or the costs incurred. But it does show, in my opinion, that it is too early for me to say that the entirety of the costs thus far will be thrown away by reason of the amendments. That may turn out to be the position but it is not clear to me at this point that that is or will be the position. For the same reason I am not persuaded to order that a percentage of the respondent’s costs, fixed now, constitutes or will constitute the costs thrown away by the amendment.
Similarly, in relation to the application that I order that the respondent’s costs thrown away be taxed immediately pursuant to r 40.13 of the Federal Court Rules 2011, because of the relationship between the proposed re-pleaded form of the representations and the previously pleaded representations this is not a case where it is sufficiently clear that a discrete part of the case is no longer to go forward. The policy behind the rule, as was said in relation to the former Order 62 rule 3, is that in the ordinary course of litigation, costs awarded in interlocutory proceedings need not be paid until the conclusion of the proceeding when set-offs can be made in the light of the ultimate orders for costs: see Bailey v Beagle Management Pty Ltd (2001) 182 ALR 264 at [37].
For these reasons I granted leave to the applicant to amend the pleading and ordered that she pay the respondent’s costs thrown away by the amendment. I refused the respondent’s application that I should quantify the costs thrown away, either by now ordering that the entirety of the respondent’s costs so far incurred had been thrown away or that some specified part or percentage had been thrown away by reason of the amendment, or that I should order that the respondent’s costs thrown away be taxed immediately.
Respondent’s interlocutory application
The respondent’s interlocutory application was to set aside or amend subpoenas issued to third parties at the instigation of the applicant. Four subpoenas had been issued: the first to Greenhill Caliburn Pty Ltd, the second to AMP Life Ltd, the third to AMP Capital Investors Ltd and the fourth to Westpac. The interlocutory application sought that each of these subpoenas, to third parties, be set aside or be amended in a specified respect.
Because, I assume, the application to set aside these third-party subpoenas was by the respondent, no reliance was placed on notions of oppression. In any event there was no evidence of oppression. Thus the sole ground relied on, as I understood it, was relevance, particularly in light of the discovery orders I made on 22 August 2011 and the discovery already made by the respondent.
As to all four subpoenas the respondent sought, in the alternative to setting the subpoena aside, that each be amended to limit the documents to those dated from 1 July 2007 to 14 March 2008. In relation to the Westpac subpoena there was a further suggested limitation.
The common question is whether I should limit the due diligence reports on Jeminex Ltd to the period 1 July 2007 to 14 March 2008 instead of the period 1 July 2007 to 30 April 2009 and similarly limit the due diligence reports on Industrial Safety Apparel Solutions Pty Ltd. The further suggested limitation in relation to the Westpac subpoena is that paragraph 1, instead of reading: “All reports on the viability and performance of Jeminex Ltd and its business operations in the period 1 January 2008 to 31 December 2008” should read “All reports on Jeminex Ltd’s available working capital facilities and acquisition funding to acquire Industrial Safety Apparel Solutions Pty Ltd in the period 1 June 2007 to 14 March 2008”.
These matters were not developed before me in oral submissions, either at all or by reference to the applicant’s proposed amended pleading, but reliance was placed on the affidavit sworn by Ms Bates on 6 June 2012. It was there said, by way of submission, that the applicant, by these subpoenas, was seeking production of documents which were either specifically excluded from the discovery orders or which have already been discovered by the respondent.
I am not persuaded, particularly in light of the substantial amendments to the applicant’s pleading for which the respondent has yet to seek particulars or to plead its defence, either to set aside these four subpoenas or to order their amendment in the manner proposed in the respondent’s interlocutory orders. Although 14 March 2008 was, as pleaded, the date that the applicant entered into a Share Sale Agreement with the respondent, speaking generally the breaches as pleaded do not have that cut-off date. The significance of April 2009 is that it was in that month, as pleaded, that the respondent purported to terminate the applicant’s employment contract.
As to the further suggested limitation in relation to the Westpac subpoena I am similarly not persuaded to limit the date by the nine months contended for, nor to limit the broader concepts of viability and performance to working capital facilities and acquisition funding.
I therefore refused the relief sought by the respondent in its interlocutory application filed on 6 June 2012.
Conclusion
For these reasons I made the orders on these applications in the form that I initialled on 21 June 2012. Subject to the order that the applicant pay the respondent’s costs thrown away by the amendment, I order that the costs of the interlocutory applications heard on 20 June 2012 be reserved.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson. Associate:
Dated: 27 June 2012
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