Bodycorp Repairers v Maisano (No. 5)

[2013] VSC 264

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2005 09071

BODYCORP REPAIRERS PTY LTD (ACN 068 589 408)	Plaintiff
v
ANUNIZIATO ENZO MAISANO (also known as MICHAEL MAISANO and MICHAEL MASON) & ORS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	13 MAY 2013
DATE OF JUDGMENT:	14 MAY 2013
CASE MAY BE CITED AS:	BODYCORP REPAIRERS v MAISANO (No. 5)
MEDIUM NEUTRAL CITATION:	[2013] VSC 264

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Practice and Procedure – Pleadings – case management principles – prejudice – delay in seeking leave to amend – delay in conduct of trial – repeated failure to comply with court orders – leave granted in part – Civil Procedure Act 2010 (Vic), s 1(1)(c), Part 2.3.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R van de Wiel QC, Mr M Goldblatt and Mr D Yarrow	Frank Sanna
For the 1st Defendant	Mr T Di Lallo	Oakley Thompson & Co
For the 4th, 5th and 6th Defendants	Mr P Cawthorn SC and Mr P Crennan	Moray & Agnew
For the 7th and 8th Defendants	Mr T Messer	Kempsons

HIS HONOUR:

A.       Introduction

1. Yesterday morning, at the start of week 2 of the trial, an application was made by the first defendant (“Maisano”) to amend his defence.  I was informed by counsel for Maisano that the proposed pleading was served on the plaintiff (“Bodycorp”) on Friday 10 May 2013.

1. The proposed amendments fall into 2 categories.  First, the amendments to paragraphs 6A and 6B to seek to introduce discussions said to have been held at a meeting in or about April 1998.  Secondly, the amendments to paragraphs 6D to 6F seek to introduce allegations concerning the granting of a franchise to a company trading as “Bodycorp Cheltenham” said to be within the franchise territory of the franchise of Maisano at the relevant time.

B.       Background

1. In order to properly understand the circumstances relevant to the first of these amendments, it is necessary to provide some background.

1. On 17 July 2012 trial orders were made.  Outlines of evidence were ordered to be filed and exchanged on 15 March 2013.  Outlines of argument were ordered to be filed and exchanged by 12 April 2013.  Maisano failed to comply with both these orders.

1. In relation to the order concerning the outlines of evidence, it was said to me on 24 April 2013 there was some confusion with its terms.  On 24 April 2013 I made further orders for trial preparation; namely, that the outlines of evidence be filed and exchanged by 1 May 2013 and the outlines of arguments be filed and exchanged by 2 May 2013.  Again, Maisano failed to comply with these orders.

1. Orders were then made on 7 May 2013 extending the time for these outlines to 4 pm on 8 May 2013.  Yet again, there was no compliance.

1. Accordingly, last Wednesday afternoon, 8 May 2013, I further extended the time to 1 pm on Thursday, 9 May 2013.

1. An outline of argument was filed and served on 9 May 2013.  This outline made reference to matters now the subject of this amendment application.  In particular the outline of argument addressed matters raised in the proposed particulars in paragraph (i) to paragraph 6A, which reads as follows:

In or about April 1998 at a franchise meeting attended by [Maisano], Tony Murdaca of Bodycorp introduced Anke Kaufer of Bodyline Panel Works Pty Ltd as the new Cheltenham franchisee of Bodycorp.  Tony Murdaca of the plaintiff said that the new Cheltenham franchise was located in Bay Road, Cheltenham.

1. The concomitant amendments to these particulars are:

(1)to delete the reference to “July” in paragraph 6A. If the amendment were allowed, it would read “In or about early 1998” instead of “In or about early July 1998”. 

(2)The words, “alternatively stating that the Bodyline franchise had been or would be granted” have been added to paragraph 6B, thereby seeking to rely upon the discussions said to have occurred in April 1998, or thereabouts, as particularised in the particulars to paragraph 6A.

1. Also outlines of evidence were filed and served by Maisano on 9 May 2013.  Those outlines refer to the relevant discussions said to have occurred in or about April 1998.  In addition, one of the outlines filed was in relation to evidence to be led by Maisano’s solicitor, Mr Jeremy Broadbent (“Broadbent”).

1. That outline included the following:

2.        In July 2012 Broadbent obtained a company search of Bodyline Panel Works Pty Ltd which search indicated the director of Bodyline to be Anke Kaufer.

3.        During the period July 2012 to April 2013 Broadbent made enquiries and took steps to locate and contact Kaufer.  These attempts were unsuccessful and Kaufer is not available to give evidence in this proceeding.

1. Accordingly it appears that this amendment has been in contemplation since at least July last year; or, at the very least, the relevant subject matter has been before the solicitors for Maisano.  No explanation has been given for the delay of over 9 months in seeking to move the court to grant leave to amend.

1. Further, counsel for Maisano accepted that the reason for the enquiries being made on behalf of Maisano as to the whereabouts of Mr Kaufer was because he was considered to be a material witness.

C.       The applicable principles

1. Aon Risk Services Australia Ltd v Australian National University[1] sets out the relevant principles.  Adapting those principles to the circumstances of this case, they include:  

(1)Whatever costs are ordered against Maisano, there is likely to be an element of prejudice to the Bodycorp in the further unnecessary delay of proceedings.[2] 

(2)It is important to consider case management principles when exercising discretion to amend pleadings,[3] including the importance of parties complying with trial directions given by the court.

(3)The court is obliged to ensure that its limited resources are not wasted by the failure of parties to adhere to trial dates and trial directions of which they have had proper notice.[4]

(4)The party making the application during the course of a trial may, depending on the circumstances, bear a heavy burden to show why leave to amend should be granted.[5]

(5)A proper explanation should be proffered by the moving party to explain any delay in making the application.[6] 

[1](2009) 239 CLR 175. See also Klement v Randles [2012] VSCA 73, [14].

[2]At 182 [5], 213-214 [99]-[101].

[3]At 182 [6], 211 [92]-[93], 213 [97].

[4]At 189 [25].

[5]At 182 [4], 214-215 [102].

[6]At 182 [5], 215[102]-[103].

D.       Application of the principles

1. I approach this issue with these principles in mind, together with the overarching purpose set out in the Civil Procedure Act 2010 (Vic).[7]  In my opinion, leave to amend paragraphs 6A and 6B should be refused.  The reasons for that view are as follows:

   [7]            The Civil Procedure Act 2010 (Vic) s 1(1)(c) provides that the overarching purpose in relation to the conduct of civil proceedings is to “facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute”. See also Part 2.3, esp. ss 23 and 25.

(1)There have been repeated breaches of the court orders which have resulted in Bodycorp not having proper notice of the case it has to meet in relation to the allegations now sought to be made.

(2)Reliance is now sought to be made upon discussions at which a third person was present, who now cannot be located by Maisano and therefore, presumably, also cannot be located by Bodycorp.

(3)Mr Murdaca for Bodycorp has already given his evidence-in-chief and is presently the subject of cross-examination.  Although leave might be given for further evidence-in-chief to be led, this will cause further delay in the conduct of the trial.

(4)It was submitted that the further matters are covered in the outlines of evidence filed by Maisano.  This is of little moment given those outlines were only served on Thursday of last week.

(5)It was said these matters were all within the knowledge of Bodycorp and therefore there can be no prejudice to Bodycorp.  I do not accept that submission.  The new particulars concern oral representations.  The events in question are more than 15 years ago.  The prejudice caused by the delay in raising these allegations so late is, in my view, self-evident in the circumstances.  The matter raised in subparagraph (2) above compounds this prejudice.

(6)The pleading in paragraph 6A was originally very narrow in its compass.  It was alleged that Maisano discovered the conduct pleaded “in or about early July 1998”.  Given the letter sent purporting to accept the repudiation was alleged (in par 6C of the defence) to be sent on 8 July 1998, the time period in question was quite a short one.  By removing the reference to July, the pleading purports to cover a very wide and loosely defined time period.  Given the length of time since these alleged events occurred, such a general allegation is entirely unsatisfactory.

(7)The particulars already provided in relation to paragraph 6A were confined to a reference to a written document.  In those circumstances, there was no occasion for Bodycorp to make enquiries of any witness about any discussions.  In my view, the case sought to be advanced is materially different by reason of the attempt to introduce these further particulars.

1. Accordingly, leave to amend paragraphs 6A and 6B is refused.

1. Turning to the second category, the position is quite different.  The allegations now sought to be made are:

6D.     Alternatively, if this Honourable Court finds that the First Defendant was not entitled to terminate the Agreement on the grounds alleged in paragraphs 6A to 6C hereof, then the First Defendant says that in or about early 1998 the Plaintiff in breach of clauses 2.2 and 3.15 of the Agreement, granted a Bodycorp franchise to another motor vehicle repair entity, being Cheltenham Accident Repair Centre Pty Ltd trading as Bodycorp Cheltenham, which operated within the territory allocated to the First Defendant in the Agreement (“the Cheltenham Accident franchise”).

6E.      In granting the Cheltenham Accident franchise the Plaintiff evinced an intention not to be bound by the Agreement and thereby repudiated the Agreement (“the Cheltenham Accident franchise Repudiation”).

6F.      By reason of the allegations in paragraphs 6D and 6E hereof, the First Defendant was entitled on 8 July 2008 to terminate the Agreement, and the termination of the Agreement by the First Defendant was lawful.

1. As may be seen, there are no particulars of any discussions alleged to be relevant in relation to these paragraphs.  Counsel for Maisano took me through the relevant parts of the proposed further amended statement of claim served by Bodycorp in 2007 to establish the basis of these allegations.[8]  Again, none of those matters raised by counsel for Maisano in that proposed pleading relate to discussions that are alleged to be relevant.

   [8]Leave was sought in 2007 to amend the statement of claim by a proposed further amended statement of claim, but that leave was refused.  An appeal from that decision was dismissed on 11 September 2008.

1. It is well established that a party may seek to rely on the conduct of the opposing party to seek to justify the termination of a contract even if the conduct was not known to the terminating party at the time. [9]  

   [9]For example, see Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359.

1. The issue of whether Maisano was entitled to terminate on 8 July 1998 is already raised on the pleading.  Based on the evidence given to date and the way in which the new allegations are sought to be advanced, I can see no prejudice to Bodycorp if leave is granted.  This was accepted by counsel for Bodycorp in relation to this amendment, in contrast to Bodycorp’s position in relation to the other amendment sought.

1. Although the application is very late, I will grant leave to amend in the form of paragraphs 6D to 6F. The granting of leave allows the question already in controversy between the parties to be put properly before the court.

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