Bullhead Pty Ltd v Brickmakers Pty Ltd - [2015] VSC 520

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2015 00106

BULLHEAD PTY LTD	Plaintiff
v
BRICKMAKERS PLACE PTY LTD & ORS (in accordance with the attached schedule)	Defendants

JUDGE:	CAMERON J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 July 2015
DATE OF JUDGMENT:	30 September 2015
CASE MAY BE CITED AS:	Bullhead Pty Ltd v Brickmakers Pty Ltd & ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 520

PRACTICE AND PROCEDURE – Pleadings - Collateral contract- Application to strike out amended defence - Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 - Court’s discretionary power – Strike out defence – Application dismissed – Leave not granted to amend defence.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W Houghton QC with Mr T Scotter	DLA Piper
For the Second to Twelfth Defendants	Mr M Wise	K&L Gates

HER HONOUR:

There were three summonses before me in this matter.

First in time was a summons filed by the second to twelfth defendants in this proceeding seeking security for costs.

The second was a summons dated 15 July 2015 filed by Bullhead Pty Ltd (‘Bullhead’), the plaintiff in this proceeding, in which it sought to strike out paragraphs 19, 21(d)(i) and 24 of the second to twelfth defendants’ amended defence dated 9 July 2015 pursuant to r 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic). Although the first defendant is now in liquidation and does not appear before the Court, I will refer to the second to twelfth defendants as ‘the defendants’.

The third application was a summons dated 21 July 2015 to set aside a notice to produce which was served by the plaintiff on the defendants.

I have made orders on 23 July 2015 in relation to the security for costs application and the Notice to Produce. Accordingly, this judgment only deals with the strike out application.

The application for my determination is the plaintiff’s summons dated 15 July 2015 in relation to the strike out of paragraphs 19, 21(d)(i) and 24 of the defendants’ amended defence dated 9 July 2015.

Firstly, I will set out some background.

Background – a brief overview

The plaintiff, Bullhead, is a unit holder in the Brickmakers Place Unit Trust (‘the Trust’) and a shareholder in the first defendant (‘the Trustee’).

The second to sixth defendants are unitholders in the Trust and shareholders in each Trustee. The seventh to twelfth defendants are directors of the Trustee and each is also individually a director of one of the second to sixth defendants.

The Trust was established to develop ‘The Brickmakers Place,’ a residential development in Essendon (‘the Property’). The Trustee was incorporated in December 2007 in order to act as trustee of the Trust.

The second to fifth defendants (‘the Initial Partners’) entered into a unit trust deed on 27 February 2008 (‘the Unit Trust Deed’) and a unitholders agreement on 14 March 2008 (‘the Unitholders Agreement’).

The key issue in dispute in the proceeding is…

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: [2015] VSC 520
Decision Date: 30 September 2015

CaseChat Overview and Summary

Bullhead Pty Ltd sought to recover damages from Brickmakers Pty Ltd for breach of a collateral contract. The dispute centred on an agreement that Brickmakers would provide certain guarantees in relation to a property sale, which was not explicitly stated in the main contract. The matter was before the Supreme Court of Queensland. The central legal issues revolved around whether the court should allow the amendment of the defence to include a claim for a collateral contract and if the amended defence should be struck out under Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2005.

The court considered whether the amendment would unduly delay the proceedings or cause prejudice to the opposing party. It also assessed whether the proposed defence was legally tenable and if there were grounds to strike it out. In examining these matters, the court noted that the proposed amendment introduced new facts and legal arguments that were not previously raised, and that the amendment came late in the proceedings. Despite the late timing, the court held that the proposed amendment did not introduce new causes of action or significantly alter the case's scope. However, the court found that the amendment could cause prejudice to the plaintiff due to the delay in raising the defence and the need for further evidence.

Ultimately, the court exercised its discretion under Rule 23.02 and dismissed the application to strike out the amended defence. The court ruled that the amendment could proceed, but did not grant leave to further amend the defence. This decision balanced the need for a fair trial against the potential for undue delay and prejudice. The court ordered that the trial proceed with the amended defence, but without further amendments.

Orders