Bundalong Developers Pty Ltd v Bowcole Pty Ltd & Anor
[2024] VCC 167
•27 February 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-06239
| BUNDALONG DEVELOPERS PTY LTD (ACN 617 605 530) | Plaintiff |
| v | |
| BOWCOLE PTY LTD (ACN 163 869 243) and HINA PASHA (trading as PASHA LEGAL) | First Defendant Second Defendant |
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JUDGE: | HIS HONOUR JUDGE WISE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26-27 February 2024 | |
DATE OF RULING: | 27 February 2024 | |
CASE MAY BE CITED AS: | Bundalong Developers Pty Ltd v Bowcole Pty Ltd & Anor | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 167 | |
RULING
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Subject:CIVIL PROCEDURE
Catchwords: CIVIL PROCEDURE – plaintiff’s application to amend Statement of Claim and file a second further amended Statement of Claim on first day of trial – amendments to the pleading concerned allegations regarding the scope of the retainer alleged by the plaintiff against its former solicitors and breach of retainer by the first defendant and its solicitors – defendants opposed the application - principles of Aon and Ultra Thoroughbred in considering an application to amend a Statement of Claim close to, or during the course of, a trial – consideration given to the nature and timing of the application – trial having been fixed and vacated on 5 previous occasions - whether granting the application would cause prejudice and further delay – Court not satisfied the interests of justice required the amendment to be permitted - application dismissed.
Legislation Cited: Civil Procedure Act 2010 (Vic)
Cases Cited:Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyd’s London [2011] VSC 370; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Ruling: For the defendants
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr Nicholas Jones | Norman Legal |
| For the First Defendant | Ms Victoria Blidman | McKay Law |
| For the Second Defendant | Ms Lucy Dawson | Lander & Rogers |
HIS HONOUR:
Introduction and background
1The plaintiff applied at the commencement of trial to further amend its Further Amended Statement of Claim (Statement of Claim). The trial of this proceeding has been fixed for 8-10 days. The first defendant by its counsel, Ms Blidman, submitted that the plaintiff’s written opening submissions travelled beyond the pleaded case and thus objected to the manner in which the plaintiff was proceeding, or intending to proceed, to run its case.
2Counsel for the plaintiff, Mr Jones, determined that in light of those criticisms the plaintiff needed to amend its Statement of Claim in order to run the case that it intended to run. As a consequence, the plaintiff put on a proposed Second Further Amended Statement of Claim. That document was exchanged between counsel and Ms Blidman objected to the amendment.
3Counsel for the second defendant, Ms Dawson, also objected on the basis that even though the amendments were directed primarily to the first defendant, if the amendments were allowed with the consequence that the trial was vacated, her client would also be prejudiced.
4I intend to refuse the application for the reasons which follow.
5I will not outline in this Ruling the amendments concerned in detail. They are reflected in the proposed Second Further Amended Statement of Claim which will be placed on the court file.
6Fundamentally, the amendments concern the allegations of the way in which the retainer alleged by the plaintiff against its former solicitors, the first defendant, came about; the scope of that retainer; and certain allegations of breach. Although Ms Blidman articulated nine complaints with the plaintiff’s written opening dated 22 February 2024, as argument developed, the complaints focused on two primary documents that the plaintiff now wishes to plead.
7They are, firstly, an email dated 21 February 2014 (CB 990), which purports to have been written by a solicitor of the first defendant to a representative of the plaintiff. It purports to follow a conversation between the solicitor and the plaintiff’s representative and serves to provide secondary evidence of that conversation. The first defendant disputes the authenticity of that document and says that the email was not sent from the first defendant as it appears on its face.
8The second is a document purporting to be an instruction in writing from a representative of the plaintiff authorising the first defendant to take instructions on behalf of the plaintiff from a Mr Abdul R Syed (CB 893).
9The first defendant says that this document was not provided to the first defendant at all and, as a consequence, disputes its authenticity.
Principles
10The principles upon which an application to amend a Statement of Claim close to, or during the course of, a trial are not in dispute. They were conveniently set out by J Forrest J in UltraThoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyd’s London.[1] At paragraphs 4 to 9, his Honour said:
[1] [2011] VSC 370.
“4.The power to grant an amendment to the particulars is contained in Order 36, Rule 1(1) which relevant parts read as follows:
For the purpose of
(a)determining the real question and controversy between the parties to any proceeding the court may at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.
5.The authorities relevant to an application such as this are well-known; I mention a few: … Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.”
6.With the decision in Aon the High Court has emphasised that applications such as these should not be granted without appropriate judicial scrutiny and should not be granted as a matter of course. In Aon, the High Court held as follows, …
(a)courts must now consider the wider public interests and the efficient use of limited court resources when deciding whether to grant applications to amend pleadings;
(b)parties will not be permitted to raise any arguable case in any stage of proceedings subject only to payment of costs; and
(c)amendments that produce delay impact on the entire court system and affect parties desirous of utilising that particular court system.”
7.In Aon, the High Court said:
An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases…
A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to the parties having a sufficient opportunity to identify the issues they seek to agitate.
In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.”
8. Aon demonstrates that there are a number of factors relevant to an application such as this. For instance:
(a)whether there will be a substantial delay caused by the amendment;
(b)the extent of any wasted costs;
(c)whether there is an irreparable element of unfair prejudice caused by the amendment;
(d)concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e)whether the grant of the amendment will lessen public confidence in the judicial system; and
(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.”
9.It is, however, to be remembered that the primary question still remains: what do the interests of justice dictate? Aon reminds us that the prism through which these interests are viewed is wider than just that of the moving party.”
11I also note that the Civil Procedure Act 2010 (Vic) requires the parties and their practitioners to comply with the overarching obligations set out, including that those in s25, which reads as follows:
“For the purpose of ensuring the prompt conduct of a civil proceeding, a person to whom the overarching obligations apply must use reasonable endeavours in connection with the civil proceeding to—
(a) act promptly; and
(b) minimise delay.”
Analysis
12I will now deal with the each of the considerations that arise in this case.
The nature of this application
13Although this is not a new claim being agitated for the first time by the plaintiff (as was the case in Aon), the proposed amendments do make a fundamental change to a fundamental part of its claim. The basis of its claim is that of a breach of retainer by the first defendant, its former solicitors, and the second defendant, another of its former solicitors. Alternatively, a breach of those solicitors’ duties of care.[2]
[2] There are ancillary claims with which I do not need to deal on this application.
14Fundamental to its claim against the first defendant is the nature of the retainer, how it came about, what its scope is, and the breaches alleged.
15In now articulating a more expanded scope of the retainer and duties to be performed by the solicitors, and in relying upon conversations and documents not previously pleaded in respect of those matters and as to the establishment of the retainer, I am of the view that the plaintiff is fundamentally changing the nature of its case.
16To the extent that the first defendant has not had notice of this pleaded change until the first day of trial, it is my view that the first defendant is taken by surprise.
17Mr Jones submitted that the documents concerned were known to the defendants before the first day of trial, and thus they are not truly taken by surprise.
18I do not accept that submission. It is one thing for a party to know that a document has been discovered or exists. It is another thing to know that the plaintiff intends to plead its case in reliance upon those documents such that the defendant is given a fair opportunity to consider how it will meet that allegation, how to marshal its own evidence to meet the allegation, and to determine whether, and if so, how to cross-examine in respect of it. That is the fundamental reason for pleadings – so that parties can join issue on the allegations to be made and to avoid the other party being taken by surprise.
When the application was made
19This application is made on the first day of trial. This is not the first trial that has been allocated for this case. There have been no less than five trial dates allocated which have each been vacated.
20Ms Blidman submitted that each of those trial dates was vacated at the instance of the plaintiff or, at least, was caused by some default of the plaintiff.
21Mr Jones did not submit otherwise.
22This is an entirely unsatisfactory state of affairs. As the High Court indicated in Aon, a plaintiff does not have an unfettered right to run any arguable case it chooses at any time.[3] Rather the plaintiff is entitled to a reasonable opportunity to run an arguable case that it wishes to run - but only in a timely fashion.
[3]At [105].
23Having regard to the lengthy procedural history of this case, and the fact that five prior trial dates have been set and vacated, the plaintiff has had more than a reasonable opportunity to run the case that it wished to run long before the first day of this trial. That it has not properly availed itself of this opportunity falls at its own feet.
24The lamentable procedural history of this case is set out in an affidavit of Sean McKay sworn 17 November 2022. I do not rehearse that history here. However, the progress of this case belongs to a time pre-Aon and prior to the Civil Procedure Act obligations.
25I also note and give significant weight to the fact that the plaintiff’s prior solicitor, Mr Mario Merlo of Melbourne Legal Chambers, swore an affidavit in this proceeding on 7 November 2022 in which, on behalf of his client, he sought to vacate the then fixed trial date for, amongst other reasons, the need to amend the plaintiff’s Statement of Claim.
26At paragraphs 27-33 of that affidavit, among other things, he noted that the authenticity of the 24 February 2014 email was disputed and in part, for that reason, sought leave to amend the Statement of Claim to plead that document and its import.
27In the events that occurred, Mr Merlo’s firm did file a Further Amended Statement of Claim on 7 June 2023. However, the 24 February 2014 email was not pleaded.
28Ms Blidman submitted that I should infer that the failure to have pleaded that document, in the absence of explanation and in that context, must be regarded as a forensic choice rather than an oversight.
29The submission is made with some force. However, I am not prepared to go that far without having heard from Mr Merlo. Notwithstanding that, I am prepared to find that the plaintiff has had ample opportunity to make the pleading that it now seeks to make, particularly in light of that affidavit of Mr Merlo, but did not avail itself of that opportunity.
30I am also acutely aware of the fact that the events in question occurred the best part of 10 years ago now and the claim was commenced in December 2019, that is, over four years ago. The risks attendant with yet further delay, including witnesses’ fading memories, should not be further exacerbated.
31Although Mr Jones submitted that the amendment was not made too late, principally on the basis that the first defendant, having been aware of the documents, was capable of dealing with the amendments in the running of a trial, he made no more particular submission in respect of the lateness of the amendment. He did submit that the history of the proceedings in the past is irrelevant to the discretion to be exercised by the court in determining whether to grant the amendment application or not. I reject that submission.
32Both the Civil Procedure Act obligations and the High Court dicta in Aon make it clear that parties do not get to make amendment applications as and when they choose, and that questions of appropriate and proper case management are important matters to be taken into account.
33In that context, the procedural history of this case, and probably all cases, is fundamentally to be taken into account. Indeed, as the High Court made clear, the days are long past where costs are regarded as the remedy for any such application.[4] Sections 8 and 9 of the Civil Procedure Act require this Court to take matters such as minimising delay and the efficient use of court resources as cardinal matters to be taken into account.
[4]Aon at [99].
Explanation for lateness of the application
34The High Court in Aon stressed the need for the party seeking an amendment to provide an explanation for the delay in doing so, in the absence of which, a court might infer that a forensic decision was made not to advance the amendment earlier.[5] Forrest J in Ultra Thoroughbred noted that an unsatisfactory explanation may nevertheless satisfy this requirement.[6]
[5]At [102]-[103].
[6]At [10(c)].
35Mr Jones’s instructing solicitor has put on an affidavit deposing to his conduct of the proceeding in the short time that he been on the record. I note that he has only been on the record since 1 February 2024, and lay no blame at his feet for what occurred before.
36While that affidavit explains why he has not taken steps prior to the first day of trial to make this application, it says nothing about the long procedural history in the past and the plaintiff’s dilatory conduct in prosecuting its claim.
37Ms Blidman submitted that the plaintiff itself had the opportunity overnight to provide evidence of why it did not take steps to advance this litigation, properly instruct its solicitors, and bring on the amendment application earlier in proper time. It did not do so. I accept that submission. I can only infer that the plaintiff itself has no proper explanation.
Prejudice
38Mr Jones submitted that if his client is not permitted to make this amendment as to a fundamental matter, it will be deprived of the opportunity to run a case that it should be permitted to run.
39Ms Blidman submitted that her client is prejudiced in two ways. Firstly, in respect of the 24 February 2014 email, the authenticity of which her client contests. She says that her client is deprived of the opportunity to have obtained expert evidence from a forensic IT specialist to determine whether the email which, on its face, seems to have been sent by her client, was in fact so sent. Second, she says that her client is prejudiced in having prepared its case on the basis of a particular state of affairs, as articulated in the pleadings on record. It is now unfair for her client to have to contend with a new case in the running.
40In my view, the prejudice suffered by the first defendant in respect of the 24 February 2014 email is sufficient in and of itself to cause the trial to be adjourned, if the amendments were permitted. The case is complex. There is a very large Court Book. The parties will be into evidence quite quickly. It is my view that the first defendant, having prepared a case of this length and complexity on a particular basis, ought not be required to recraft its own defence of the case on the run.
Delay
41It is my view that if this amendment were permitted, I would be obliged to vacate the trial date and have it refixed for some time in the future. Having regard to the fact that this case was commenced long ago, and that this is the sixth trial date fixed for this matter, I am unprepared to do that.
Interests of justice
42It must be steadily borne in mind that in determining this application I must take into account the interests of justice overall. The interests of justice extend beyond those of the parties. Having regard to the age of this case, the number of trial dates already fixed and vacated, the administration of justice would be brought into disrepute if a further trial date were vacated and the matter refixed into the future.
43Plaintiffs are entitled to bring proper claims against defendants. Defendants are brought to this Court against their own wishes. They are entitled to have the case against them heard efficiently and without undue delay. That has not occurred so far, and they should not be vexed with yet further delay.
44While the plaintiff’s interest is to run the case that it now wishes to pursue, it has had ample opportunity to advance that case but has not done so before this time. It only does so at the last moment and to the detriment and cost of the defendants.
45The defendants’ interest in having suffered five vacated trial dates already is to have this matter brought to a head and determined now and without further wasted cost and expense.
46There is the further matter of the utilisation of the court’s scarce resources. There are many litigants waiting to have their cases heard. This plaintiff has had many opportunities to have its case heard, which have gone off seemingly as a result of its own conduct. This matter also weighs heavily in my decision.
Conclusion
47For all of those reasons, I take the view that the interests of justice do not require that the amendment be permitted.
48I will therefore dismiss the application for leave to amend the Statement of Claim and the trial will proceed on the current pleadings.
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