Candibon Pty Ltd v The Honourable Justin Madden (In his capacity as Minister for Planning)

[2010] VSC 44

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 4637 of 2006

CANDIBON PTY LTD	Plaintiff
and
THE HONOURABLE JUSTIN MADDEN (IN HIS CAPACITY AS MINISTER FOR PLANNING) and THE STATE OF VICTORIA	Defendants

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JUDGE:	PAGONE J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 February 2010
DATE OF JUDGMENT:	19 February 2010
CASE MAY BE CITED AS:	Candibon Pty Ltd v The Honourable Justin Madden (In his capacity as Minister for Planning) and Anor
MEDIUM NEUTRAL CITATION:	[2010] VSC 44

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PRACTICE & PROCEDURE – Pleadings – Amendment – Application to add a claim and a party.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R. Brett QC Mr J. Manetta	Belleli King & Associates
For the Defendants	Mr M. Clarke	Victorian Government Solicitor

HIS HONOUR:

1. The plaintiff seeks orders under Rule 36 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) to amend its pleadings by joining Robert Maclellan as a party and by amending the statement of claim to add a claim in deceit. This has been sought by summons dated 3 February 2010 in a proceeding which is set down for hearing to commence on 1 March 2010. The parties agree that the hearing date will need to be vacated if leave is granted either to add Mr Maclellan as a party or to add the deceit claim.

1. Rule 36.01 gives the court a discretion to permit a party to amend its pleadings for the purpose of determining the real question in controversy between the parties and to avoid multiplicity of proceedings. The plaintiff contended that I should exercise the discretion in its favour because the matters raised by the proposed deceit pleading against Mr Maclellan and through him against the State of Victoria are part of the real question in controversy. This is said to be the case for two reasons. First because the existing pleading already makes a controversy about whether statements were ever made by Mr Maclellan when he was the relevant Minister. Part of that controversy is whether he knew those statements to be untrue. On that basis it was contended, with some force, that the real question in controversy includes the extent to which the Minister should have been aware of the falsity of the claims and, as is contended in the written submissions filed by counsel for the plaintiff, "the proposed deceit pleading simply raises another aspect of that question by alleging that the Minister either was actually aware that they were false or did not care whether they were true or false." Secondly, it was contended that the plaintiff's discovery correspondence with the defendants squarely raised the question of whether the Minister always contemplated the events which unfolded and, it is said, the defendants had never questioned the relevance of the documents sought.

1. I have substantial reservation about whether the proposed pleading in deceit is capable of being maintained in its present form without amendment.  However, it was urged upon me that I should consider the matter more generally and that any defect in the pleading should, if at all, be dealt with by a separate strike out application.  The form of the order sought in the summons in this regard is for the plaintiff to be given leave to file and serve an amended statement of claim in the form of a particular draft.  I therefore have reservations about whether I should grant leave if not satisfied that the pleading is sufficient to found a cause of action in the form in which my order would have it filed and served.  The parties, however, argued the proceedings before me on the broader basis, and notwithstanding my reservations, I will deal with the proceeding on a footing that the summons seeks leave to add a pleading in deceit against Mr Maclellan and through him against the existing defendants.  I will deal with the application on that basis also because it became clear by the end of argument that I would need to consider whether to give leave to amend the pleading separately from whether Mr Maclellan should be joined as a party.  In other words, I was asked to consider whether I would grant leave to the plaintiff for the statement of claim to be amended to allege deceit vicariously actionable against the State of Victoria, even though the former Minister may not be made a party.  If I were to decide on that basis the statement of claim would need to be in a different form from the one referred to in the summons in any event.

1. The explanation for the application being made at this stage in the proceeding is said to arise from three circumstances.  The first is the recent discovery of a Council resolution suggesting to the plaintiff and its advisors that Mr Maclellan was consciously involved in the conduct of which the plaintiff complains.  In that regard the plaintiff's proposed particulars assert as follows:

In or about December 1997, and in anticipation of the Minister acquiring Greenhills, the Council resolved to engage external consultants to undertake a feasibility study for the establishment of a motorsports facility on a portion of the Southern Parcel.  Council simultaneously directed its steering committee for the study to develop a management plan to take advantage of opportunities for commercial development.

This note has only recently come to the attention of the plaintiff and is relied upon as one of the circumstances in combination with many others from which an inference is said to be available that by 17 March 1998 the Minister himself regarded portions of the southern parcel as potentially available for commercial development contrary to what the plaintiff had been told.

1. The second circumstance relied upon for the present application is that only recently those advising the plaintiff deduced from material previously available that a reference to two parcels of land must have included the land in dispute, notwithstanding assertions to the contrary in the course of preparation of this case.  This is not a new circumstance except insofar as the deduction is recent.  The third circumstance relied upon is the recent completion of inspection of the former Minister's personal files from which those advising the plaintiff had felt confident that they could exclude an innocent explanation for what they now wish to contend was deceitful.

1. An application by a party to amend its cause of action must always be taken seriously because a court should not lightly deny a party the ability to maintain an asserted right, especially where the denial would occur by the court's exercise of discretionary powers.  A discretion to allow or not to allow an amendment affecting rights requires careful consideration and a balancing of competing interests.  The defendants contended that I should not make the orders sought because the plaintiff's delay has not adequately been explained, and because granting the orders would occasion delay, vacation of the hearing date, additional discovery and further expense.  The plaintiff's claim in favour of the amendment is said largely to be the enlivening of a cause of action of issues already in dispute.  I would be minded to grant the application to add the claim in deceit if it were merely a formal amendment adding a cause of action and would not require further discovery or other procedural or interlocutory steps before hearing.  However, both sets of counsel tell me that the matter cannot proceed without further work being done if either amendment is permitted.  A court is not well placed to second guess the judgment of responsible counsel who express to the court their opinion that in their judgment they need to take those steps.  Such submissions by counsel should not be made lightly to a court and when made responsibly ought to be taken into account as an important factor in the exercise of discretion.  In this case both counsel agree that the amendments will occasion further work and delay.

1. It is incumbent on the applicant in such an application as the present to satisfy me that the amendment is for the purpose of determining the real question in controversy between the parties.  The plaintiff has not satisfied me on this occasion that the discretion ought to be exercised in the plaintiff's favour.  It is true that the proposed amendment would seek to enliven a cause of action in deceit and that, to that extent, it would put in issue in a proceeding the honesty of the Minister.  However, as the written submissions filed for the plaintiff candidly, and correctly, say the “proposed deceit pleading simply raises another aspect” of the question plainly raised already in the pleading, namely, the extent to which the Minister should have been aware of the alleged falsity of the statements pleaded.  The amendments sought so close to the trial and conceded by both parties to have an impact upon the conduct of the proceeding will, in my assessment of the material, have an adverse effect which is disproportionate to its potential advantage to the plaintiff.  I can see little practical advantage in the amended pleading and none has been shown to flow through to the quantum or claim of damages or other relief. 

1. A defendant is entitled to expect reasonable expedition in having allegations against it heard and determined.  It is in the public interest, and in the interest of litigants, and particularly of those who must respond to claims, for claims of rights in law against parties to be resolved and determined.  The disputes, claims and contentions in this proceeding are due to be resolved in a hearing scheduled to commence in a few weeks time.  The parties are entitled to look to that occasion for the resolution and finalisation of claims that are unresolved and need resolution.  The current pleading, without the proposed amendment, engages the issues in dispute by raising the real issues in controversy without any substantial gain by an additional cause of action in deceit being tacked on.  In my assessment of the material before me, the loss of a proximate hearing date to determine, resolve and finalise the contention between the parties being so close in time to the application now made, added to the additional expense and delay that would be occasioned by the further discovery said to be required by reason of the way in which some relatively minor aspects of the pleading will be recast, outweighs the justifications in favour of the amendment sought.

1. It follows from this conclusion that I will also not allow the joinder of Mr Maclellan as a party.  That follows from the circumstance that I will not allow an amendment to raise the alleged deceit.  In any event, I would not have allowed the joinder of Mr Maclellan as a party even if I had been minded to allow the amendment of the pleading to add a claim in deceit.  That is because the disadvantage of his joinder far outweighs any justification for his joinder.  In this case a pleading of deceit can be made for which the State of Victoria would vicariously be liable.  The State accepts that it would be vicariously liable if such a claim were made out and I can see no reason why Mr Maclellan should be put personally to the burdens of personal litigation in such circumstances.  His participation in the proceedings would compel him to respond to claims which the State can and must do, and has the primary economic interest in doing.  I am informed that he is aware of the current application before me and has shown no eagerness to be a party to respond to the allegations made against him personally.  Any award against him would be met by the vicarious liability of the State and, all in all, his participation as a party (if unsought by him) would be a net burden with no demonstrated benefit to anyone. 

1. Accordingly I dismiss the summons and order the plaintiff to pay the costs of the defendants of the summons.