Commonwealth of Australia v International Air Aid Pty lTD
[1994] FCA 614
•2 Sep 1994
IN THE FEDERAL COURT OF AUSTRALIA )
)
AUSTRALIAN CAPITAL TERRITORY )
) No. ACT G 66 of 1989
DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN: COMMONWEALTH OF AUSTRALIA
Applicant
AND: INTERNATIONAL AIR AID PTY LTD
First respondent
PETER WILLIAM HOCKING
Second respondent
PETER HOYTE CHAVE COMMINS
Third respondent
MINUTE OF ORDER
JUDGE MAKING ORDER : Neaves J.
DATE OF ORDER : 2 September 1994
WHERE MADE : Canberra
THE COURT ORDERS THAT:
The motions on behalf of the second and third respondents under Order 20, rule 2 of the Federal Court Rules be dismissed.
The second and third respondents pay the applicant's costs of and incidental to those motions.
The applicant have leave to file and serve not later than 28 September 1994 a further amended statement of claim which may plead, as against the second and third respondents, causes of action in fraudulent misrepresentation and negligent misstatement, such leave being subject to the qualifications -
(i)that the applicant acknowledges that the proceeding, in so far as those causes of action against the second and third respondents are concerned, is to be deemed to have been instituted on 23 February 1993, thus permitting the second and third respondents, if so advised, to rely by way of defence to such causes of action upon the expiration of the relevant limitation period prior to that date; and
(ii)that, if a further amended statement of claim is filed and served, it contain, or be accompanied by, amended particulars of all amounts pleaded, giving details of the respects in which the amounts so pleaded differ from those pleaded in the amended statement of claim filed on 10 October 1990 and those given in the responses by the applicant to the requests for particulars made by the respondents by letters dated 27 July 1990.
The applicant pay the respondents' costs of the motion for leave to amend further the amended statement of claim filed on 10 October 1990 and the respondents' costs thrown away by reason of the further amendment thereof.
The matter be listed for a directions hearing on 7 October 1994.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
AUSTRALIAN CAPITAL TERRITORY )
) No. ACT G 66 of 1989
DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN: COMMONWEALTH OF AUSTRALIA
Applicant
AND: INTERNATIONAL AIR AID PTY LTD
First respondent
PETER WILLIAM HOCKING
Second respondent
PETER HOYTE CHAVE COMMINS
Third respondent
CORAM: Neaves J.
DATE: 2 September 1994
REASONS FOR JUDGMENT
Before the Court are three motions in a proceeding between the Commonwealth of Australia ("the applicant") and International Air Aid Pty Ltd ("the first respondent"), Peter William Hocking ("the second respondent") and Peter Hoyte Chave Commins ("the third respondent"). The second respondent and the third respondent who are separately represented, have moved for orders pursuant to Order 20, rule 2 of the Federal Court Rules that the proceeding be dismissed as against them. The third motion is a motion by the applicant for an order pursuant to Order 13, rule 2 of those Rules granting leave to amend the amended statement of claim filed in the proceeding on its behalf.
Although the proceeding was commenced as long ago as 13 December 1989, progress in preparing the matter for trial has been slow. This has been due to a variety of factors, one of the most significant being the circumstance that, over a considerable part of the intervening period, criminal proceedings were pending against the second and third respondents arising out of the same matters that form the basis of the claims the subject of the proceeding in this Court. Another significant factor has been the conduct of lengthy negotiations between the parties in an attempt, ultimately unsuccessful, to resolve their differences.
By the application which was filed on 13 December 1989 the applicant seeks the following relief:
"1.From each Respondent, damages at common law and interest thereon pursuant to section 51A of the Federal Court Act 1976;
2.From each Respondent, damages pursuant to section 82(1) of the Trade Practices Act 1974 and interest thereon pursuant to section 51A of the Federal Court Act 1976; and
3.From the First Respondent, the sum of $407,027.60 and interest thereon pursuant to section 51A of the Federal Court Act 1976."
The application was accompanied by a statement of claim. However, on 22 February 1990 an amended statement of claim was filed pursuant to Order 13, rule 3(1) of the Federal Court Rules.
By letters respectively dated 27 July 1990, the solicitors for the first and second respondents and the solicitors for the third respondent sought further and better particulars of the claim against their respective clients. In replying to those requests on 7 September 1990, the applicant's solicitor informed the respondents that it was proposed to make a number of amendments to the amended statement of claim filed on 22 February 1990 and sought their consent to the filing of a further amended statement of claim. Consent was given and on 10 October 1990, the further amended statement of claim was filed pursuant to Order 13, rule 3(2) of the Federal Court Rules.
The amended statement of claim filed on 10 October 1990 alleges that, by a contract in writing dated 10 February 1986 entitled "Agreement for Professional Services Relating to Provision of Hercules Aircraft to Ethiopia" and made between the applicant and the first respondent, the first respondent agreed to provide the applicant with certain services in connection with the provision by the applicant to the Government of Ethiopia of the services of a Hercules C130A aircraft. The terms of the agreement are not before the Court.
It is alleged in the amended statement of claim that at all material times the second and third respondents were directors of the first respondent.
It is further alleged that between 23 December 1985 and 18 February 1986 the first respondent, representing that the supplies were required to enable it to execute the contract, requested certain supplies from the applicant; that the first respondent made the representations in order to induce the applicant to transfer the supplies to the first respondent; that, acting on the faith of the representations and in the belief that they were true, the applicant transferred to the first respondent the supplies requested; and that the total value of the supplies transferred (including the cost to the applicant of supplying the same) was $225,592.77.
The further allegation is made that, between about 23 December 1985 and about 15 July 1986, the first respondent submitted to the applicant claims for payment pursuant to the contract, such claims totalling $1,302,359.05. Paragraph 5 of the amended statement of claim gives particulars of the claims for payment submitted to the applicant by the first respondent. The date and amount of each claim is as follows:
30 January 1986 $337,384.00
January 1986 2,749.80
7 March 1986 168,472.00
7 March 1986 233,965.26
20 March 1986 321,529.00
10 April 1986 185,521.28
26 May 1986 45,948.07
28 May 1986 6,789.64
$1,302,359.05
The first respondent is alleged to have represented to the applicant by each of the claims that expenditure to the value stated in the claim had in fact been incurred or that work to the value stated in the claim had in fact been carried out. The applicant asserts that the first respondent made the representations in order to induce the applicant to pay to the first respondent the amount stated in each of the claims; and that, by reason of those representations and acting on the faith of them and in the belief that they were true, the applicant, during the period from about 23 December 1985 to about 18 July 1986, paid to the first respondent the amount of $1,296,859.25.
In the particulars provided by the applicant in answer to the requests made by the respondents the following details appear as to the payments totalling $1,296,859.25 alleged to have been made by the applicant to the first respondent:
"Date on cheque Cheque no. Amount #
30 Dec 1985 06027862 $550,000.00 (1)
12 Feb 1986 06114094 334,634.00 (2)
14 Mar 1986 06175540 150,000.00 (3)
18 Apr 1986 06247782 209,487.54 (4)
23 Jun 1986 06408684 33,110.71 (5)
18 Jul 1986 06454821 19,627.00 (6)
TOTAL 1,296,859.25"
The particulars provided also contain the following statement:
"....the nature of the Applicant's claim is that certain amounts were, over the course of all of the claims for payment referred to in paragraph 5 of the Statement of Claim, claimed in respect of certain types of work and in respect of certain types of supplies, being amounts that in total were greater than that which had been incurred by the First Respondent in respect of that type of work or that type of supply, respectively. It is not possible to ascribe to the individual claims for payment referred to in paragraph 5 of the Statement of Claim the amount by which the claimed amount in respect of a particular type of work or in respect of particular supplies exceeded the amount that had actually been incurred in respect of that particular type of work or in respect of those particular supplies. What can be provided, and which appears in Table 2 annexed hereto, is an apportionment of the total amount claimed by the Applicant according to the type of work and to the type of supply."
Details of the types of expenditure in respect of which the applicant alleges that false and untrue representations were made and the amount in respect of each of the types of expenditure by which the amount that was represented to have been incurred by the first respondent in respect of that type of expenditure exceeded the amount actually incurred by the first respondent, as set out in Table 2 annexed to the particulars provided, may be summarised as follows:
Principals $2,001.00
Aircrew 8,095.60
Engineering management
and supervision 3,375.00
Overseas representation,
registration and parts
procurement 16,500.00
Laverton preparation; initial
flight to Richmond; ground
engineers 44,800.00
Richmond preparation and
overhaul 76,600.00
Head office: contract
administration 10,937.00
Aircraft registration 80,678.00
Warehouse: spares
provisioning 9,418.00
Short term conditions: air
fares 71,503.00
Other project-related costs:
short term 11,550.00
Aircraft overhaul 77,257.00
Air task equipment 9,505.00
Freight on spare parts 6,279.00
Landing and handling charges 8,594.00
Aircraft jack 6,826.00
Aircraft start cart 18,116.00
Total $462,034.60
It is further alleged that the representations were, and each of them was, false and untrue and, in particular, that the first respondent had not incurred expenditure or carried out work to the value of the amounts stated in each of the claims but had incurred expenditure or carried out work of substantially less value, namely to the value that for all of the claims totalled no more than $834,824.65. It is further alleged that, at the time the representations were made, the
first respondent knew them to be false and untrue or made them recklessly not caring whether they were true or false. The applicant claims that, by reason of the false and untrue representations, it has suffered damage in an amount of $462,034.60 described as the difference "between the claimed amount and the value of the expenditure incurred and the work done" and an amount of $12,274.63 described as "[t]he costs of ascertaining that difference". The amount of $462,034.60 is wrongly described. It should be referred to as the difference between the amount paid to the first respondent, namely $1,296,859.25, and the value of the expenditure incurred and the work done, namely $834,824.65. It may be assumed that the sum of the amounts of $462,034.60 and $12,274.63, namely $474,309.23, is intended to be substituted for the amount of $407,027.60 referred to in par.3 of the relief sought in the application filed on 13 December 1989.
The claim against the first respondent is pleaded in a number of alternative ways. The causes of action relied upon as against that respondent may be shortly stated as being for misrepresentation, for negligent misstatement, for contraventions of ss.52 and 53 of the Trade Practices Act, for breach of contract and for the recovery of money paid under a mistake of fact or, alternatively, without authority of law. The relief sought against the second and third respondents is solely on the basis that they were involved, within the meaning of s.75B of the Trade Practices Act, in the
contraventions by the first respondent of ss.52 and 53 of that Act.
On 8 October 1990, a defence to the amended statement of claim as proposed to be further amended was filed on behalf of the third respondent. On 2 November 1990 separate defences to the amended statement of claim filed on 10 October 1990 were filed on behalf of the first and second respondents. The defences filed on behalf of the respondents did not plead that the applicant's claim, or any part of it, had been brought outside the relevant limitation period. On 1 March 1991, an amended defence to the amended statement of claim filed on 10 October 1990 was filed on behalf of the third respondent. On 8 March 1991, separate amended defences to the amended statement of claim filed on 10 October 1990 were filed on behalf of the first and second respondents. Again, the amended defences filed on behalf of the respondents did not plead that the applicant's claim, or any part of it, had been brought outside the relevant limitation period.
On 3 April 1992, the first respondent, by leave of the Court, filed a cross-claim against the applicant claiming sums totalling $173,618.33. A defence to the cross-claim was filed on 10 April 1992.
On 1 May 1992, the Court directed that the hearing of the matter commence on 13 July 1992. On 29 June 1992, however, the third respondent sought, and was granted, leave to file a further amended defence to the amended statement of claim filed on 10 October 1990, the proposed amendment raising a defence based on the relevant limitation period. Leave was also given to the first and second respondents to further amend their respective amended defences if so advised. The hearing date of 13 July 1992 was vacated and further directions for the preparation of the matter for hearing were given.
The further amended defence of the third respondent was filed on 7 July 1992. It included the following paragraphs:
"12.Further and in the alternative to the foregoing, as to the whole of the Amended Statement of Claim the third respondent says:
(a)That any cause of action pleaded against the first respondent, and relied upon by the applicant against the first respondent, arose prior to 12 December 1986 and any claim as aforesaid by the applicant against the first respondent is barred by reason of the provisions of s.82(2) of the Trade Practices Act 1974;
(b)Any claim for damages based upon a cause of action alleged to arise against him by reason of contraventions of provisions of the Trade Practices Act 1974 is barred by reason of the provisions of s.82(2) of the Trade Practices Act because any such cause of action arose before 12 December 1986;
(c)That the whole of the claim for damages by the applicant against the third respondent is barred by reason of the provisions of s.82(2) of the Trade Practices Act.
13.In answer to the whole of the Amended Statement of Claim the third respondent denies that the applicant is entitled to recover, and says that the applicant is barred from recovering any damages as claimed or at all."
The first and second respondents have not filed further amended defences pursuant to the leave granted on 29 June 1992.
The applicant has filed no reply to the further amended defence of the third respondent filed on 7 July 1992.
The third respondent subsequently gave notice of the motion that is presently before the Court seeking an order pursuant to Order 20, rule 2 of the Federal Court Rules that the proceedings against him be dismissed. Order 20, rule 2 of the Federal Court Rules provides:
"(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding:
(a)no reasonable cause of action is disclosed;
(b)the proceeding is frivolous or vexatious; or
(c)the proceeding is an abuse of the process of the Court;
the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.
(2)The Court may receive evidence on the hearing of an application for an order under subrule(1)."
During the hearing of that motion, counsel for the second respondent, notwithstanding the absence of any defence on behalf of his client raising the issue, informed the Court that his client wished to raise such a defence and sought to move the Court for a similar order to that sought by the third respondent and to do so under Order 19, rule 2 of the Federal Court Rules without filing notice of the motion. As the applicant raised no objection to the Court entertaining such a motion on behalf of the second respondent, the Court dispensed with the requirements of filing and serving notice of the motion. Thereupon, counsel for the second respondent moved that the proceeding against his client be dismissed pursuant to Order 20, rule 2. In support of that motion, he adopted the submissions of counsel for the third respondent.
Section 82 of the Trade Practices Act provides:
"(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
(2) An action under subsection (1) may be commenced at any time within 3 years after the date on which the cause of action accrued."
Counsel for the third respondent submitted that, in a case such as the present where the claim is for economic loss, the time at which a cause of action under s.82 accrues is to be determined by reference to the time at which loss or damage was first suffered in consequence of the alleged breach of a provision of Part IV or V of the Act; that, in the present case, the relevant loss or damage as pleaded was suffered, at the latest, when the last of the payments by the applicant to the first respondent was made, namely on 18 July 1986; and that the cause of action had accrued at a date earlier than 13 December 1989 and thus, the present proceeding was not commenced until after the period of limitation prescribed by s.82(2) had expired.
Counsel for the applicant informed the Court that the applicant proposed to contend that, in the particular circumstances of this case, the cause of action under the Trade Practices Act did not accrue until, at the earliest, March 1987. The basis for that contention was that the applicant did not become aware until that time that the representations made by the first respondent were false and untrue and, in consequence, did not become aware until that time that it had suffered loss or damage in consequence of the conduct on the part of the first respondent that was misleading or deceptive and thus in contravention of s.52 of the Act.
In reply, counsel for the third respondent drew attention to the absence of any pleading by the applicant of the facts upon which its contention was based and confirmed that the correctness of the factual material to which counsel for the applicant had referred was disputed. He further submitted that, in determining the date of accrual of a cause of action under s.82 of the Trade Practices Act based on a contravention of s.52 of that Act, awareness on the part of the applicant of the misleading or deceptive nature of the conduct relied upon is not a relevant factor, the crucial factor being when the loss or damage was first suffered. Knowledge that loss or damage had been suffered was equally an irrelevant consideration.
To succeed upon the motions under Order 20, rule 2 of the Federal Court Rules, the second and third respondents must establish either that the amended statement of claim filed on 10 October 1990 discloses no reasonable cause of action or that the proceeding is frivolous or vexatious or an abuse of the process of the Court. While it may be accepted that, on the material at present before the Court, they have an arguable, even a strongly arguable, case that the cause of action based on s.82 of the Trade Practices Act, as pleaded against them, was statute-barred at the time the proceeding was instituted, the second and third respondents have not established that the case is so clear that the Court should, at this stage and in the absence of a full hearing of the merits, dismiss the proceeding as against them: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at pp.533-4.
The motions on behalf of the second and third respondents are, therefore, dismissed with costs.
I turn now to the applicant's motion for leave to further amend the amended statement of claim filed on 10 October 1990. Notice that the applicant proposed to move the Court for such leave was given to the respondents on 23 February 1993. With that notice a copy of the proposed further amended statement of claim was provided to each of the respondents. The document provided did not indicate on its face how it differed from the amended statement of claim filed on 10 October 1990 but a comparison of the two documents shows that the amendments proposed are substantial and affect almost every paragraph of the earlier document. The amendments introduce additional causes of action. Further, as to the facts relevant to the loss or damage alleged to have been suffered by the applicant by reason of each of the causes of action relied upon, the proposed document departs not only from what was stated in the amended statement of claim filed on 10 October 1990 but also from the detailed particulars furnished by the applicant in response to the requests for particulars made by the respondents by letters dated 27 July 1990. The document also contains a number of errors.
The most significant of the amendments proposed are those which plead for the first time as against the second and third respondents causes of action for fraudulent misrepresentation and negligent misstatement in terms similar to those in which the corresponding causes of action were pleaded against the first respondent in the amended statement of claim filed on 10 October 1990. The fraudulent misrepresentations and negligent misstatements are said to have been made in relation to the claims for payment (totalling $1,302,259.05) submitted by the first respondent to the applicant between 23 December 1985 and about 15 July 1986. The amendments remove any doubt that may have arisen on the earlier document that the misrepresentations alleged to have been made by the first respondent were made fraudulently.
In the proposed amended document the allegation is also made that the second and third respondents, as well as the first respondent, made the representations that the supplies totalling in value $225,592.77 to which reference has already been made were required to enable the first respondent to execute the contract dated 10 February 1986 and that the second and third respondents so acted in order to induce the applicant to transfer those supplies to the first respondent.
The proposed amended document is not internally consistent and differs from the amended statement of claim filed on 10 October 1990 or the particulars provided thereunder in the following respects:
.the amounts paid by the applicant to the first respondent are said to have totalled $1,302,359.05, the amount alleged in the earlier document being $1,296,859.25;
.the expenditure incurred and the value of the work performed by the first respondent are said to have totalled no more than $956,320.05, the total alleged in the earlier document being $834,824.65;
.the amount by which the total of the amounts represented to have been incurred by the first respondent exceeded the total amount actually incurred is said to have been $346,039.00 although the individual amounts set out in the amended document total only $345,979.00, the particulars previously provided showing the amount as $462,034.60;
.the cost of ascertaining the difference between the relevant amounts is said to have been $12,000, the earlier amended statement of claim showing $12,274.63;
.the expenditure represented to have been incurred and the value of the work represented to have been carried out by the first respondent are said to have totalled $1,527,951.82, the amount previously shown being $1,522,452.02;
.the total of the actual expenditure incurred and the value of work done is shown as having been no more than $1,181,912.82, the amount previously shown being $1,060,417.42.
The basis upon which the amounts referred to in the proposed amendments have been ascertained is not apparent on the face of the document or from the material otherwise before the Court.
It may also be noted that par.22 of the proposed amended statement of claim alleges that the sum of $1,302,359.05 was paid by the applicant to the first respondent on the basis that the first respondent had incurred expenditure and carried out work to the value of that amount but that the actual expenditure incurred and the value of the work carried out totalled no more than $1,181,912.82. The difference between those amounts is $120,346.23 yet the paragraph claims the sum of $346,039.00.
On the date on which notice of the proposed further amended statement of claim was given to the respondents (23 February 1993) and on the date on which the applicant's motion was heard (21 September 1993), Order 13, rule 2 of the Federal Court Rules relevantly provided:
"2. (1) The Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit.
(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings."
Counsel for the applicant submitted that leave should be granted as the proposed amendments were based on the same substratum of facts on which the earlier document was based and that the amendments were necessary in order that all the issues to which those facts gave rise could be determined in the same proceeding. It was submitted that the applicant was not acting mala fide, that the amendments proposed were not futile and that the respondents could be compensated by an appropriate order for costs for any prejudice suffered by reason of the amendments being allowed.
Counsel for the third respondent opposed the granting of leave. He submitted that each of the additional causes of action sought to be pleaded against the third respondent was statute-barred at the time notice of the
proposed amendments was given (23 February 1993), the relevant limitation period being that prescribed by s.11 of the Limitation Act 1985 (ACT), namely the period of 6 years running from the date on which the cause of action first accrued. The date on which each of the additional causes of action first accrued was said to have been the date on which the last of the payments by the applicant to the first respondent was made, namely 18 July 1986. It was submitted that, in those circumstances, there was no power in the Court to permit the relevant amendments.
Counsel for the second respondent also opposed the granting of leave.
For the applicant, it was submitted that the relevant limitation period had not expired prior to notice being given to the respondents of the proposed additional causes of action against the second and third respondents. Counsel foreshadowed an intention to rely on factual material which would show that the relevant causes of action did not accrue until March 1987 or which might, in the alternative, bring into operation s.33 of the Limitation Act. That section provides that, where the cause of action is based on fraud or deceit or a fact relevant to the cause of action is deliberately concealed, the time which elapses after a limitation period fixed by or under the Act commences to run and before the date on which the person having the cause of action first discovers, or may with reasonable diligence discover, the fraud, deceit or concealment, does not count in the reckoning of the limitation period for an action on the cause of action by him or her against a person answerable for the fraud, deceit or concealment.
In reply, counsel for the third respondent sought to demonstrate from the material before the Court that, even if it were appropriate to have regard to the time at which the applicant discovered, or could on reasonable inquiry have discovered, the relevant facts, the limitation period had nonetheless expired prior to 23 February 1993.
The submission by counsel for the third respondent that the Court has no power to permit the proposed amendments adding additional causes of action depends, of course, upon the so-called rule in Weldon v Neal (1887) 19 QBD 394. The effect in this Court of that so-called rule has been the subject of debate and differing opinions. But, whatever may have been the power of the Court under s.59 of the Federal Court of Australia Act 1976 (Cth) and Order 13, rule 2 of the Federal Court Rules in the form in which they stood at the time of the hearing of the applicant's motion, the power of the Court is now governed by subs.59(5B) of that Act (a provision inserted by s.43 of the Law and Justice Legislation Amendment Act 1994 (Cth)) and the amendments to Order 13, rule
2 effected by Statutory Rules 1994 No.279. Subsection 59(2B) provides:
"(2B)The Rules of Court may make provision for:
(a)the amendment of a document in a proceeding; or
(b)leave to amend a document in a proceeding;
even if the effect of the amendment would be to allow a person to seek a remedy in respect of a legal or equitable claim that would have been barred because of the expiry of a period of limitation if the remedy had originally been sought at the time of the amendment."
Order 13, rule 2 now relevantly provides:
"2. (1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit.
(2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings.
(3) Where an application to the Court for leave to make the amendment mentioned in subrules (4), (5), (6) or (7) is made after any relevant period of limitation current at the date of commencement of the proceeding has expired, the Court may, nevertheless, grant such leave in the circumstances mentioned in that subrule if it thinks it is just to do so.
....
(7) An amendment may be made notwithstanding that the effect of the amendment will be to add or substitute a new claim for relief or another foundation in law for a claim for relief if the new claim for relief or foundation in law for that claim arises out of the same facts or substantially the same facts as those already pleaded to support existing claims for relief by the party applying for leave to make the amendment."
No doubt, a strongly arguable case can be made that the limitation period in respect of each of the proposed additional causes of action had expired before notice was given to the respondents of the proposed amendments. The situation is, however, that it is not possible, on the material before the Court, to make a definitive finding on the question.
The power of the Court to permit the amendment of pleadings is very wide. It has been said that an amendment should only be refused where bad faith is demonstrated or where the consequential injury or prejudice to the other party is incapable of remedy: see the general discussion in Londish v Gulf Pacific Pty Ltd (1993) 45 FCR 128 at pp.139-141.
On balance, I have reached the conclusion that the applicant should have leave to amend further the amended statement of claim filed on 10 October 1990 in order that all issues arising between the parties be resolved in the same proceeding. Leave will thus extend to the pleading, as against the second and third respondents, of causes of action in fraudulent misrepresentation and negligent misstatement. Leave is granted, however, subject to two qualifications. The first is that leave is granted conditionally upon the applicant acknowledging that the proceeding, in so far as the causes of action against the second and third respondents in fraudulent misrepresentation and negligent misstatement are
concerned, is to be deemed to have been instituted on 23 February 1993, thus permitting the second and third respondents, if so advised, to rely by way of defence to such causes of action upon the expiration of the relevant limitation period prior to that date.
The second qualification is this. In the light of the comments made earlier in this judgment in relation to the proposed further amended statement of claim a copy of which was provided to each of the respondents with notice of the applicant's motion presently before the Court, I am not prepared to give leave for that document to be filed. It clearly requires further refinement notwithstanding that it is the fourth attempt by the applicant to file a proper pleading, a situation all the more remarkable when one considers that the factual material must have been carefully considered and assessed in the course of the criminal proceedings against the second and third respondents. If the applicant takes advantage of the leave now given, any further amended statement of claim must contain, or be accompanied by, amended particulars of all amounts pleaded, giving details of the respects in which the amounts so pleaded differ from those pleaded in the amended statement of claim filed on 10 October 1990 and those given in the responses by the applicant to the requests for particulars made by the respondents by letters dated 27 July 1990. Any further amended statement of claim is to be filed and served not later than 28 September 1994. The applicant must pay the respondents' costs of the motion for leave to amend further the amended statement of claim filed on 10 October 1990 and the respondents' costs thrown away by reason of the further amendment thereof. The matter will be listed for a directions hearing on 7 October 1994.
I certify that this and the preceding 23 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves.
Associate
Dated: 2 September 1994
Counsel for the applicant : Mr C.M. Erskine
Solicitor for the applicant : Australian Government
Solicitor
Counsel for the first and : Mr M. Goodwin
second respondents
Solicitors for the first and : Gallens Crowley & Chamberlain
second respondents
Counsel for the third : Mr P.R. Garling
respondent
Solicitors for the third : Patterson Houen & Commins
respondent
Date of hearing : 21 September 1993
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