DRD Australasia Pty Ltd v Mostert
[2008] WASC 71
•14 MAY 2008
DRD AUSTRALASIA PTY LTD -v- MOSTERT [2008] WASC 71
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 71 | |
| Case No: | CIV:1588/2003 | 8 FEBRUARY 2008 | |
| Coram: | LE MIERE J | 14/05/08 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application to amend defence to add set-off and counterclaim dismissed Application to amend defence allowed in part | ||
| B | |||
| PDF Version |
| Parties: | DRD AUSTRALASIA PTY LTD (ACN 090 477 197) CHARLES PHILIP MOSTERT NEWSHORE NOMINEES PTY LTD (ACN 067 099 843) ROGER MAURICE BRYER |
Catchwords: | Civil procedure Pleadings Amendment of pleadings Application to amend defence to add set-off and counterclaim Whether proposed set-off and counterclaim arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed Rules of the Supreme Court 1971 (WA) O 21 r 5(5) Turns on own facts Civil procedure Pleadings Amendment of pleadings Application to amend defence Whether proposed amendments raise any arguable defence Whether leave should be granted to amend defence out of time Turns on own facts |
Legislation: | Limitation Act 1935 (WA), s 38 Rules of the Supreme Court 1971 (WA), O 21 r 5(5) |
Case References: | Haller v Ayre [2005] QCA 224; [2005] 2 Qd R 410 Newshore Nominees Pty Ltd as Trustee for the Commercial & Equities Trust v Durban Roodepoort Deep Ltd [2004] WADC 57 Ogilvie v Adams [1981] VR 1041 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
CHARLES PHILIP MOSTERT
First Defendant
NEWSHORE NOMINEES PTY LTD (ACN 067 099 843)
Second Defendant
ROGER MAURICE BRYER
Third Defendant
(Page 2)
Catchwords:
Civil procedure - Pleadings - Amendment of pleadings - Application to amend defence to add set-off and counterclaim - Whether proposed set-off and counterclaim arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed - Rules of the Supreme Court 1971 (WA) O 21 r 5(5) - Turns on own facts
Civil procedure - Pleadings - Amendment of pleadings - Application to amend defence - Whether proposed amendments raise any arguable defence - Whether leave should be granted to amend defence out of time - Turns on own facts
Legislation:
Limitation Act 1935 (WA), s 38
Rules of the Supreme Court 1971 (WA), O 21 r 5(5)
Result:
Application to amend defence to add set-off and counterclaim dismissed
Application to amend defence allowed in part
Category: B
Representation:
Counsel:
Plaintiff : Mr D J Martino
First Defendant : No appearance
Second Defendant : Mr P G Clifford
Third Defendant : Mr P G Clifford
Solicitors:
Plaintiff : Allens Arthur Robinson
First Defendant : No appearance
Second Defendant : Richard O'Shannassy
Third Defendant : Richard O'Shannassy
(Page 3)
Case(s) referred to in judgment(s):
Haller v Ayre [2005] QCA 224; [2005] 2 Qd R 410
Newshore Nominees Pty Ltd as Trustee for the Commercial & Equities Trust v Durban Roodepoort Deep Ltd [2004] WADC 57
Ogilvie v Adams [1981] VR 1041
(Page 4)
- LE MIERE J:
Introduction
1 The second and third defendants (defendants) seek leave to amend their defence, to add a counterclaim and to join Vista Blue Ltd as a second plaintiff to the counterclaim. The proposed amendments to the defence include pleading a set-off. I will first deal with the application to add a set-off and counterclaim.
Set-off and counterclaim
2 The defendants propose to plead that, in circumstances pleaded in [15A] - [15C] of the proposed amended statement of claim, funds were loaned to the plaintiff and the plaintiff is indebted to the second defendant (Newshore), or alternatively Vista Blue, in the sum of US$1,178,264. The defendants wish to plead in [51A] - [51B] that by reason of the loan the plaintiff is indebted to Newshore or alternatively Vista Blue. Alternatively, the defendants wish to plead in [52] that if the funds were not paid to the plaintiff as a loan then the funds are payable by the plaintiff to Newshore, or alternatively to Vista Blue, as monies had and received by the plaintiff to Newshore's use, or alternatively Vista Blue's use. The defendants then propose in [53] to set-off so much of the funds loaned, or alternatively monies had and received, as will be sufficient to satisfy the plaintiff's claim in these proceedings.
3 The plaintiff opposes leave to bring the set-off and counterclaim. The plaintiff says that the claim or claims of Newshore and Vista Blue are statute barred because the cause of action, if any, arose more than six years ago: see Limitation Act 1935 (WA) s 38.
4 The plaintiff submits that where there is a loan of money simpliciter - that is, with nothing at all said as to repayment - the money is repayable instantly and the cause of action commences instantly upon the making of the loan: Ogilvie v Adams [1981] VR 1041; Haller v Ayre [2005] QCA 224; [2005] 2 Qd R 410. The defendants accept that is the law and further accept that the same principle applies to an action for money had and received: that is, the cause of action commences upon the receipt of the money. The proposed pleading is that the funds were loaned by Vista Blue, or alternatively by Newshore, to the plaintiff on 11 July 2000. Therefore, the causes of action in debt and for money had and received arose more than six years ago.
(Page 5)
5 The defendants rely upon Rules of the Supreme Court 1971 (WA) O 21 r 5(5) which provides:
An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.
6 Order 21 r 5(5) does not allow the defendants to add the proposed set-off and counterclaim for two reasons. First, the new cause of action in the proposed set-off and counterclaim does not arise out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed. The existing defence does not plead that Vista Blue or Newshore paid the funds to the plaintiff, that the plaintiff received the funds, or the transaction or transactions that are said to have generated the funds. Secondly, the new cause of action does not arise out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment: that is, the defendants. Newshore does not claim any relief in the existing defence. Manifestly, Vista Blue does not claim any relief in the existing proceedings.
7 For those reasons, leave to add the set-off and counterclaim will be refused. It is not necessary to consider any further arguments of the plaintiff in opposition to the proposed set-off and counterclaim.
8 The amendment to add a new [2A] to the defence was solely for the purposes of the counterclaim. Accordingly, leave will not be granted to amend the defence to add the proposed new [2A].
Defence paragraphs 15A - 16B
9 At the heart of the plaintiff's claim are the following allegations. Mr Roger Bryer, the third defendant, caused Newshore to render invoices in February, March, April and June 2000. The June 2000 invoice was expressed to relate to the period from 10 May to 4 June 2000. Newshore had not provided any services to DRD or any of its subsidiaries in the period to which the invoices were expressed to relate or at all and Newshore did not have any entitlement to be paid the amount set out in the invoices or any amount. The first defendant, Mr Charles Mostert, in breach of his duties as a director of Durban Roodepoort Deep Ltd (DRD) and the plaintiff (a subsidiary of DRD), caused the plaintiff to pay the invoices. Newshore received the payment of the amounts invoiced in the
(Page 6)
- knowledge that it did not have any entitlement to be paid the amount set out in the invoices or any amount.
10 In their existing defence the defendants plead, amongst other things, that Newshore provided services to DRD pursuant to agreements described as the Consultancy Agreement and the Service Agreement. The services which the defendants allege Mr Bryer, on behalf of Newshore, provided to DRD and the plaintiff pursuant to the Consultancy Agreement and the Service Agreement are set out in [49] of the defence.
11 The proposed new [15A] pleads that as a result of the personal exertion and efforts of Mr Bryer using Vista Blue, Mr Bryer and Newshore, in providing the services set out in [49(e)] and [49(f)] of the defence, raised funds by buying and selling Harmony shares and by placing DRD shares in the US markets. Proposed [15B] then pleads that officers of the plaintiff requested Mr Bryer and Mr Bryer agreed, through Vista Blue, to provide the funds raised by the activities referred to in [15A] as a loan from Newshore, alternatively Vista Blue, to the plaintiff. Paragraphs 15C, 16A and 16B then plead the making of the loan.
12 In my view, [15A] - [16B] do not raise any arguable defence or, alternatively, are embarrassing. The defence sought to be raised by the defendants is that Newshore provided services to the plaintiff. Those services are set out in [49] of the defence. The proposed pleas in [15A] - [16B] do not plead the provision of services by Newshore but rather the generating of the funds and the loan or advance of those funds by Vista Blue or alternatively Newshore to the plaintiff. Those facts raise no arguable defence.
13 There are further reasons why leave should not be granted to add the proposed [15A] - [16B]. Paragraph 15A pleads that the funds were raised by the trading activities there referred to by about July 2000. Paragraphs 15B and 15C plead that the funds were loaned or advanced to the plaintiff on or about 11 July 2000. Those matters relate to things done after 4 June 2000. The last invoice pleaded by the plaintiff is the June invoice. The plaintiff pleads that that invoice was expressed to relate to the period from 10 May 2000 to 4 June 2000. That allegation is admitted by the defendant. It follows that the matters pleaded in [15A] - [16B] of the proposed amended defence do not relate to the June 2000 invoice or the earlier invoices rendered by Newshore.
14 Furthermore, proposed [15A] - [16B] seek to plead, at least in part, things done by Vista Blue. There is no sufficient pleading of facts to
(Page 7)
- establish that things done by Vista Blue constituted the provision of services by Newshore to the plaintiff or DRD pursuant to the Consultancy Agreement or the Service Agreement.
15 It is unnecessary to consider the lateness of the proposed amendment in any detail. However, I will briefly state the outcome of my consideration of that matter. As long ago as October 2007, the plaintiff raised the point that the proposed, or any, amendment by the defendants should be supported by an affidavit or affidavits explaining the lateness of the amendment. Furthermore, the proposed amendments are inconsistent with the factual position earlier stated to the court by counsel for the defendants. The action has also been entered for trial.
16 In all those circumstances I would not give leave to amend the defence in the absence of an affidavit explaining and supporting the amendments. The defendants have elected not to put on such an affidavit.
Amendments proposed to paragraph 49
17 The existing pleading is that Mr Bryer, on behalf of Newshore, provided corporate services to DRD pursuant to the Consultancy Agreement and the Service Agreement including the services set out in [49(a)] - [49(d)]. The defendants seek to amend [49] to plead that Mr Bryer, on behalf of Newshore, provided corporate services to DRD and its subsidiary, the plaintiff, pursuant to the Consultancy Agreement and the Service Agreement. I would allow that amendment.
18 Additionally, the defendants seek to add [49(e)] and [49(f)]. Proposed [49(e)] is:
From in or about August 1999 to in or about August 2000, through Vista Blue, Bryer traded in shares in Harmony Gold Limited ('Harmony'), a South African company.
Particulars
(i) Stratton instructed Newshore, on behalf of the Plaintiff and its parent DRD to buy shares in Harmony and subsequently sell them for a price below market price;
(ii) Newshore, through Bryer, traded in Harmony shares using Vista Blue as it had a trading history and lines of credit in the US.
- Proposed [49(f)] is:
From in or about August 1999 to in or about August 2000, through Vista Blue and for and on behalf of DRD and the Plaintiff, Bryer placed DRD
- shares to raise approximately US$30 million for DRD and to assist in stabilising DRD's share price.
Particulars
(i) At a meeting in Johannesburg in or about August 1999, Stratton, Roger Keeble and Brett Keeble, instructed Newshore, through Bryer, on behalf of the Plaintiff and its parent DRD to place DRD shares in the US markets and to also buy shares in DRD in the US market at a price above market price;
(ii) Newshore, through Bryer, placed DRD shares in the US market and traded in DRD shares in the US using Vista Blue as Vista Blue had a trading history and lines of credit in the US.
19 The plaintiff objects to the introduction of [49(e)] and [49(f)] for three reasons.
20 First, it is submitted that the proposed new subparagraphs are inconsistent with the first line of [49] which provides that Mr Bryer, on behalf of Newshore, provided corporate services whereas [49(e)] and [49(f)] plead that Mr Bryer, through Vista Blue, did certain things. I do not think the objection is correct. The pleading is, in essence, that the plaintiff instructed Newshore to provide certain services: that is, to buy and sell shares in Harmony. Newshore provided those services through Mr Bryer and Mr Bryer did so using Vista Blue. Paragraph 49(f) is similar. The pleading is that the plaintiff and its parent instructed Newshore to provide certain services: that is, placing DRD shares in the US market and buying DRD shares in the US market. Newshore provided those services through Mr Bryer and Mr Bryer did so using Vista Blue.
21 The plaintiff's second objection is that [49(e)] and [49(f)] are inconsistent with the plea in the District Court as to the nature of the services to be performed under the Consultancy Agreement and the Service Agreement. The reference to the District Court is to an action brought in the District Court by Newshore against DRD (Newshore Nominees Pty Ltd as Trustee for the Commercial & Equities Trust v Durban Roodepoort Deep Ltd [2004] WADC 57). The fact that a party has pleaded certain matters in other proceedings does not preclude that party from pleading inconsistent matters in a subsequent action. However, that matter is relevant to the exercise of the discretion to which I will now refer.
22 The plaintiff's third objection is that the proposed amendments ought not be allowed because of the late stage at which the amendments have
(Page 9)
- been proposed and the absence of any affidavit to explain the delay in raising the matters now asserted or the discrepancy between the proposed pleading and the matters earlier asserted by the defendants. The amendments are sought to be made at a late stage of the proceedings. The action was commenced in 2003. It has been entered for trial. The services provided by Newshore pursuant to the Consultancy Agreement and the Service Agreement have always been an issue in these proceedings. As long ago as October 2007, the plaintiff raised the point that an application to amend the defence at a late stage in the proceedings should be accompanied by an affidavit explaining the reason for the delay in raising the proposed defence. The defendants have elected not to put on such an affidavit.
23 In all the circumstances the defendants should not be given leave to amend the defence by adding [49(e)] and [49(f)].
Conclusion
24 The second defendants will have leave to amend their defence in terms of the minute of proposed amended defence, set-off and counterclaim dated 12 December 2007 except for proposed [2A], [15A] - [16B], [49(e)], [49(f)], and [51A] - [53] and the proposed prayer for relief.
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