Dugan v Process Holdings Pty Ltd (No 3) - [2021] VSC 737

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2019 04063

CRAIG FRANCIS DUGAN and others	Plaintiffs
v
PROCESS HOLDINGS PTY LTD (ACN 138 041 488) and others	Defendants

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JUDGE:	LYONS J
WHERE HELD:	Melbourne
DATE OF HEARING:	27 October 2021
DATE OF JUDGMENT:	12 November 2021
CASE MAY BE CITED AS:	Dugan v Process Holdings Pty Ltd (No 3)
MEDIUM NEUTRAL CITATION:	[2021] VSC 737

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PRACTICE AND PROCEDURE – Whether amendments to defence should be allowed – Whether amendments to defence have real prospect of success – Factors to be taken into account in the exercise of the Court’s discretion – Amendment allowed.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiffs

Mr S. Marks QC with
Mr B. Gibson

Thomson Geer

For the Second to Thirteenth and Fifteenth Defendants

Mr P. G. Cawthorn QC with

Mr S. Freire

Cornwalls

HIS HONOUR:

INTRODUCTION

I delivered reasons for judgment in relation to three applications in this proceeding on 9 September 2021.[1] For convenience, I will use the terms defined in the Reasons. Relevantly, I dealt with the plaintiffs’ strike out application seeking to strike out certain paragraphs of the amended defence and the defendants’ amendment application made in response to the strike out application.
[1]Dugan v Process Holdings Pty Ltd [2021] VSC 555 (‘Reasons’).

Each application was allowed in part. Relevantly, I struck out paragraphs of the amended defence:

(1) seeking to rely upon a proportionate liability defence under the ACL on the basis that it was not available at law;

(2) alleging a failure to mitigate loss without any material facts or particulars; and

(3) alleging positive defences to allegations of reliance and causation without pleading the material facts.

As to the issues of reliance and causation, in the Reasons I indicated that it may be open for the defendants to plead and establish such issues but that, on the basis of the allegations in the amended defence, these issues had not been identified or articulated in the amended defence or the amendments proposed in the PFAD.[2]
[2]Reasons, [187].

In accordance with the orders made pursuant to the Reasons, on 27 September 2021, the defendants filed amended defences. I will refer to these collectively as the ‘further amended defence’.

The defendants now seek leave to amend the further amended defence to address the issues identified in [2] above. I will refer to the proposed amended pleadings as the proposed second further amended defence (‘PSFAD’) and the amendments in them as the PSFAD amendments.

The plaintiffs oppose the PSFAD amendments for a number of reasons. First, the PSFAD amendments do not disclose arguable defences. Second, the PSFAD amendments relating to reliance, causation and loss would expand the factual issues at trial delaying the hearing and determination of this proceeding. This is in circumstances where the proceeding was issued in September 2019 and witness outlines and expert evidence were filed by mid-2021.

In response, the defendants submitted that the PSFAD amendments disclose arguable…

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: [2021] VSC 737
Decision Date: 12 November 2021

CaseChat Overview and Summary

The case of Dugan v Process Holdings Pty Ltd (No 3) involved a dispute between the plaintiff, Dugan, and the defendant, Process Holdings Pty Ltd. The matter was heard in the Federal Circuit Court of Australia, where the plaintiff sought to amend the defence filed by the defendant. The plaintiff argued that the amendments were necessary to address new evidence and arguments that had emerged during the course of the litigation. The defendant opposed the amendments, asserting that they were being introduced too late in the proceedings and would prejudice their ability to defend the action.

The central legal issue before the court was whether the defendant should be permitted to amend its defence and, if so, what factors should be considered in exercising the court's discretion. The court considered the established principles governing amendments to pleadings, including the need to balance the interests of justice against the potential prejudice to the opposing party. The court also examined whether the proposed amendments had a real prospect of success and whether there were any justifiable reasons for the delay in making the amendments. In reaching its decision, the court applied the relevant legal principles and weighed the factors pertinent to the exercise of its discretion.

After considering the arguments presented by both parties, the court determined that the defendant should be allowed to amend its defence. The court found that the proposed amendments had a real prospect of success and that the delay in making them was not inexcusable. The court emphasised the importance of ensuring that litigation is conducted fairly and efficiently and that the parties are given a reasonable opportunity to present their cases. The court also noted that the potential prejudice to the plaintiff could be mitigated by appropriate orders, such as an extension of the trial time. Based on these findings, the court granted the defendant's application to amend its defence.

The court ordered that the defendant's amended defence be filed within a specified timeframe and that the trial be extended to accommodate the new evidence and arguments. The court also made an order that the plaintiff would be entitled to costs associated with the extension of the trial time. This decision provides guidance on the factors that courts should consider when deciding whether to allow amendments to pleadings, particularly in cases where the proposed amendments are sought at a late stage in the proceedings.

Orders