F and J Investment Assets Pty Ltd v Paul Etcell t/as Ikonic Homes
[2021] VCC 1967
•8 December 2021
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-19-00242
| F & J INVESTMENT ASSETS PTY LTD | Plaintiff |
| v | |
| PAUL ETCELL t/as IKONIC HOMES | Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23,24,25 and 29 November,1 and 2 December | |
DATE OF RULING: | 8 December 2021 | |
CASE MAY BE CITED AS: | F & J Investment Assets Pty Ltd v Paul Etcell t/as Ikonic Homes | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 1967 | |
REASONS FOR RULING
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Subject:PROCEDURE
Catchwords: Amendment of pleading
Legislation Cited: Civil Procedure Act 2010 (Vic); County Court Civil Procedure Rules 2018 (Vic)
Cases Cited:ABL Nominees Pty Ltd v McKenzie [2014] VSC 529; Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Namberry Craft Pty Ltd v Watson [2011] VSC 136; Trevor Roller Shutter Service Pty Ltd v Crowe [2011] VSCA 16
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | R A Harris | MGA Lawyers |
| For the Defendant | J R Gurr | Ward & Co |
HIS HONOUR:
Introduction
1This is an application by the defendant (“Etcell”) to amend his defence and counterclaim. The plaintiff (“F & J Investment”) opposes the application.
Background
2The Shire of Nillumbik owned a building located at 12 Bridge Street, Eltham (“the property”), which it operated for a time as a health centre. The property became vacant for a couple of years before it was bought in October 2015 by Jetmir and Florije Mustafa. Subject to obtaining planning approval, Jetmir and Florije intended to transform the building into a childcare centre.
3The Mustafa Property Trust (“the MP Trust”) was settled on 1 February 2007.
4The planning permit for the childcare centre was approved in April 2017.
5F & J Investment was incorporated on 22 September 2017. Jetmir and Florije at all times have been the directors of the company and equal shareholders.
6From 1 February 2007 until their retirement on 9 October 2017, Jetmir and Florije were the trustees of the MP Trust.
7On 9 October 2017, F & J Investment replaced Jetmir and Florije as the trustee of the MP Trust.
8During 2017, Jetmir and Florije negotiated primarily with Justin Barnett on behalf of the defendant regarding the contract to build the childcare centre at the property.
9By a contract dated 26 October 2017 (“the contract”), with a client described in the contract as the Mustafa Property Trust, the defendant as builder agreed to perform building works at the property in the sum of $1.472m (inclusive of GST). At the date of the contract, Jetmir and Florije were shown as the registered proprietors on the certificate of title for the property. They remain the registered proprietors of the property.
10The building works at the property involved the construction of a childcare centre. Part of the existing building was demolished, and part was renovated.
11On 31 July 2018, there was a meeting attended by Jetmir, Florije, Etcell and Barnett. At the meeting, the builder issued a notice of suspension of works. The builder also said that he provided a notice of default/to show cause of the same date. The plaintiff says that this notice was provided the next day, together with a notice of suspension of works.
12On 1 August 2018, the builder received a document described as a notice to show cause under clause 30 of the contract. On the same day, the building owners’ former solicitor, Boutique Legal, wrote a letter to the builder about the show cause notice.
13On 8 August 2018, the building surveyor issued a building notice to the owner.
14On 9 August 2018, Brixton Legal, the builder’s former solicitors, sent a letter to Boutique Legal responding to the owner’s show cause notice.
15On 17 August 2018, Boutique Legal, sent a further letter to Brixton Legal enclosing a letter from the owner’s architects dated 16 August 2018. This latter letter alleged various defects in the building and problems with the builder’s performance.
16On 24 August 2018, the building owner sought to terminate the building contract with Etcell. Later the same day, Brixton Legal responded by a letter stating that the purported termination was wrongful and amounted to a repudiation of the contract. Etcell said that he accepted the repudiation and acted to terminate the contract with immediate effect.
17On 23 January 2019, F & J Investment issued this proceeding.
18F & J Investment alleges that Etcell breached the building contract in various ways, including not reaching practical completion by the due date, doing building works without the necessary permit, failing to take out insurance in accordance with the contract, and claiming for works which were not complete. F & J Investment claims losses of about $2.67 million together with interest.
19Etcell says that F & J Investment is not party to the contract. Etcell claims that the owners breached the contract by not paying money due to him and by terminating the contract without a proper basis. Etcell says that he has accepted the owners’ repudiation. He claims monies owed to him in the sum of about $144,000 plus interest.
Amendment sought
20The amendments which Etcell seeks to make were set out in the Proposed Second Further Amended Defence and Counterclaim. I set out below the relevant paragraphs with the amendments underlined.
1.As to paragraph 1:
(a)subject to production of a valid certificate of incorporation, it admits the allegations in sub-paragraph (a);
(b)it does not admit the allegations in sub-paragraph (b), and says that, at all relevant times prior to service of F&J’s writ, the second and third defendants by counterclaim (Mustafas) held themselves out as the trustees of The Mustafa Property Trust (Trust); and
(c)it denies the allegations in sub-paragraph (c).
2.It admits the allegations in paragraph 2.
3.It denies the allegations in paragraph 3 and says that it did not enter into any agreement with F&J.
3A. It says, further, that:
(a) the Mustafas were at all relevant times registered proprietors of the land at 12 Bridge Road, Eltham (Land);
(b) by a contract dated 26 October 2017 - the essential terms of which were agreed on 4 October 2017 - the Builder agreed to carry out building works at the Land consisting of the construction of a childcare centre (Works) and the Mustafas, alternatively the Mustafas as trustees for the Trust, agreed to pay the sum of $1,472,847.00 (inc GST) (Contract); and
Particulars
The Contract was in writing partly written, partly oral and partly to be inferred or implied.
Insofar as the Contract was in writing, it and comprised an HIA Medium Works Commercial Contract Conditions dated 26 October 2017, together with the plans, drawings, specifications and documents described at schedule item 8. Copies are available for inspection at the offices of the Builder’s solicitor by appointment.
Insofar as the Contract was oral, it was comprised of or evidenced by discussions at a meeting on 4 October 2017 attended by the Mustafas, the Builder, Justin Barnett and Louis Ng at which the parties discussed the draft contract which had previously been provided, reviewed and finalised the scope of work and agreed the contract price of $1,472,847.00. During the meeting that day Jetmir Mustafa and/or Florije Mustafa said words to the effect that the Mustafas agreed to award the Contract to the Builder.
Insofar as the Contract is inferred or implied, it is to be inferred or implied from the following:
(i)the fact that the Mustafas were at all relevant times the registered proprietors of the Land;
(ia)the email from Jerry Mustafa dated 5 September 2017, advising that the party for the proposed contract was Jetmir Mustafa & Florie Mustafa ATF the Mustafa Property Trust;
(ii)the draft contract sent to Jetmir Mustafa on or about 13 September 2017 naming Jetmir Mustafa as the Client;
(iii)the email dated 19 September 2017 from Trent Harris of Boutique Legal to Jetmir Mustafa, forwarded to Justin Barnett on 20 September 2017, providing comments on the draft contract;
(iv)the discussions at the meeting on 4 October 2017, referred to above, at which the Mustafas said words to the effect that the Contract was awarded to the Builder;
(v)the Builder, in or about October 2017, erecting hoarding around the Site;
(vi)the form 1 application for staged Building Permit (demolition) dated 9 October 2017, signed by Jetmir Mustafa, naming the Mustafas as owners, naming the Builder as builder and stating the contract price as $1,472,847.00;
(via)the fact that the Mustafas did not advise the Builder that they had executed the Deed of Retirement and Appointment on 9 October 2017;
(vii)the revised draft contract provided to the Mustafas on or about 11 October 2017, naming the client as The Mustafa Property Trust;
(viii)the stage 1 Building Permit (demolition) issued on 12 October 2017, naming the Mustafas as owners, naming the Builder as builder and stating the contract price as $1,472,547.00;
(ix)the fact that all subsequent building permit applications and all subsequent building permits issued prior to termination of the Contract named the Mustafas as owners and the Builder as builder;
(x)the Builder, on or about 15 October 2017, issuing to the Mustafas invoice 1710/15 in the sum of $73,642.35 for the 5% deposit due under the Contract and the Mustafas paying that invoice;
(xi)the fact that all subsequent invoices which were issued for works under the Contract were issued to the Mustafas and all invoices which were paid were paid by the Mustafas;
(xia)the fact that Mr Mustafa, when signing the Contract on 26 October 2017, did not purport to do so as a director of F & J Investments Pty Ltd or otherwise under or in accordance with the Corporations Act 2001;
(xii)the fact that all contractual notices issued by or on behalf of the Client under the Contract, including the purported Notice to Show Cause issued on 1 August 2017 and the purported notice of termination issued on 24 August 2017, were issued by or on behalf of the Mustafas;
(xiii)the fact that variation 1 dated
2326 October 2017 identifies the second defendant by counterclaim as the owner, and that Mr Mustafa, when signing did not purport to do so as a director of F & J Investments Pty Ltd or otherwise under or in accordance with the Corporations Act 2001;
(xiv)the fact that at no point did the Mustafas, or either of them, identify to the Builder that they signed the Contract on behalf of F&J.
Further particulars may be provided following the completion of discovery.
If (which is denied) the identity of the owner under the Contract was not evident on the face of the document, it was to be inferred from the following facts:
(i)the Mustafas were registered proprietors of the Land;
(ii)the Builder dealt with the Mustafas in relation to the Contract;
(iii)variation 1 dated 23 October 2017 identifies the second defendant by counterclaim as the owner;
(iv)the building permit listed the Mustafas as the owners;
(v)the Mustafas signed the Contract; and
(vi)at no point did the Mustafas, or either of them, identify to the Builder that they signed the Contract on behalf of F&J.
(c) on or about 4 January 2018, the parties agreed to vary the Contract to make a minor alteration to the wording in the HIA Medium Works Commercial Contract Conditions.
Particulars
The previous copy of the HIA Medium Works Commercial Contract Conditions dated 26 October 2017 was replaced with a later signed version with slightly different details in schedule item 16. The plans, drawings, specifications and documents described in schedule item 8 were unchanged.
The document was signed on or about 4 January 2018, but backdated to 23 October 2017.
Copies are available for inspection at the offices of the Builder’s solicitor
by appointment.
3B. Without otherwise derogating from the denial in paragraph 3 and the matters set out in paragraph 3A above, the Builder refers hereunder to the owner under the Contract, whether that be:
(a)the Mustafas, alternatively the Mustafas as trustees for the Trust as alleged in paragraph 3A above; or
(b)alternatively (which is denied), F&J as trustee for the Trust as is alleged in F&J’s writ, as “the Owner”.
4. Subject to the matters set out in paragraph 3 above as to the identity of the contracting parties, and subject to reference to the written terms of the Contract for their full force and effect, it admits the allegations in paragraph 4.
5. It admits the allegations in paragraph 5.
21Etcell contends that his case has always been, and remains, that Jetmir and Florije are personally liable on the contract. He says that the aim of the amendment is to “remove any doubt regarding the defendant’s case as to the basis upon which the owners entered into the contract on 26 October 2017”.[1]
[1] Defendant’s submissions dated 30 November 2021, paragraph 2.
22According to Etcell, his pleaded counterclaim always named Jetmir and Florije as defendants in their personal capacity. In each version of his pleading, Etcell has sought a declaration that “the relevant parties to the contract were the builder and the Mustafas”.[2]
[2] Ibid, paragraph 5.
Legal principles
23The applicable principles have been usefully summarised by Associate Justice Derham in ABL Nominees Pty Ltd v McKenzie.[3]
[3][2014] VSC 529 [17]-[22].
24Rule 36.01(1) of the County Court Civil Procedure Rules 2018 (Vic) (“the Rules”) gives the court the power to permit any pleading amendment for the purpose of determining the real question in controversy between the parties to any proceeding. If a proposed amendment is futile because it is obviously bad in law or liable to have been struck out if it had appeared in the original pleading, then a court should normally disallow the amendment.
25His Honour referred[4] to the decision of Vickery J in Namberry Craft Pty Ltd v Watson,[5] where the judgment summarised the factors to be taken into account in such applications as follows:
(a)whether there will be substantial delay caused by the amendment;
(b)the extent of wasted costs that will be incurred;
(c)whether there is an irreparable element of unfair prejudice caused by the amendment, arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations, which cannot be adequately compensated for, whatever costs may be awarded;
(d)concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource, and whether the grant of the amendment will result in inefficiencies arising from the vacation or adjournment of trials;
(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.
[4] Ibid at [20].
[5][2011] VSC 136.
26The list of factors is not exhaustive. Ultimately, all matters arising in any particular case which are relevant to the exercise of the court’s power should be taken into consideration.
27Whether or not to grant a pleading amendment is a discretionary decision in the sense that no single consideration and no combination of considerations is necessarily determinative of the result. The judge has some latitude about choosing which decision to make.[6]
[6]See Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19] quoted by Gummow, Hayne, Crennan, Kiefel and Bell JJ in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [89].
28Whereas at one time courts were quite liberal about allowing pleading amendments, at least where the inconvenience to the other party could be mollified by a costs order, the position has changed in recent years. The altered attitude had come about partly by the introduction of legislation like the Civil Procedure Act 2010 (Vic) (“the CP Act”) and partly by the approach now taken by the courts as reflected in decisions such as Aon Risk Services Australia Limited v Australian National University.[7]
[7] (2009) 239 CLR 175.
29A main purpose of the CP Act was to reform and modernise the law’s practice, procedure and processes relating to civil proceedings in Victorian courts. Another main purpose was to provide for an overarching purpose in relation to the conduct of civil proceedings to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.[8] The CP Act sets out its overarching purpose and section 8 requires that courts give effect to the overarching purpose in the exercise of any of its powers or the interpretation of those powers.
[8] Civil Procedure Act 2010 (Vic), ss 1 and 7.
30Hence, in making any order or giving any direction in a civil proceeding, the court is to further the overarching purpose by having regard to various objects including the just determination of the civil proceeding, the efficient conduct of the business of the court, the efficient use of judicial and administrative resources and the timely determination of the civil proceeding.[9]
[9] Ibid, section 9.
31In Aon, in December 2004, the Australian National University commenced proceedings in the Supreme Court of the Australian Capital Territory against three insurers seeking indemnity for losses suffered by reason of damage to buildings and their contents. In June 2005, the University joined as a defendant its insurance broker, Aon Risk Services Australia Limited, and claimed damages based on Aon’s failure to arrange the renewal of insurance over some of the property as an alternative to its claim against the insurers. Two of the insurers claimed in their defences to be entitled to reduce their liability to the University because the value of the property had been substantially understated by the University.
32On 15 November 2006, the third day of a four week trial, the University settled its claims against the insurers and consent judgments were subsequently entered. The University then applied for an adjournment of the trial and leave to amend its Statement of Claim to add a substantial and new claim against Aon based on allegations that Aon had been obliged to ascertain and declare the correct value of the property to the insurers and to provide certain advice to the University.
33On 12 October 2007, Gray J granted the University leave to amend. The High Court, reversing the decision of the Court of Appeal of the Australian Capital Territory Supreme Court, held that he was wrong to permit the amendment.
34The judgments made the point that, in considering how to deal with amendment applications, there is a variety of matters to which the court can properly pay regard: the extent to which allowing the amendment would waste the public resource of the court and its officers; the strain and uncertainty on litigants; the potential for loss of public confidence in the judicial system; the scope for delay and the effect on other litigants.
35Courts have now decided that achieving the just, timely and cost effective resolution of disputes is a matter of public interest to the court and other litigants and is not confined solely to the parties in the subject action.
36The Victorian Court of Appeal in Trevor Roller Shutter Service Pty Ltd v Crowe said:[10]
“As we construe Aon, it was about the impropriety of granting a party leave to make a late amendment to a pleading, in circumstances where that party had failed to act expeditiously, and where to allow the amendment was likely to be productive of wasted costs and resources. More generally, Aon may be thought to have re-invigorated the procedural paradigm, to some extent and for some time diminished by J L Holdings, that time, costs and limited judicial resources are relevant considerations in the determination of whether to allow late applications for amendment and invoke other interlocutory process.”
[10] [2011] VSCA 16 at [42].
37Aon made clear that 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 allow amendment should be weighed up. The fact of substantial delay and wasted cost and the concerns of case management will assume importance on such applications.
38The judgment of Gummow, Hayne, Crennan, Kiefel and Bell JJ in Aon commented that:[11]
“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 parties having a sufficient opportunity to identify the issues they seek to agitate.”
[11] Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [112].
Affidavit in support
39Etcell filed an affidavit in support sworn by Marvin Ward on 30 November 2021. The affidavit set out some history of the matter. Ward said that on about 28 February 2019, Etcell’s former solicitors sent a letter to the plaintiff’s current solicitors notifying them, inter alia, that “… in the course of drafting our client’s Defence, it became apparent that you have brought proceedings in the name of the wrong plaintiff …”.
40The plaintiff’s solicitors responded by letter on about 4 March, stating that:
“… noting that your client’s Defence is due to be filed on 11 March 2019 … we are surprised that you would seek to agitate an inconsequential technicality in preference to responding to the serious claims being made against your client.
However, for the sake of clarity, we reject your assertion that this proceeding was brought in the name of the wrong plaintiff.”
41Etcell filed his Defence and Counterclaim on about 11 March 2019. The counterclaim named Jetmir and Florije as defendants to the counterclaim.
42Paragraph 3A(a) of the Defence and Counterclaim pleaded that the relevant contracting party was “the Mustafas or the Mustafas as trustee for the trust”.
43After an unsuccessful mediation in June 2020, the plaintiff sought to amend its Statement of Claim and the defendant agreed to this.
44On about 2 December 2020, Etcell filed an Amended Defence and Counterclaim in response. Paragraph 3A(b) of the amended pleading was altered to refer to the contracting party as “the Mustafas as trustees for the trust”. Paragraph 3B(a) was similarly amended.
45Ward explained his belief as to the reason for the pleading change. He said he believed that the references to the Mustafas in their personal capacities was made because, as a matter of law, there is no material difference between the Mustafas entering into the building contract with the defendant personally or, alternatively, as trustees for the MP Trust.
46Ward noted that, around the time the Amended Defence and Counterclaim was filed in December 2020, Etcell had no cause to believe that Jetmir and Florije were not the trustees of the MP Trust on 26 October 2017. Ward said that, on his instructions, Etcell entered into the Contract believing that the Mustafas in their own capacity “were binding themselves, the MP Trust and the Trust assets to liabilities under the Contract”.[12]
[12] Affidavit of Marvin Ward sworn 30 November 2021, paragraph 23.
47In the evidence which he later filed, Etcell said the first time he heard of F & J Investment was when he received the writ in the proceeding.
Analysis
48I now consider the various factors relevant to the exercise of the court’s discretion.
(a) Whether there will be substantial delay caused by the amendment
49If the amendment is allowed, I expect there will be delay. The plaintiff has indicated that, assuming Etcell obtains leave to amend, the plaintiff would need to amend its pleadings and lead more evidence. Further, and more importantly, it would also seriously consider joining to the proceeding its former advisers. If that were to occur, the trial would probably not proceed before about September 2022. At present, trials are listed in the division up to around August 2022. Given the history of the matter, this extra delay would be unfortunate. As the affidavit material showed, before the hearing commenced on 23 November 2021, it had been set down for trial on five occasions. Although the plaintiff alleges that Etcell bears primary responsibility for the earlier delays, I do not need to address the detail of the history. But I note that on one occasion, the plaintiff sought to amend its claim after the failed mediation.
(b) The extent of wasted costs that will be incurred
50It seems that the extent of wasted costs will be limited but still significant if the amendment is allowed. This is not a situation in which Etcell has run its defence on a particular basis which it is now abandoning and is seeking to replace it with an entirely new defence. If that were the case, much of the legal work undertaken to date could be wasted. Here, Etcell, appears to be seeking to make explicit an additional defence which it could deploy to defeat the plaintiff’s claim. Mr Harris for the plaintiff argued that:
·the initial defence and counterclaim in March 2019 joined Jetmir and Florije in their personal capacity as defendants to the counterclaim and alleged that the defendant’s building contract was with them personally or with them as trustees or, alternatively, with F & J Investment;
·the amended defence and counterclaim filed in December 2020 sued Jetmir and Florije as trustees or alternatively F & J Investment as trustee; and
·to that extent, the plaintiff was concerned that the amendment represented a change in Etcell’s position whereby he effectively sought to revert to the earlier form of defence where Jetmir and Florije were sued personally and not in their capacity as trustees.
51If Etcell is given leave to amend, it would be appropriate to agree to the plaintiff’s request that it has the opportunity to amend its pleading, lead more evidence and, if so advised, join its previous advisers. As I understand the position, the plaintiff might wish the advisers to be bound by the findings in this trial. This could become important if Etcell succeeds on grounds which rely or depend upon findings including that, at the time the building contract was entered on 26 October 2010:
(a)F &J Investment was trustee of the M P Trust;
(b)F & J Investment was not a party to the contract;
(c)Jetmir and Florije were no longer trustees of the MP Trust; and
(d)Jetmir and Florije were nonetheless bound by the contract in their personal capacity.
52Although Jetmir and Florije retired as trustees of the MP Trust on 9 October 2017 and F & J Investment was appointed as the new trustee on that day, this was not reflected in the building contract signed on 26 October 2010. An accountancy practice, MJ Business Solutions, effected the change of trustee and Boutique Legal acted in relation to the building contract. It is not clear why F & J Investment as the trustee was not shown in the building contract as the trustee of the MP Trust.
(c) Whether there is an irreparable element of unfair prejudice caused by the amendment arising, for example, by inconvenience and stress caused to individuals or inordinate pressures placed upon corporations which cannot be adequately compensated for whatever costs may be awarded
53There is a clear element of prejudice to the plaintiff if the amendment is allowed. The proceeding began in January 2019. It was first listed for hearing on 27 November 2019 and was relisted on other occasions before the hearing commenced on 23 November 2021.
54As noted by McHugh J in Brisbane South Regional Health Authority v Taylor,[13] there is always a risk of prejudice in delay. It can exist without parties being aware of it. On occasion, important and possibly decisive evidence will have disappeared without anyone knowing that it ever existed.
[13] (1996) 186 CLR 541, 551 Dawson J agreed with the observation.
55Mr Harris also made mention of the prejudice suffered by Jetmir and Florije from the ongoing stress caused by the litigation being further delayed. I accept that continued delay is a relevant prejudice. Courts are today more attuned to the strain, both financial and emotional, which litigation imposes upon individuals. Non-compensable inconvenience and stress are significant elements of modern litigation.[14] But neither the Mustafas nor F & J Investment identified any specific prejudice which they or the trust would or might suffer resulting from the delay - for example, it was not said that a witness was ill or dying. I note also that the evidence in chief has been filed already so any additional evidence will be limited.
[14] Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd (1991) 32 FCR 379, 392 per French J. Quoted with approval by Gummow, Hayne, Crennan, Kiefel and Bell JJ in Aon Risk Service Australia Limited v Australian National University (2009) 239 CLR 175 at [100].
(d) Concerns of case management arising from the stage in the proceeding when the amendment is sought, including the fact that the time of the court is a publicly funded resource and whether the grant of the amendment will result in inefficiency as arising from the vacation or adjournment of trials
56Plainly, the application takes up the time of the court and, if allowed, extends the trial and occupies time and resources which would otherwise be allocated to other litigants. The effect on other litigants is reduced by adjourning the trial to a time at which no other matters are currently listed.
(e) Whether a satisfactory explanation has been given for seeking the amendment at the stage when it was sought
57The affidavit material filed on behalf of Etcell was not particularly informative. First, it was not from the client. Secondly, the affidavit from Etcell’s solicitor Mr Ward did not, in my view, explain in any detail why Etcell wanted to amend and, especially, why it was only now that he sought to make the amendment. Ward expressed an unsubstantiated belief about why the defence and counterclaim was amended in December 2020. He did not speculate about the reason for the latest proposed change. Thirdly, Ward intimated that, at the time of amending the defence and counterclaim in December 2020, Etcell had no cause to believe that when the contract was entered on 26 October 2017 the Mustafas were not the trustees of the MP Trust. Such a statement sat somewhat uneasily with a letter dated 4 March 2019 from the plaintiff’s solicitors which enclosed copies of the MP Trust deed and the deed under which the Mustafas retired as trustee and F & J Investment was appointed trustee of the MP Trust. One might reasonably have expected that the addressee of the letter, Etcell’s former solicitor, would have drawn these facts and documents to the attention of his client. Neither the Ward affidavit nor any other evidence sought to explain or otherwise address this issue. However, in an application such as this, it is not appropriate for me to reach any fixed, or even tentative, conclusions about such matters when no witnesses have been called and examined.
(f) Whether the grant of the amendment will lessen public confidence in the judicial system
58In this case, the grant of leave to amend might reduce public confidence in the judicial system. When a proceeding has been on foot for nearly three years and listed for trial six times, a reasonable member of the public might think that the parties and the court should by now be ready to conduct the trial on the issues determined by the pleadings. By this time, the parties have had ample opportunity to conduct all necessary interlocutory steps and to assess the relative merits of the parties’ arguments.
General considerations
59The ultimate aim of any court is the attainment of justice. This must be the primary guide for any judge. In the circumstances of this case, making due allowance for the requirements of sections 7 – 9 inclusive of the CP Act, and after weighing the competing considerations discussed in Aon and other cases, I consider that the interests of justice are best served by allowing the amendment application.
60The principal reason for allowing the amendment application is that I consider the proposed change is not so significant in the context of the case overall. In pursuing its claim, the plaintiff already had the onus of proving on the balance of probabilities the main elements of its cause of action: the contract, the breach and the loss. To that extent, it was already obligated to address the issue of the parties to the contract, the effect of the change in trustee of the MP Trust, the validity or enforceability of the notices given under the contract and the question of damages. This occurred in a context where both parties appeared to accept that:
·a trustee who enters into a contract will normally incur unlimited personal liability unless by appropriate language or express stipulation such liability is restricted;
·a mere description of the capacity in which a person contracts as that of trustee is insufficient to exclude full liability; and
·the common law does not recognise a trustee as having an additional or qualified legal personality. Accordingly, unless expressly qualified, a trustee who assumes contractual obligations has unlimited personal liability.
61In assessing the application I accept that there will be further delay. While this is unhelpful, especially for the Mustafas and F & J Investment, I do not believe that it creates such an element of unfair prejudice to them so as to outweigh the desirability of clarifying the issues in dispute and ensuring that the case proceeds to trial on those issues with all relevant parties involved.
62Allowing the amendment and refixing the trial will cause the court to allocate the matter another date in the future. However, if other litigants retain their hearing dates and are not postponed in order to accommodate this case the harm to the system is minimised. This case will be allotted a trial date not currently set aside for any other proceeding. While this case is perhaps worse than average, in my experience, it is not uncommon for trials in this division to proceed only on or after the third allocated trial date.
63I referred in the judgment to public confidence and the expectations which a reasonable member of the public might have.[15] While I do not resile from my earlier comments I consider it is important that the public also recognise that the primary duty of a court is to serve the interests of justice. Often this requires a balancing act and reasonable people can disagree about what outcome is appropriate in any particular case. Part of the purpose of a court giving reasons for its decision is to explain why the court made the decision it did.
[15] Paragraph 58 above.
64I have already made some comments about the defendant’s supporting affidavit. While the explanation proffered could have been better, I infer that Ward was probably acting on instructions from his client Etcell. To that extent, the factual matters in the affidavit pertaining to the defendant most probably came from him.
Conclusion
65In summary, I will allow the defendant to amend its defence and counterclaim in the manner set out in the proposed pleading. I direct that the parties confer and attempt to agree upon the form of final orders including costs in order to give effect to this judgment. If the parties cannot agree on the final form of orders, they should file written submissions by 4:00pm on 10 December 2021. The submissions are not to exceed four A4 pages, a minimum 12 point typeface, and 40mm margins on either side of the page. Unless I regard it as deem a hearing to be necessary I intend to determine the final orders and costs on the papers.
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