F J & P N Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2)
[2018] VCC 723
•25 May 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-16-00543
| F J & P N CURRAN PTY LTD | Plaintiff |
| v | |
| ALMOND INVESTORS LAND PTY LTD | Defendant |
---
JUDGE:HIS HONOUR JUDGE COSGRAVE
WHERE HELD: Melbourne
DATE OF HEARING: 15, 16, 17, 20 and 21 November 2017
DATE OF JUDGMENT: 25 May 2018
CASE MAY BE CITED AS: F J & P N Curran Pty Ltd v Almond Investors Land Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION: [2018] VCC 723
RULING (NO 1)
---
Subject:PRACTICE AND PROCEDURE
Catchwords: PRACTICE AND PROCEDURE – amendment of pleadings – application to amend made during closing submissions – amendment includes claim for collateral warranty – whether amendment should be allowed
Legislation Cited: Civil Procedure Act 2010 (Vic); County Court Civil Procedure Rules 2008 (Vic); Evidence Act2008 (Vic)
Cases Cited:Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; Etna v Arif[1999] 2 VR 353; Gordon v Macgregor (1909) 8 CLR 316; Lanzer v Patterson (2007) 18 VR 442
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Arthur | Cahills Solicitors |
| For the Defendant | Dr E Peden | Clear Lawyers |
HIS HONOUR:
1 On the third day of trial, the plaintiff (“Curran”) sought leave to amend its case and file a proposed amended statement of claim.
2 On 17 November 2017, I gave leave to Curran to file the proposed amended statement of claim in part. I allowed it to include the proposed paragraphs 5A and 6A, but disallowed the addition of its proposed collateral warranty claim in paragraph 7.
3 My reasons for that decision are as follows.
Background
4 Curran sought leave to make the following amendments to its statement of claim.
5 Curran wished to add a new paragraph 5A in the following terms:
“In or about late 2007, AIL agreed with Curran, and each of them accepted, that:
(a) the matters in sub-paragraphs 5(a) and (b) were so;
(b) because of those matters, Curran was to be compensated, at the rate of $60 per acre (which was a price slightly above what a normal lease rate was at the time) on an annual basis until the Land or parts of it were developed into an Almond Orchard.
PARTICULARS
The said agreement and acceptance of AIL was so made and given by Graham Johns, the orchard manager of AIL’s Piangil Almond Orchard, and a director of AIL.”
6 Curran wished to add a new paragraph 6A in the following terms:
“Further, in April 2010, AIL, by its orchard manager and one of its directors, Graham Johns (“Johns”) represented to Curran that:
(a) there was a lull in the Almond industry and they did not have the investors at the time;
(b) AIL would like an extension of the option granted by the Option Agreement for a further five years on existing terms;
(c) Curran would continue to receive the crop compensation in the future under the extended option period as it had received for the past four years; and
(c) the crop compensation would remain the same.
(“the Johns representation”)
PARTICULARS
The Johns representation was made by Johns to Frank Curran, a director of Curran, in discussions between them which took place at the farmhouse at the Land and was to the effect pleaded.”
7 Curran wished to amend the existing paragraph 7 as follows:
“Subsequently by email dated 30
in or aboutApril, 2010, AIL represented, and in consideration thereof warranted, to Curran that it wished to extend the Call Option Period under the2006Option Agreementand Amendment Deedfor a further five years, that is until 15 June, 2015, on existing terms, including the existing crop compensation arrangements as requested by Curran (“the representation”).PARTICULARS
The representation is in writing.
It was made by email dated 30 April, 2010 from Vanessa Overall, head of Legal & Corporate Governance of AIL Funds Management for and on behalf of AIL, to Frank Curran on behalf of Curran. A copy of the said email may be inspected at the offices of the Plaintiff’s solicitors by prior arrangement.
The existing crop compensation arrangements as requested by Curran were to the effect as alleged in sub-paragraphs 6A(c) and (d) hereof.”
8 Curran’s application was made in a context where at the conclusion of the plaintiff’s evidence, I commented to Curran’s counsel that the statement of claim should be regularised so that paragraph 7 of the statement of claim reflected the evidence given in court of the conversation with Johns (and referred to also in paragraph 13 of submissions relied upon by Curran).
9 Curran applied to amend its statement of claim in this matter, substantially in order to make the pleading conform to the evidence as it unfolded at trial. I use the word “substantially” because there were some other minor amendments involving spelling errors and stylistic matters. However, the major amendments were found in paragraphs 5A, 6A and 7 of the proposed amended statement of claim.
10 Curran submitted that the 5A amendment was necessary to determine the real question in controversy between the parties in the proceeding in accordance with Rule 36.01(a) of the County Court Civil Procedure Rules 2008 (Vic). It was submitted that this was in accordance with the Court of Appeal decision in Etna v Arif,[1] where, as was the case here, the court invited counsel to consider the possibility of pleading amendment.
[1][1999] 2 VR 353.
11 Primarily, Curran submitted the amendment should be allowed as Mr Curran was, without objection from the defendant, permitted to give evidence in relation to the discussion that he allegedly had with Johns in late 2007, when Johns agreed the land was no longer suitable for use by Curran for normal dry land cropping. Further, at the end of examination-in-chief, I asked questions of Mr Curran and one of them concerned the timing of the discussion he had with Johns. He clarified that it was in late 2007. Thus, Curran gave the evidence substantiating the paragraph 5A amendment without objection from the defendant.
12 Similarly, in respect of the proposed paragraph 6A, it was submitted that Curran gave evidence about the Johns representation without any objection that it had not been pleaded.
13 In support of the addition of its collateral warranty claim in paragraph 7, the plaintiff referred to dicta in the Court of Appeal decision of Lanzer v Patterson,[2] and submitted that the amendment should be allowed because, consistently with the decision of Ashley JA in that case, the claim was simply characterising the facts already before the court as falling into an additional legal category. Further, the 30 April email referred to the conversation between Johns and Mr Curran in 2010 and Ms Overall had given evidence that nobody other than Mr Johns was present during the discussions with Mr Curran. Accordingly, it was said that the 30 April email made it clear that evidence would need to be adduced before the court in respect of the conversation.
[2](2007) 18 VR 442.
14 The defendant (“AIL”) objected to the proposed amendments. It relied upon an affidavit sworn by its solicitor, together with submissions from Counsel. AIL’s arguments were as follows.
15 First, the proposed new amended statement of claim appeared to seek to add matters which the plaintiff had not originally sought in its proposed amended statement of claim in January 2017. The January 2017 version of the statement of claim sought to join Vanessa Overall as a defendant and raised the issue of crop compensation payable to the plaintiff under the option agreement. It also sought to plead the collateral warranty claim that appeared in paragraph 7 of the new amended statement of claim. The current proposed amended statement of claim also sought to add the alleged conversations between Mr Curran and Mr Johns in 2007 and 2010. The defendant suffered prejudice because, had this been raised in January, the defendant would have had the benefit of evidence from Mr Overall, who died in July 2017. Namely, he could have given evidence regarding his conversations with Mr Johns, and what had occurred. Mr Overall could have either corroborated Mr Curran’s evidence, or provided his own version of what Mr Johns had told him had occurred.
16 Secondly, the defendant did not come to court to meet the proposed amended case. It conducted the case on a different basis and accordingly had made various forensic decisions with respect to objections, cross-examination and submissions. Had it known that a new case would be brought, the defendant could have run its case differently. In particular it would have chosen different witnesses to give evidence in favour of its case, and further cross-examination would have been conducted to test Mr Curran in relation to the alleged conversations. Further, the defendant could have sought an order under section 136 of the Evidence Act2008 (Vic) in relation to some of the evidence given, but did not, because it appeared that the evidence only related to background concerning the carrying out of works on the land in 2007.
17 Thirdly, if the plaintiff were to be allowed to amend, the defendant said that it would require time and the opportunity to make enquiries and gather evidence. Even if such time were granted, the defendant intimated that it may still suffer prejudice, due to the passage of time and the death of the two persons most intimately involved in the new matters alleged. Further, there was a dearth of evidence on this issue as the case currently stood. The court book did not contain any materials concerning the newly pleaded matters.
18 Fourthly, it submitted that it should not form the basis of a pleading which the defendant would need to meet at short notice. To do so would cause embarrassment to the defendant, as well as significant prejudice. The defendant submitted that in Gordon v Macgregor,[3] Griffith CJ noted it is a “very dangerous thing” after the close of evidence to allow an amendment to raise a point founded on some oral statement of a witness which may be perfectly complete so far as it is relevant to the issues being tried, but which if it were given with reference to entirely different issues, would be incomplete.[4]
[3](1909) 8 CLR 316.
[4]Ibid, 321.
19 Fifthly, the addition of the new collateral warranty claim would require the issue of consideration to be ventilated. Further the defendant, at the time of the plaintiff’s application, was not in a position to determine what evidence it would need in respect of that issue.
20 Sixthly, Counsel for the defendant indicated that if the amendment were allowed, the hearing would need to be adjourned to enable it to determine what other evidence existed about the new allegations. Such delay would be inconvenient to the parties, the court, and other litigants seeking to have cases heard. The affidavit from the defendant’s solicitor indicated also that if the hearing were to be adjourned and reconvened later, the length of the hearing could increase by two or three days due to the need to conduct further cross-examination, and potentially call new witnesses.
21 Next, the defendant asked the court to consider the further burden on the judicial system and the impact on the wider public should the amendment be allowed. In particular, it submitted that the trial judge would be deprived of writing his judgement soon after completion of the evidence and submissions, because of a lengthy break between the first hearing of the trial and the reconvened hearing.
22 Finally, the defendant argued that the plaintiff had not explained the reasons for its delay, particularly in light of the fact that in January 2017 it had turned its mind to these issues, and then had decided not to pursue them. In considering the High Court decision in Aon,[5] their Honours were particularly critical of a failure to explain delay in making an application for amendment.
[5]Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175.
23 In response to AIL’s submission, Curran contended:
(a) there would be limited prejudice to the defendant if the amendment were allowed, because it would not need to consider new evidence. Ms Overall conceded that the only person from the defendant who was present at the relevant conversations was Mr Curran. Thus, it was said that there could not be any further evidence which the defendant could bring forward. Evidence from Mr Overall could not have assisted the court, because, he was not present during the relevant conversations.
(b) the defendant was put on notice about the collateral warranty claim in the proposed amended statement of claim in January 2017. A forensic decision was made by the plaintiff not to pursue the issue at that point. But given the importance of the oral representation in that it elucidates or “provides the necessary ingredient” to the email representation, it was appropriate that it be pleaded.
(c) the defendant did not indicate what substantial evidence could have been called, or explored in cross-examination of Curran if the amendment had been made earlier.
Consideration of the issues
24 The death of Mr Overall earlier this year is unfortunate. At this point, I am not sure about the extent to which he could have given useful evidence – he was not party to, or present at, the two conversations which allegedly occurred between Curran and Johns. Given Mr Overall’s importance within the defendant organisation, it might have been the case that he had discussions with Johns regarding his dealings with Curran. If so, although the conversations would probably constitute hearsay, they might well have been admissible under the Evidence Act as an exception to the hearsay rule because Johns is dead.
25 I note that the email from Ms Overall referring to her discussions with Johns is in evidence. Presumably, this email to Curran sets out the essence of what Johns told her of his talks with Curran.
26 If there were other documentary evidence on the point, I would have expected the defendant to discover and adduce the same in support of its case. Reference was made to the possible existence of file notes or other documents. However, nothing specific was identified. The solicitor did not say in his affidavit if such documents existed or whether they were ever looked for. I would assume that such documents would routinely be sought by a company in the context of litigation like the present.
27 The fact that Curran mentioned aspects of these possible amendments in January 2017 is, in my view, of no relevance. The fact is that the plaintiff did not pursue all the foreshadowed amendments from January but chose to run a more limited case. The defendant should not have to be concerned about potential claims which the plaintiff might have made but decided not to. The plaintiff has not addressed why the matter was raised earlier and not pursued, only to be raised again now during the trial. It is not unfair to limit Curran to the case it decided to run at trial. Essentially, I raised the question of amendment at the end of the plaintiff’s evidence due to the disconformity between the evidence as it emerged at trial and the then existing form of the statement of claim.
28 If the amendments were to be allowed, then I agree that some time should be given to the defendant to deal with the consequences.
29 AIL received the proposed pleading on the evening of 16 November 2017 and the following day in court referred to nothing specific in terms of documents which it wanted to re-examine or look for. The same comment could be made with respect to the questioning or recalling of potential witnesses. AIL is a small company comprising four persons and it does not appear that there would be much scope to call any other witnesses from the company given that Johns died in 2014 and Mr Overall died earlier this year.
30 Whether Curran raised the matter in January 2017 or later in November 2017, that timing is probably of limited significance to the extent that Johns died in 2014. However, it is odd for Curran to renew the amendment application during the trial in November when it raised possible amendments in January but ultimately did not pursue them – and to act in this way without any, or any sufficient, explanation.
31 The delay in making the application is a problem both for the parties and the court. If AIL were given some time to deal with all the amendments, then the hearing would most likely be delayed. This would involve a loss of momentum in the trial and require some duplication of effort in becoming familiar again with its details. However, the delay was not an insurmountable problem in circumstances where the court was prepared to make special arrangements to have the trial continue in December 2017.
32 If the amendments were allowed, AIL’s solicitor suggested the case might run a further two or three days. I am inclined to think that the trial would not be extended by more than two days.
33 During the course of the application, AIL referred to the decision of the High Court of Australia in Aon Risk Services Australia Limited v Australian National University,[6] where the court referred to various factors which were appropriate to take into account in deciding whether or not to permit a late amendment to a pleading. The factors which could be weighed in deciding how to exercise the discretion of the court with respect to amendments are as follows:
[6](2009) 239 CLR 175.
(a) whether there will be substantial delay caused by the amendments;
(b) the extent of wasted costs that will be incurred;
(c) whether there is an irreparable element of unfair prejudice caused by the amendments 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 amendments are sought, including the fact that the time of the court is a publicly funded resource and whether the grant of the amendments will result in inefficiency arising from the vacation or adjournment of trials;
(e) whether a satisfactory explanation has been given for seeking the amendments at the stage when it was sought;
(f) whether the grant of the amendments will lessen public confidence in the judicial system.
34 I note that this list of factors is not exhaustive. Ultimately, all matters arising in any particular case which are relevant to the exercise of the court’s discretionary power should be taken into consideration.
(a) Whether there will be substantial delay caused by the amendment
35 As noted above, if the proposed amendments are allowed, there will not be any substantial delay beyond about three weeks. The court was prepared to make special arrangements to ensure the trial could be finished within 2017. At the time of the application, the only reason that might not happen would be due to the unavailability of witnesses or counsel.
(b) The extent of wasted costs that will be incurred
36 In my view, the extent of any wasted costs would have been limited. This was not a situation in which the plaintiff has run its case on a particular basis, which it has abandoned, and sought to replace it with an entirely different case. In that situation, the parties would find that the trial and much of the interlocutory work is totally wasted because the former claims or causes of action are dropped and the plaintiff creates wholly new issues which need to be addressed. In effect, it means the case begins again and the defendant is forced to deal with the new and different allegations which the plaintiff has now decided constitute the basis of its case.
37 Here, the plaintiff was not seeking to significantly recast its case and render nugatory the evidence which has already been heard. Rather, it was seeking to expand its case, to amend its pleading to ensure better conformity between the evidence as it unfolded and the statement of claim and to add a new cause of action. The plaintiff did not seek to call any more evidence. In such circumstances, I did not consider that there would be any significant wasted costs.
(c) Is there an irreparable element of unfair prejudice caused by the amendments?
38 I was not satisfied that there is any irreparable element of unfair prejudice caused by the amendments.[7] To some extent, there was a problem due to the deaths of Mr Johns and Mr Overall. However, Mr Johns has been dead since 2014 and, to that extent, there was always going to be a problem due to the absence of his evidence. The defendant did not suggest precisely how it could have acted differently if the claims had been included in the plaintiff’s pleadings at the commencement of the trial.
(d) Case management principles
[7]Subject to my comments about the proposed new cause of action.
39 Plainly, the application took up additional time of the court and, if allowed, would extend the trial and occupy time and resources which would otherwise be allocated to other litigants. The effect on other litigants would be reduced perhaps by adjourning the trial to a time at which no other matters were currently listed. That is precisely what I proposed to do in the current case by continuing the trial at a date when, intentionally, no other matters were listed.
(e) A satisfactory explanation for the timing of the application
40 The plaintiff has not provided a satisfactory explanation for leaving it until now to make the amendment application. On the one hand, the application is made to endeavour to obtain consistency between the evidence and the pleadings. However, there were grounds for considering that, especially in circumstances where part of the amendments was referred to in January this year, the potential significance of the amendments was such that they ought to have been made earlier.
(f) Public confidence
41 In this case, the grant of the amendments might reduce, to a degree, public confidence in the judicial system insofar as it would appear a party can, after the completion of the evidence and close to the conclusion of a proceeding, raise a new issue which it alluded to, but did not persist with, earlier in the litigation process. However, the public would also be able to see that the court seeks to do justice by assessing the merits of particular applications.
Consideration
42 The ultimate aim of any court is the attainment of justice. This must be the primary focus for any judge. In the circumstances, making due allowance for the requirements of sections 7 to 9 inclusive of the Civil Procedure Act 2010 (Vic), 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 plaintiff to amend its claim to introduce paragraphs 5A and 6A and to make the other minor amendments.
43 I have reached this conclusion for the following reasons.
44 First, while the amendment application was late, it sought to expand an existing, or part of an existing, claim for damages and does not abandon or render irrelevant the claims and evidence already canvassed at trial.
45 Secondly, the plaintiff did not propose to call any further evidence. This would reduce inconvenience and costs associated with the amendments.
46 Thirdly, although the grant of the amendments might well cause the defendant to incur further costs and expense in addressing the new points which were not previously in the statement of claim, I did not consider that the defendant faced any irreparable prejudice so great as to warrant the total refusal of the plaintiff’s application.
47 Finally, a matter of considerable importance in this context is that the evidence the subject of the amendment application was given without objection. At the time, the defendant took no point to the effect that the court should disallow or ignore the evidence because it was inconsistent with the plaintiff’s pleading. Again, after I asked Curran some questions and he gave some further evidence, the defendant raised no objection. Indeed, even when I gave both parties the chance to ask more questions arising out of the matters I addressed with the plaintiff, the defendant neither sought to further question Mr Curran nor raise any objection in respect of the evidence given.
48 If the problem caused by the proposed amendments is as significant as it is now said to be, why was no objection taken at the time? If it were an important matter, I would have expected to receive either an objection from the defendant or at least a request for some period of adjournment to consider the implications of the evidence and/or to consult with the client and/or instructing solicitors. On the face of it, the defendant seems to have sat on its hands regarding the events at trial and has only now objected to the evidence.
49 In referring to the defendant’s failure to object, I should not be taken as approving the conduct of the plaintiff at the trial. Given that the evidence might well be of some significance in the context of the plaintiff’s claims, I would have expected the pleading to be in a different form before the trial began. However, ultimately, the parties and the court operate under an adversarial system and even if the plaintiff has pushed the boundaries, the defendant could have, and should have, acted more promptly in defence of its position.
50 While I am prepared to allow Curran to amend to include the proposed paragraphs 5A and 6A, I do not allow it to introduce a collateral warranty claim. True it is that such a claim has some connection with the other amendments which I have permitted. However, while the new paragraphs 5A and 6A pleaded some new factual material given in evidence, in my view, primarily they supported existing claims for misrepresentation. To that extent they failed to raise a new cause of action which previously did not exist. The same could not be said of the amendment seeking to add a claim for collateral warranty. Although there was some overlap on the factual background, such a collateral warranty claim raised issues which were not otherwise canvassed in the existing pleading.
51 AIL’s counsel rightly pointed out that, until the plaintiff produced the proposed amended pleading after the completion of the evidence, AIL did not understand that the case involved a warranty claim. The main thrust of the case was the construction argument and the misrepresentation case (whereby AIL’s alleged misrepresentation in 2010 affected Curran’s agreement to enter into the 2011 lease). I do not consider it appropriate that AIL should have to address a new and different cause of action at this point of the trial. This is especially so when the plaintiff has not put before the court any or any sufficient material to justify the granting of such an indulgence.
52 In the circumstances, I ordered that:
(a) Curran has leave to file and serve an amended statement of claim substantially in the form sent to the defendant‘s counsel on 16 November 2017. The proposed paragraph 7 is to be further amended to delete the claim to a collateral warranty.
(b) AIL has leave to file and serve a defence to the amended statement of claim.
(c) Curran is to pay AIL’s costs, if any, thrown away by reason of the amendment, such costs to be taxed on a standard basis in default of agreement.
53 I note that having given my ruling in court but not my reasons, I raised with counsel the question of convenient dates in December when the trial could continue. The defendant’s counsel asked for a brief adjournment to obtain instructions. She returned to court shortly after to advise that her client was content for the trial to proceed immediately. The defendant sought no adjournment of the hearing but obtained leave to further cross-examine Mr Curran.
2
5
0