Fay v Moramba Services Pty Ltd (No 3) - [2008] NSWSC 1037

CITATION: Fay v Moramba Services Pty Ltd (No 3) [2008] NSWSC 1037

HEARING DATE(S): 17 September 2008

JURISDICTION: Equity Division
Expedition List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 17 September 2008

DECISION: Leave granted to amend Further Amended Statement of Claim.

CATCHWORDS: PROCEDURE – application to amend Further Amended Statement of Claim – where amendments sought at late stage of hearing – prejudice to defendants – where amendments will require adjournment and recall of defendants’ witnesses – where adjournment and costs order can ameliorate prejudice occasioned to defendants – where adjournment more prejudicial to plaintiffs than to defendants.

CATEGORY: Procedural and other rulings

PARTIES: 3365/07
Garrick E Fay (first plaintiff/first cross defendant)
Dallas Fay (second plaintiff)
Lisa Fay (second cross defendant)
Moramba Services Pty Ltd (defendant/cross claimant)
5032/06
Garrick E Fay (first plaintiff/first cross defendant)
Dallas Fay (second plaintiff/second cross defendant)
Justinthyme Pty Ltd (third plaintiff/third cross defendant)
Henry Kai Tong Au (first defendant/first cross claimant)
Hugh Edward Halliday (second defendant/second cross claimant)
Allan Ni Kwan Kwok (third defendant/third cross claimant)
Stephen Thomas Pollitt (fourth defendant/ fourth cross claimant)

FILE NUMBER(S): SC 3365/07; 5032/06

COUNSEL: Mr D E Grieve QC w Ms J F Merkel (plaintiffs)
Mr R M Smith SC w Mr P W Flynn (defendants)

SOLICITORS: Whittens Lawyers & Consultants (plaintiffs)
Corrs Chambers Westgarth (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EXPEDITION LIST

BRERETON J

Wednesday, 17 September 2008

5032/06 Garrick E Fay & 2 Ors v Henry Kai Tong Au & 3 Ors
3365/07 Garrick E Fay & 1 Or v Moramba Services Pty Ltd

JUDGMENT (ex tempore; on application to amend Statement of Claim, see p 461 of the transcript)

1 HIS HONOUR: The plaintiffs seek leave to amend their Further Amended Statement of Claim, inter alia by adding a new paragraph 27AA in the form contained in the document entitled “Second Further Amended Statement of Claim”, initialled by me and placed with the papers. That paragraph asserts – for the first time, at least in the body of the pleading – a breach of duty by the trustees in giving due consideration to the exercise of their power as trustees of the testamentary trust constituted by clause 3 of the deceased’s Will to determine whether that trust should vest, and the shares formally held by the deceased in Leerac Pty Ltd (“Leerac”) transferred to such of the beneficiaries as they should determine.

2 It cannot be said that the argument that that possibility has not been given due consideration is untenable, and I would not refuse leave to amend on that ground. The issue is, to an extent, raised by the relief claimed in paragraph 1(a) of the pleading, which specifically claims a declaration that the defendants, in breach of their duty, failed to give real and genuine consideration to winding up the trusts of the Will of the deceased – which can only be a reference to the clause 3 of the trust. A duty to give…

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: [2008] NSWSC 1037
Decision Date: 17 September 2008

CaseChat Overview and Summary

In the case of Fay v Moramba Services Pty Ltd (No 3), the parties were involved in a legal dispute concerning an application to amend a Further Amended Statement of Claim. The matter was before the court at a late stage in the hearing. The defendants, Moramba Services Pty Ltd, argued that the proposed amendments would cause significant prejudice, necessitating the adjournment of the trial and the recall of their witnesses. The plaintiffs, however, contended that the potential prejudice to the defendants could be mitigated by an appropriate adjournment and a costs order. The court was required to balance the prejudice to the defendants against the potential prejudice to the plaintiffs if the application was denied.

The legal issues before the court included the circumstances under which an amendment to a pleading could be permitted at a late stage in the proceedings, the extent of prejudice to the opposing party, and the availability of remedies to mitigate such prejudice. The court considered the principles established in previous cases, which emphasise the importance of fairness and the preservation of the right to a just hearing. The court also weighed the potential for prejudice to both parties and the effectiveness of the proposed remedies in addressing that prejudice.

In reaching its decision, the court found that while the proposed amendments would indeed cause some prejudice to the defendants, the potential prejudice to the plaintiffs would be greater if the application was denied. The court recognised that the adjournment and costs order could sufficiently ameliorate the prejudice to the defendants. Consequently, the court granted the application to amend the Further Amended Statement of Claim, emphasising the importance of maintaining a balance between the rights of both parties to a fair trial.

The final orders of the court included permission for the plaintiffs to amend their Further Amended Statement of Claim, with the condition that the defendants would be compensated for any additional costs incurred due to the adjournment and the recall of their witnesses. The court also directed that the plaintiffs bear the costs of the application. This decision underscores the court's commitment to ensuring a fair and just resolution of disputes, while also recognising the need to manage and mitigate the effects of procedural delays on all parties involved.

Orders