Gentry Brothers Pty Ltd v Wilson Brown & Associates
[1995] FCA 48
•14 FEBRUARY 1995
CATCHWORDS
PRACTICE AND PROCEDURE - Leave to amend cross-claim - application made at commencement of hearing - opportunity to meet issue raised - expert evidence required - utilisation of time and resources allocated for hearing.
Gentry Brothers Pty Ltd v Wilson Brown & Associates Pty Ltd & Ors
No QG93 of 1992
Kiefel J Brisbane 14 February 1995
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG93 of 1992
BY ORIGINAL ACTION
BETWEEN:
GENTRY BROTHERS PTY. LTD.
Applicant
AND:
WILSON BROWN & ASSOCIATES PTY. LTD.
First Respondent
AND:
BRUCE JAMES BROWN
Second Respondent
AND:
ANSCAPE PTY. LTD.
Third Respondent
AND:
BRIAN JOHN CLARKE
Fourth Respondent
AND BY FIRST CROSS CLAIM
BETWEEN:
ANSCAPE PTY. LTD.
First Cross Claimant
AND:
BRIAN JOHN CLARKE
Second Cross Claimant
AND:
GENTRY BROTHERS PTY. LTD.
First Cross Respondent
AND:
JAMES GENTRY
Second Cross Respondent
AND:
CIARAN GENTRY
Third Cross Respondent
AND:
WILSON BROWN & ASSOCIATES PTY. LTD.
Fourth Cross Respondent
AND:
BRUCE JAMES BROWN
Fifth Cross Respondent
AND BY SECOND CROSS CLAIM
BETWEEN:
WILSON BROWN & ASSOCIATES PTY. LTD.
First Second Cross Claimant
AND:
BRUCE JAMES BROWN
Second Cross Claimant
AND:
GENTRY BROTHERS PTY. LTD.
First Second Cross Respondent
AND:
JAMES GENTRY
Second Second Cross Respondent
AND:
CIARAN GENTRY
Third Second Cross Respondent
JUDGE MAKING ORDER: Kiefel J.
DATE OF ORDER: 14 February 1995
WHERE MADE: Brisbane
MINUTES OF ORDERS
THE COURT GRANTS LEAVE:
To amend the defence and cross-claim by adding the proposed paragraphs 10A, 16A-D, 17, 17(aa), (n) (o) and 27(c).
THE COURT ORDERS THAT:The first and second respondents' costs of and incidental to the amendment, including further pleading required and the time taken in hearing the application up to this time, be taxed and paid by the third and fourth respondents.
THE COURT DIRECTS THAT:
The first and second respondents file and serve copies of their amended pleading by 4.00 p.m. on 15 February 1995.
The third and fourth respondents forthwith notify the applicant and James and Ciaran Gentry of the orders made dismissing the application and their cross-claims and of the amendment permitted.
NOTE:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION No. QG93 of 1992
BY ORIGINAL ACTION
BETWEEN:
GENTRY BROTHERS PTY. LTD.
Applicant
AND:
WILSON BROWN & ASSOCIATES PTY. LTD.
First Respondent
AND:
BRUCE JAMES BROWN
Second Respondent
AND:
ANSCAPE PTY. LTD.
Third Respondent
AND:
BRIAN JOHN CLARKE
Fourth Respondent
AND BY FIRST CROSS CLAIM
BETWEEN:
ANSCAPE PTY. LTD.
First Cross Claimant
AND:
BRIAN JOHN CLARKE
Second Cross Claimant
AND:
GENTRY BROTHERS PTY. LTD.
First Cross Respondent
AND:
JAMES GENTRY
Second Cross Respondent
AND:
CIARAN GENTRY
Third Cross Respondent
AND:
WILSON BROWN & ASSOCIATES PTY. LTD.
Fourth Cross Respondent
AND:
BRUCE JAMES BROWN
Fifth Cross Respondent
AND BY SECOND CROSS CLAIM
BETWEEN:
WILSON BROWN & ASSOCIATES PTY. LTD.
First Second Cross Claimant
AND:
BRUCE JAMES BROWN
Second Second Cross Claimant
AND:
GENTRY BROTHERS PTY. LTD.
First Second Cross Respondent
AND:
JAMES GENTRY
Second Second Cross Respondent
AND:
CIARAN GENTRY
Third Second Cross Respondent
CORAM:Kiefel J.
DATE:14 February 1995
PLACE:Brisbane
REASONS FOR JUDGMENT
At the commencement of this trial and after matters pertaining to the non-appearance of the applicant were dealt with, the third and four respondents sought leave to amend their defence and cross claims in substantial respects. The application was brought in the background of proceedings commenced in 1992 and where the applicant and those respondents had pressed the court in about September 1994 for the prompt allocation of dates for hearing. Since the matter was expected to take some two weeks, the parties were notified some time in advance and in early October 1994, that two weeks commencing on 13 February 1995 were set aside for the hearing.
The case concerns the sale of an island upon which a cattle property was conducted by the applicant to the third respondent and a contemporaneous sale to the applicant of a house property together with some monies with a loan of some monies. The case, principally, concerns representations concerning the profitability of the property and the use to which the island might be put. I am informed that the applicant and the Messrs Gentry have been served with notice of the proposed amendments prior to the commencement of the hearing on 13 February and an affidavit to that effect is to be filed.
I shall take the document containing the proposed amendments and which was handed to me as exhibit 1. It is convenient to deal with the amendments sought by reference to the two topics which remain. A third topic that, described as "notional interest" which was said to be in the nature of opportunity cost in the sense of Hungerfords case and to which paragraphs 27(f) and (h) of the proposed amended cross claim refer is not now pursued.
The first area of amendment concerns representations as to the right of access to the island. It is now sought to be alleged that the second respondent, Brown, and those associated with the applicant made representations to the effect that there existed a right of access over lands owned by the Lynch family, and this is said to provide the most direct route to the island and is the only practicable means of moving cattle. Those representations made by the Messrs Gentry in the absence of Mr Brown are not pursued against him.
The third and fourth respondents say that they were unaware that in fact no such right of access existed and that a licence held by a predecessor entitled to the applicant was never transferred until the property was put to auction in October 1994 and the matter necessarily investigated. It then took them until about December 1994 to obtain the facts and history relating to the rights which had been represented, and it was not until 27 January 1995 that the first and second respondent and the applicant were informed of the amendments sought.
The effect on the value of the property is potentially very substantial, and, indeed, I understand it will be contended that it cannot as a result be valued by having regard to the use of a cattle property. Whilst it struck me as odd that the fact remained unascertained until October 1994, for present purposes I accept that this may have been the case. My concern on this application, but which is more critical perhaps to the second topic of amendment, is that the first and second respondents have a proper opportunity of meeting the issue raised and in sufficient time to enable the matter to be heard in the time allocated.
Mr Ryan for the first and second respondents did not contend that they would not be able to meet the alleged representations. They could be dealt with in the evidence of witnesses already to be called. A valuation has been provided by the third and fourth respondents, and the first and second respondents have had their valuer attempt to deal with the task as a matter of urgency. A draft has been prepared by him, although no doubt Mr Ryan will need some little time to confer with
him. It should not, however, unduly delay the hearing. In these circumstances, I propose to grant leave to amend the defence and cross-claim by adding the proposed paragraphs 10A, 16A to D, 17, 17(aa), (n) and (o), and paragraph 27(c).
The other area of amendment concerns losses associated with the continued operation of the cattle property since the date of purchase. As originally pleaded, the third respondent particularised those losses for the 1992 financial year and for the period to September 1992. It is now sought to add claims for losses suffered in the financial years ended 30 June 1993, 30 June 1994 and the period to 31 December 1994, together with anticipated operating losses for another two years. The claim in this respect will thereby increase from about $138,000 to almost $700,000.
The relevant documents, which came into existence after the third respondent last pleaded in about September 1992, were not discovered to the first and second respondents until very recently. Further, whilst the third respondent's accountant prepared the accounts for the year ended 30 June 1993 on 3 June 1994, they were not provided to the other parties. The last mention of a loss for that period had been, I was told without objection, in early 1993 during mediation proceedings. The accounts for the year ended 30 June 1994 were not prepared, it appears to me, as a matter of choice until 30 January 1995, and then they were not promptly provided.
At the latest (but realistically much earlier) when the dates for hearing were allocated, the third respondent ought to have updated its claim and given sufficient notice of it together with documents associated with it. It may well have been that no adjournment would thereby have been rendered necessary.
Amendments are not, I consider, a matter of right. Practitioners in recent times would have become aware that late amendments, and particularly those sought on the morning of a trial, are less likely to be tolerated than they perhaps may have been in the past and particularly where they would result in a lengthy adjournment and a waste of court time. I am now faced with the position where it is estimated the hearing of the respondent's cross-claims will occupy at least seven days, which leaves me to wonder what was to occur if the applicant had appeared and proceeded with its application. As I indicated to the parties during submissions, I consider it is an important consideration that the resources of the court made available for this hearing be utilised but, of course, in circumstances where the first and second respondents are able to meet a claim against them. The fact that no explanation for the delay in notifying further claims is given does not, I consider, weigh against that consideration. If I was satisfied that the first and second respondents could not prepare in sufficient time for the matter to be proceeded with and concluded in the time available, that would provide sufficient warrant for disallowing the amendments.
The question which then arose was as to the time which it would take the accountant for the first and second respondents to undertake this task. Given the importance of this matter and the fact that he had not directly sworn as to this, the matter was stood over until this morning at which time he gave evidence. Whilst Mr
Dobbie, the accountant for the third and fourth respondents, says that with the cooperation of his staff and with the person involved in the keeping of the books, the fourth respondent's wife, and assuming all source documents are available an audit might be undertaken and assuming all source documents are available, this might be achieved within one day or so.
Putting aside details as to the exact nature of the audit required for this case and in particular whether it could conveniently be qualified in some respects, such as to the existence of the property and cattle and items of equipment upon it, Mr May says that it is his practice to go beyond mere transactions, which were the basis of Mr Dobbie's estimation. In his view it is necessary to investigate assets and to familiarise himself with the affairs of the third respondent which appears to be an administrative company with which a number of other companies are associated and in respect of various ventures and to check upon the inter-relationship between them, the assets of the third respondent and any financial accommodations made. He gave us examples of matters affecting the question of profit or loss, the amounts allowed for depreciation of assets and interest charges. He says that two to three weeks may be necessary although I take it since he has not had sufficient time to determine this properly that it could well be shorter. It remains the fact, however, that one to two days are necessary to determine even the extent of the audit in question. If this matter is to proceed, it needs to commence, on the third and fourth respondents estimate, by Thursday.
I am not in these circumstances prepared to require the first and second respondents to meet a substantial claim on what appears to me to be likely to be an ill informed basis nor to require it to attempt to obtain expert accounting evidence whilst the trial is on foot. I therefore disallow the amendments to paragraph 27(e)(ii) to (iv) and (g). The third respondent's case with respect to operating losses can proceed as per the previous pleading, paragraphs 27(e) and (f).
The order will be that the first and second respondents' costs of and incidental to the amendment, including the further pleading required and the time taken in the hearing of the application up to this time, be taxed and paid by the third and fourth respondents.
I certify that this and the preceding seven pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.
Associate
Date:14 February 1995
Counsel for the first and second
respondents:Mr D.G. Ryan
Solicitors for the first and second
respondents:Thynne & Macartney
Counsel for the third and fourth
respondents:Mr J.W. Lee
Solicitors for the third and fourth
respondents:Ffrench Wright & Dennett
Date of Hearing: 13, 14 February 1995
Place of Hearing: Brisbane
Date of Judgment: 14 February 1995
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