Hay & Hay v Australian Fresh Seafood Pty Ltd No. DCCIV-02-1409
[2004] SADC 65
•23 April 2004
BRUCE ROBERT HAY AND DENISE MARY HAY v AUSTRALIAN FRESH SEAFOOD PTY LTD
[2003] SADC 65Judge Bishop
Civil
The trial of this action, both claim and counterclaim, which had been estimated to occupy five days, commenced on Monday 19 April 2004, when the first plaintiff began giving evidence. The hearing has been punctuated with remarks of counsel to the effect that negotiations for settlement are proceeding. Yesterday, on the third day of trial, after the first plaintiff had completed his evidence-in-chief (subject to any other matters arising), Mr Rochow, counsel for the defendant, made oral application further to amend the defence so as to plead that, by virtue of statutory provisions contained in s223LB of the Real Property Act and s32 of the Development Act, the plaintiffs’ claim cannot succeed. Previously, the defendant had only pleaded that that consequence should result by virtue of the statutory provisions contained in s26 of the Law of Property Act.
In making this application for leave further to amend the defence, Mr Rochow explained the reasons for the delay in that regard. He said (T 179),
“It occurred to me as I was reading through the document that they [the legal defences] probably aren’t articulated really to respond to the rule in the way that they should ... We say on these points of law they [the plaintiffs] must fail.”
He also said (T 202),
“The issues regarding s223LB were brought into sharp focus last week when we delivered our list of authorities, told my friend last week that we were going to use s223LB in these proceedings.”
I asked Mr Rochow (T 202), “Where did you tell him that?” He replied (T 202-204),
“By sending a list of authorities which your Honour has. 223LB is there in quite plain terms, and we also refer in the list of authorities to Pump v Payne which is a decision of Perry J of (1990) 158 LSJS 379.
HIS HONOUR: With that foreknowledge, why didn’t you apply to amend before the evidence began?
MR ROCHOW: Your Honour is right. We probably could have –
HIS HONOUR: It seems to me you have sat on this.
MR ROCHOW: That is a fair comment in this regard: we did not plead s223LB because the view was taken, after I discussed it with my instructor, that para.3 covered those matters in broad terms. As the evidence progressed, it seemed to me that it did need to be more poignantly pleaded and that’s the reason why the application is being made. It was there all along, and your Honour is probably right we should have applied last Friday or Monday.
HIS HONOUR: How can it possibly be said that, before you rose seeking to make this amendment, your pleadings covered the Real Property Act and the Development Act? Those Acts are just not referred to in your pleadings at all.
MR ROCHOW: That’s right, they are not. They are not referred to in terms. Where it is implicit, and I concede immediately it was implicit, is at 3.1.1.5. That’s the highest I can put it. I concede that. [That sub-paragraph had pleaded, “the parties had not come to terms on fundamental issues like who of the parties would arrange Council consents, EPA licences and compliance with statutory requirements.”] We say, though, that, even with 3.1.1.5, those issues were going to have to be ventilated at some stage, and with rule 46.04, they were going to have to be dealt with at some stage. We are bringing them, in this trial, nevertheless, at an early stage. The evidence of the plaintiff has not been completed. My friend still has leave from your Honour to proceed.
HIS HONOUR: No, that’s not correct. You made it quite clear that you would be seeking, if necessary, depending on the concerns that I expressed, leave to amend after the [first] plaintiff’s evidence-in-chief?
Mr ROCHOW: That’s fair. I do agree with that, yes.
HIS HONOUR: That was leaving it too late, and I cannot but help think that that was done deliberately.
MR ROCHOW: No, it wasn’t done deliberately. I did raise this with my instructor last week. I said perhaps we need to be more precise at 3.1.1.5. When we discussed it, I spoke with the view that it was there.
HIS HONOUR: I am not impressed. The more I hear about it, the more it seems to me that you should have come clean and frank about this proposal at the time when you gave Mr Stanley your list of authorities?
MR ROCHOW: I cannot run away from that criticism. I have to accept that criticism. Quite where that takes the question of amendment is another matter.”
(My emphasis.)
This belated application was opposed by Mr Stanley, counsel for the plaintiffs, who submitted that the proposed amendments raise, on the third day of trial, legal defences that have not previously been pleaded and are not insignificant. In his submission (T 189-190),
“It is too late, in my submission, on the third day of trial, to be raising statutory defences that are submitted to constitute a complete answer to the claim when the defence has already been amended once by leave of the court, and fundamentally fails to raise what are said to be complete answers by way of defence in reliance upon statutory provisions. In those circumstances I would submit that the plaintiff would be greatly prejudiced in the conduct of its defence [sic] of the action to have these matters raised at this juncture. I oppose the application.”
Mr Stanley said at (T 190) that he had not seen this application until the draft proposal was yesterday handed to the court. He also said (T 197) that he was not able to point to any specific potential prejudice to the plaintiffs which was not otherwise remediable.
It is difficult to comprehend how any meaningful negotiations for settlement could have proceeded when the plaintiffs’ legal representatives had not been informed of these proposed amendments. Be that as it may, the relevant legal principle was stated by Dawson, Gaudron and McHugh JJ in the High Court case of State of Queensland and Anor v JL Holdings Pty Ltd (1997) 189 CLR 146, at 155:
“Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion.”
I am satisfied that the reasons for the delay in making this application were those reasons enunciated by Mr Rochow from the bar table. In application of the relevant legal principle, in my view this application further to amend the defence should be granted, upon the following terms:
1.That further particulars be supplied of the sense in which it is to be pleaded, in para. 3.1.6.1 of the proposed amendment, that the parties were in pari delicto, and of the reason for which it is to be pleaded, in para.3.1.6.2 of the proposed amendment, that the said part performance was illegal.
2.That trial of the action be adjourned to a date to be fixed, to enable the plaintiffs to obtain further legal advice and, if necessary, further amend their pleadings.
3.That the defendant, the defendant’s solicitor and/or the defendant’s counsel pay the costs of the plaintiffs on an indemnity basis for all costs thrown away as a result of these amendments and the adjournment, which costs include the preparation for the trial of this action for 19 April 2004, the costs of the amendments and the costs of the adjournment itself. (A similar order was made by Lander J against solicitors in Interior Projects v Players Ltd and others in Supreme Court judgment No.S6199, reasons for decision published on 19 June 1997.)
4.That further consideration of the third term be adjourned to a date to be fixed.
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