Hudson Ventures Pty Ltd v Colliers International Consultancy and Valuation Pty Limited
[2014] FCA 1036
•17 July 2014
FEDERAL COURT OF AUSTRALIA
Hudson Ventures Pty Ltd v Colliers International Consultancy and Valuation Pty Limited [2014] FCA 1036
Citation: Hudson Ventures Pty Ltd v Colliers International Consultancy and Valuation Pty Limited [2014] FCA 1036 Parties: HUDSON VENTURES PTY LTD (ACN 089 512 065) v COLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 844 112); COLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 848 112), LONGITUDE ROZELLE BAY PTY LIMITED (FORMERLY SYDNEY SLIPWAYS PTY LIMITED (ACN 103 449 734), JACKAROO PROPERTY PTY LTD (ACN 121 696 875), DARREN MCMULLEN and HUDSON VENTURES PTY LTD (ACN 089 048 171) File numbers: NSD 358 of 2013 Judge: RARES J Date of judgment: 17 July 2014 Legislation: Corporations Act 2001 (Cth)
Federal Court of Australia Act 1976 (Cth)Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 applied
Expense Reduction Analysts Group Pty Ltd v Armstrong applied
Strategic Management and Marketing Pty Limited (2013) 250 CLR 303 appliedDate of hearing: 17 July 2014 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 19 Counsel for the Applicant/ Fourth Cross-Respondent: Mr E Cowpe Solicitor for the Applicant/ Fourth Cross-Respondent: William Roberts Lawyers Counsel for the Respondent: Mr A P Cheshire with Mr S Spadijer Solicitor for the Respondent: Colin Biggers & Paisley Counsel for the First, Second and Third Cross-Respondents: Ms J McDonald Solicitor for the First, Second and Third Cross-Respondents: Harris Freidman Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 358 of 2013
BETWEEN: HUDSON VENTURES PTY LTD (ACN 089 512 065)
ApplicantCOLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 848 112)
Cross-ClaimantAND: COLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 848 112)
RespondentLONGITUDE ROZELLE BAY PTY LIMITED (formerly SYDNEY SLIPWAYS PTY LIMITED) (ACN 103 449 734)
First Cross-RespondentJACKAROO PROPERTY PTY LIMITED (ACN 121 696 875)
Second Cross-RespondentDARREN McMULLEN
Third Cross-RespondentHUDSON VENTURES PTY LTD (ACN 089 048 171)
Fourth Cross-Respondent
JUDGE:
RARES J
DATE OF ORDER:
17 JULY 2014
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The subpoenas to each of the persons referred to in order 2 made by Perry J on 8 July 2014 be varied by deleting, in paragraph 1, “27 November 2013” and substituting “31 December 2011”, by deleting the words “and any related investment”, and, in paragraph 2, by deleting the words “or related to”.
2.The subpoenas be returnable before the registrar at 9:30 am on 18 July 2014.
3.The interlocutory application filed by the applicant otherwise be dismissed and the parties' costs in relation to it be their costs in the proceedings.
4.The interlocutory application filed today by the first, second and third cross respondents in support of the amendment be dismissed.
5.The first, second and third cross-respondents pay the respondent's costs of the interlocutory application filed today in support of the amendment.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 358 of 2013
BETWEEN: HUDSON VENTURES PTY LTD (ACN 089 512 065)
ApplicantCOLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 848 112)
Cross-ClaimantAND: COLLIERS INTERNATIONAL CONSULTANCY AND VALUATION PTY LIMITED (ACN 076 848 112)
RespondentLONGITUDE ROZELLE BAY PTY LIMITED (formerly SYDNEY SLIPWAYS PTY LIMITED) (ACN 103 449 734)
First Cross-RespondentJACKAROO PROPERTY PTY LIMITED (ACN 121 696 875)
Second Cross-RespondentDARREN McMULLEN
Third Cross-RespondentHUDSON VENTURES PTY LTD (ACN 089 048 171)
Fourth Cross-Respondent
JUDGE:
RARES J
DATE:
17 JULY 2014
PLACE:
SYDNEY
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)
This is an application to amend a defence to cross-claim. The original defence was filed nearly a year ago. The proceedings have been set down since late last year for trial commencing next Monday 21 July 2014.
On 28 June 2013, Colliers International Consultancy and Valuation Pty Limited filed its cross-claim against, among others, Longitude Rozelle Bay Pty Limited, which was formerly known as Sydney Slipways Pty Limited. Sydney Slipways was the trustee of the Sydney Slipways Unit Trust. The statement of cross-claim alleged that Sydney Slipways, acting as trustee and on behalf of an intending mortgagee, engaged Colliers for reward to prepare a valuation of the proposed development the subject of the substantive proceedings. Colliers alleged that its engagement included written terms and conditions that, among others, required its client to agree to indemnify and hold it harmless from and against losses and liabilities claimed, or expenses that it might suffer directly or indirectly, because of a breach of a condition in cl 12.1 prohibiting the client from disclosing its valuation without Collier’s written consent and to hold it harmless from claims arising from the valuation or Sydney Slipways’ use of any information provided as a part of the valuation. Colliers alleged that it did not give permission to Sydney Slipways in any capacity to publish the valuation that it ultimately carried out or any extracts from it or to use it to promote investment in the proposed development to potential investors who now form the group members in these representative proceedings under Pt IVA of the Federal Court of Australia Act 1976 (Cth).
The statement of cross claim went on to allege that by compiling, issuing, circulating and publishing the information memorandum in 2007 and a disputed update in mid-2008, Sydney Slipways in its own right and as trustee breached the written terms of Colliers’ engagement. Colliers claimed that if it were found liable to the applicant, Hudson Ventures Pty Limited, or any of the group members in the class action that Hudson Ventures had commenced, by reason of that finding, Colliers would have suffered loss and damage and was entitled to, among other things, indemnity or compensation in respect of its liability to those persons and costs pursuant to its terms and conditions of engagement.
Each of Sydney Slipways, Jackaroo Property Pty Limited and Darren McMullen, the directing mind of Hudson Ventures and one of its directors at relevant times, who are the first three cross respondents, filed their original defence to the statement of cross claim on 29 July 2013. That defence admitted that Sydney Slipways, as trustee, had engaged Colliers for reward to prepare the valuation of the proposed development and asserted that it had done so for the proposed first mortgagee and investors for equity purposes. The defence put other matters in the cross-claim in issue. However, there did not appear to be any substantive dispute about the terms of the contract under which Colliers acted. The three cross-respondents’ defence traversed Colliers’ allegations of breach of contract by Sydney Slipways by denying those allegations, as to Sydney Slipways, and the other two cross-respondents not pleading to those claims.
The proposed amendment
Today, I granted leave to Sydney Slipways to file in Court an application to amend its defence to the statement of cross-claim by adding a substantive plea that any claim against Sydney Slipways in contract was barred by operation of a deed of company arrangement entered into under Pt 5.3A of the Corporations Act 2001 (Cth).
The deed of company arrangement was entered into on 7 October 2011. It provided for the barring of all claims against Sydney Slipways once the conditions precedent to it had been satisfied. The proceedings brought by Hudson Ventures were not commenced until sometime after those conditions were satisfied. At no time, until this present application, has Hudson Ventures sought to rely upon the effect of the deed of company arrangement. The first notice of the proposal to rely on it was conveyed in a letter dated 3 July 2014 from the solicitors for the three cross respondents to the solicitors for Colliers.
Colliers opposed the grant of leave on the ground that, in all of the circumstances, including the proximity to the trial, it would not be in a position to analyse properly how to deal with the new amendment or the consequences of whether it should seek to make claims against former directors or officers of Sydney Slipways other than Mr McMullen so as to protect itself from the prejudice it might suffer were the plea in bar based on the deed of company arrangement upheld.
It is common ground that, at all times, Sydney Slipways knew of the status it had and rights that accrued to it under the deed of company arrangement. Counsel recently briefed for Sydney Slipways, following a failed mediation of the proceedings in May 2014, indicated that the genesis of the proposed amendment was her own involvement. Most importantly, no officer of Sydney Slipways has given any evidence identifying any reason why this point was not pleaded at any earlier time. Discovery has been given on the basis of the current pleadings.
Colliers indicated in argument that it is concerned that one of its pleaded allegations in its statement of cross claim involved Hudson Ventures and the other cross respondents inducing Sydney Slipways to breach the contract with it by disseminating the valuation or its contents without Colliers’ permission. At the time that the deed of company arrangement was entered into and its conditions precedent satisfied, there is no suggestion in the material before me that Colliers was aware that there was any claim against it, actually or potentially. Colliers indicated that, if the amendment were granted, it would wish to revisit the way in which it pleaded Sydney Slipways’ involvement in engaging it in the contract as simply being in its capacity as trustee for the Sydney Slipways Unit Trust.
Consideration
While that latter argument does not immediately suggest much prospect of bearing fruit, I am mindful that, as each of the parties to both proceedings urged earlier this morning, in opposing a requirement for third parties to answer subpoenas at this late stage, all parties are intensively engaged in preparation for the hearing that is to commence next Monday.
As is now an accepted feature of litigation in the superior courts of record of our nation, the courts have assumed a role in case management that they once denied themselves. One of the reasons for this is that problems of delay and cost in litigation and the impact on the speed and efficiency with which a court can deal with parties’ disputes are all affected by the manner in which proceedings are conducted. As French CJ, Kiefel, Bell, Gageler and Keane JJ said in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303 at 321[51]:
“Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants.”
Earlier, the High Court had held in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 that these considerations apply to applications to amend pleadings. Under Pt VB of the Federal Court of Australia Act, the overarching purpose of the civil practice procedure provisions picks up the concepts with which those two decisions dealt. Of course, the just determination of all proceedings before the Court forms an objective within the overarching purpose as s 37M(2)(a) provides.
This case has some similarities to the situation that arose in Aon 239 CLR 175, where there was no evidence given of any oversight by the party that sought to amend at a late stage where the amendment had been proposed shortly after a failed mediation: see 239 CLR at 216 [107]-[108]. Gummow, Hayne, Crennan, Kiefel and Bell JJ said (239 CLR at 216 [109], 217 [112]-[113]):
“109Whatever was the reason for the delay in applying for the amendment, none was provided. There was no mistake of judgment, such as that to which Bowen LJ referred, which might be weighed against the effects of the delay, effects which r 21 required to be taken seriously into account.
….
112A 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.
113In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy [Jolowicz, On Civil Procedure (2000) p 79]. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.” (bold non-italic emphasis added)
Earlier, their Honours had said that (239 CLR at 215 [103]):
“Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case.” (emphasis added)
The impact of the proposed amendment on the way in which this litigation might proceed cannot, in my view, be gainsaid. This is not a situation in which the amendment is brought forward at an early stage in the litigation. The parties have made forensic choices as to the issues that they wish to have resolved and are deeply involved in preparation for the final hearing. The effect of the amendment may be, if granted, to provide a complete answer to a cause of action that Colliers would otherwise have had and may have been able to establish by proof at trial.
I am particularly mindful that, at all times, Sydney Slipways has necessarily been well aware of its rights and status under the deed of company arrangement that it could plead in bar against all claims that were admissible. Yet, that is the very matter that it now seeks to raise two business days before the final hearing of these proceedings is to occur. There has been no explanation for its delay.
I am not satisfied that it would be in the interests of justice to require Colliers now to divert its time and energy, in the midst of preparing for a trial in which it is being sued for tens of millions of dollars in damages, to work out and deal with the consequences of any grant of the proposed amendment, including whether it would wish to join new parties or reformulate its own pleading to address this question. These are not decisions that should be taken in any litigation in undue haste and without proper reflection and consideration within the constraints provided by Pt VB and its analogues.
In my opinion, were I to grant the amendment that would be likely to lead to Colliers needing to have the proceedings adjourned so that new parties might be added to meet the consequences which, on proper reflection, it may wish to pursue if the amendment were allowed. I accept that the arguments that Colliers have foreshadowed may, if properly explored in the fullness of time, not come to much, but I am not satisfied that they are without substance and that they do not require some proper consideration in all the circumstances. The most telling fact is that this issue has not been raised until the very heel of the forensic hunt by the party for whose benefit it may have inured where that party, I infer, has at all times been well aware that it could and, I find, should, have taken this point at the outset if it were meritorious in its conduct of the proceedings.
For these reasons, I refuse to grant the amendment.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 24 September 2014
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