In the matter of JRJ Plumbing Supplies Pty Limited (in liquidation)
[2015] NSWSC 2026
•23 March 2015
Supreme Court
New South Wales
Medium Neutral Citation: In the matter of JRJ Plumbing Supplies Pty Limited (in liquidation) [2015] NSWSC 2026 Hearing dates: 23 March 2015 Date of orders: 23 March 2015 Decision date: 23 March 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Leave to amend points of defence and withdraw admissions granted.
Catchwords: PRACTICE AND PROCEDURE – defence – leave to amend points of defence – leave to withdraw admissions – whether reasonable argument contrary to the admissions available to defendant – prejudice occasioned by permitting amendment – delay – where admissions apparently made inadvertently. Category: Procedural and other rulings Parties: Robert John Manning (applicant/defendant)
Bruce Gleeson (first respondent/first plaintiff)
JRJ Plumbing Services Pty Ltd (in liquidation) (second respondent/second plaintiff)Representation: Counsel:
Solicitors:
J P Donohoe (applicant/defendant)
S Golledge (respondent/plaintiffs
Laurence & Laurence Commercial Lawyers (applicant/defendant)
Gillis Delaney Lawyers (respondents/plaintiffs)
File Number(s): 2013/348717
Judgment (ex tempore)
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HIS HONOUR: By interlocutory process filed on 16 March 2015, the defendant Robert John Manning seeks leave to file amended points of defence and to withdraw certain admissions made in the original points of defence.
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The substantive proceedings are a claim by the liquidator of JRJ Plumbing Supplies Pty Ltd (“Supplies”) against Mr Manning, a director of that company, for insolvent trading, debts said to have been incurred by the company to a supplier of plumbing equipment, Ostra. The liquidator's case is that the company acquired goods and materials from Ostra, and on-sold them to its related company, JRJ Plumbing Services Pty Ltd ("Services"). Until recently, this was not in dispute, although it seems to me, on a fair reading of the material, that little attention was given to it. As a result, a number of formal admissions were made to that effect, and in one affidavit of Mr Manning, he deposed that Supplies was the company that acquired plumbing and related building materials that were on-sold to Services (and subcontractors to Services) at a margin.
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The proceedings have an unfortunate procedural history. The current version of the points of claim is itself an amendment of an earlier version. The matter was set down for hearing late last year, but vacated following late service of evidence by the liquidator.
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That late-served evidence included a large quantity of relevant documentation. Mr Manning's daughter Raquel Manning was asked to analyse that documentation in order to enable Mr Manning to respond to the liquidator's evidence. In the course of her doing so, it became apparent that the orders to Ostra were ostensibly placed in the name of Services, not Supplies – although Ostra continued to invoice Supplies – and that that was the case from as early as 2006. It also appears that there were no receipts into or payments from Supplies' bank account of relevance, but that Ostra's invoices were paid from time to time by Services.
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It also appears that in late 2011, when the account was in arrears and there was a threat on the part of Ostra to cease supply, it was proposed that Mr Manning give a personal guarantee – which there is some suggestion he was prepared to do – and Ostra's Mr Robertson thereupon prepared a draft personal guarantee in the form of a letter agreement which identified Services, as distinct from Supplies, as the account holder.
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On any view, that material provides a respectable basis for an argument, and it seems to me a good arguable case, that the goods were sold and delivered to Services, as distinct from Supplies. There may be contrary evidence, but at least it would seem that there is a good argument to that effect.
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As I have said, until now, the case has proceeded on a relatively uncontroversial basis that Supplies was the contracting party. Accordingly, the evidence on neither side has really addressed the question of the identity of the contracting party, at least in a meaningful or intentional way. No doubt permitting the amendments sought and withdrawal of the admissions will require that the liquidator be permitted to adduce further evidence, and that will incur some prejudice in the nature of delay.
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More significantly, since Mr Bristow, who appears to have been the principal contact between Ostra and JRJ in obtaining orders on a weekly basis, is relatively recently deceased and instructions had not been obtained from him on this issue, the liquidator will not be able to obtain his evidence – nor for that matter, it might be said, will the defendant be able to obtain his evidence. But this is not an application for an extension of a limitation period, and while that prejudice is not irrelevant, it seems to me that it is not so great as to outweigh the injustice of not permitting the defendant to run what appears to be a good arguable, if belated, defence.
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As the matter has not been refixed for hearing, it is not as if another hearing date will be sacrificed as a result. In addition, the prejudice is somewhat mitigated by the circumstance that Mr Robertson – who, though not the person who dealt on a weekly basis with JRJ, is the person who apparently drafted the guarantee letter – remains available.
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All in all, I am satisfied that the justice of the case on balance requires that the amendment be permitted.
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I have not overlooked the principles relating to the withdrawal of an admission. One of them is that the Court needs to be satisfied that the admission is being withdrawn not for purely tactical reasons but because there is a good basis for doing so. Here, the evidence to which I have referred demonstrates that there is a good arguable case to the contrary of what has been admitted, and although it is true that the defendant has not deposed as to why the admissions were made, it seems to me in this case self-evident that they were made inadvertently or through lack of detailed knowledge of the circumstances, on which the documentary evidence now casts much better light.
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The Court orders that:
The defendant have leave to amend its points of defence by filing and serving an amended points of defence in the form of the first amended points of defence annexed to the affidavit of Frederick Laws sworn 16 March 2015.
For that purpose, the defendant have leave to withdraw the admissions in paragraphs 3(a), 3(b), 9(e), (viii) and 14(a) of the points of defence filed on 16 June 2014.
The defendant pay the plaintiff's costs of the interlocutory process, including the costs thrown away by the amendment.
The proceedings be listed in the Corporations Judge Directions List on 20 April 2015 at 10am.
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Decision last updated: 18 February 2016
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