Jabiru Satellite Limited v Societe Generale
[2025] VSC 580
•12 September 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2020 02631
| JABIRU SATELLITE LIMITED (IN LIQUIDATION) (ACN 121 667 365) & ANOR | Plaintiff |
| v | |
| SOCIETE GENERALE & ORS | Defendant |
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JUDGE: | Delany J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 1 August 2025 |
DATE OF RULING: | 12 September 2025 |
CASE MAY BE CITED AS: | Jabiru Satellite Limited v Societe Generale |
MEDIUM NEUTRAL CITATION: | [2025] VSC 580 |
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PRACTICE AND PROCEDURE – Pleadings – Leave to amend Statement of Claim – Proceeding commenced by generally indorsed writ – Whether proposed amendments otherwise statute barred are outside the perimeter or range of the indorsement – Whether leave should be given to amend to rely on statute barred causes of action – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 36.01(1), (6); Limitations of Actions Act 1958 (Vic) s 34 – Renowden v McMullin (1970) 123 CLR 584; Hepi v Toyota Finance Limited [2025] VSC 121, applied; Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; Commonwealth of Australia v Winston (2024) 116 NSWLR 111, referred to.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Crutchfield KC with Mr A Di Stefano | Quinn Emanuel Urquhart & Sullivan |
| For the First, Second, Third and Seventh Defendants | Mr S Rosewarne with Ms A Batrouney and Mr T Jeffrie | A&O Shearman |
| For the Eighth Defendant | Mr C Juebner KC with Ms G Douglas and Ms H Aprile | Dentons |
Contents
A.. Introduction
B... The issues at the hearing
C.. The Indorsement
D.. Finance Agreements
E... The allegations in the FASOC
F... The legislation, rules and principles
F.1The Civil Procedure Act 2010 (Vic)
F.2 The Rules
F.3Section 34 of the Limitation of Actions Act1958 (Vic)
F.4 The principles concerning amendment generally
F.5 Amendment in the context of time-barred claims
G.. Issues to be determined
G.1 The proposed claim based on breach of New York law
G.1.1 Submissions
G.1.2 Consideration
G.2 Claim for breach of directors’ duties
G.2.1 Submissions
G.2.2 Consideration
G.3 Claims regarding the Consult Obligation and the Societe Generale Additional Consult Obligation
G.3.1 Submissions
G.3.2 Consideration
G.4 Claim for breach of implied duties by refusing to approve supplier payments
G.4.1 Submissions
G.4.2 Consideration
H.. Disposition
HIS HONOUR:
A Introduction
This is a very old case. The proceeding was commenced on 18 June 2020 by writ and an Indorsement of Claim (‘Indorsement’). On 19 December 2024 I fixed the case for trial on 8 April 2026 on a preliminary estimate of 8–10 weeks.
The conduct of the proceeding on behalf the plaintiffs has been beset with funding issues and complexities associated with obtaining documents from France which, together, account for much of the delays.
The subject matter of the proceeding is materially older than the case itself. It concerns a dispute arising from funding arrangements entered into in 2013 for an unsuccessful project to build, launch and operate a commercial satellite (‘Project’).
This ruling concerns the plaintiffs’ application by summons dated 28 July 2025 pursuant to rr 36.01 and 36.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the ‘Rules’) and/or the inherent jurisdiction of the Court to further amend their pleading. Their current pleading is the further amended statement of claim dated 24 December 2024 (‘FASOC’).
Orders were made on 4 June 2025 providing for the plaintiffs to serve their proposed amended pleading, for the defendants to notify the plaintiffs whether they consent to or oppose the proposed amendments, and, if not resolved, for any dispute to be heard on 1 August 2025.
On 11 July 2025, the plaintiffs served their proposed amended pleading. The first, second, third and seventh defendants (collectively, ‘Lenders’) and the eighth defendant, La Compagnie Francaise D’assurance Pour Le Commerce Exterieur (‘COFACE’), subsequently wrote to the plaintiffs stating their objections to the proposed amendments. The Lenders opposed all of the proposed amendments. COFACE opposed certain proposed amendments.
At the hearing on 1 August 2025, the plaintiffs sought leave to amend the FASOC in the form of the proposed second further amended statement of claim (‘2FASOC’) exhibited to the affidavit of Robert James True dated 28 July 2025 (‘True July Affidavit’). The 2FASOC contains revisions from the proposed amended pleading served by the plaintiffs on 11 July 2025. In addition to the True July Affidavit, the plaintiffs relied on written submissions dated 28 July 2025. They also relied on a short written submission filed after the hearing dated 1 September 2025.
In opposition to the 2FASOC, the Lenders relied on the affidavit of Michael Timothy Shepherd dated 30 July 2025 and an expert report on issues of New York law dated 30 July 2025 prepared by the Honourable Richard J Holwell, a former judge of the United States District Court for the Southern District of New York (‘the Holwell Report’). The Lenders also relied on written submissions dated 30 July 2025 and 3 September 2025.
COFACE relied on submissions dated 30 July 2025 and on the affidavit of Ryan Nathan Hennessey dated 30 July 2025.
In their written submissions and at the hearing, the plaintiffs indicated they may seek leave to further amend the 2FASOC.
B The issues at the hearing
At the commencement of the hearing, eight issues remained in dispute concerning the 2FASOC. Four of those issues fell away, leaving four issues for determination.
These reasons predominantly concern the four issues remaining in dispute. However, the issues that fell away and how they were resolved during the hearing should be mentioned.
The first issue was whether the 2FASOC should incorporate the 13-page section titled ‘Overview of the plaintiffs’ claims in the proceeding’. The plaintiffs agreed to not press the inclusion of this section in the 2FASOC.
The second issue was whether the particulars in the 2FASOC are sufficient. The Lenders submitted the 2FASOC seeks to introduce various embarrassing allegations and particulars which are liable to be struck out and should not be permitted. A related issue identified by COFACE was whether the particulars sub-joined to paragraphs 12.1.A and 118.I.1 of the 2FASOC are sufficient to enable COFACE to understand the case it must meet at trial.
At the hearing the plaintiffs indicated they intend to seek leave to further amend the 2FASOC to deal with issues raised by the Lenders and by COFACE relating to particulars.
The fourth issue was whether, as submitted by COFACE, paragraphs 135, 135.B.3, 135.C–135.I and 136 of the 2FASOC relating to ‘Original Waiver 3’ result in the pleading being impermissibly internally inconsistent. Those paragraphs refer to the alleged refusal by COFACE to provide its consent to Original Waiver 3, an allegation which COFACE submitted lacks a proper basis having regard to contemporaneous documents. During the hearing the plaintiffs accepted the 2FASOC contains an inconsistency with respect to Original Waiver 3. They agreed to respond to COFACE’s criticisms of this aspect of the pleading when seeking leave to further amend the 2FASOC.
The four issues that remain concern whether the proposed amendments should be allowed so as to include:
(a)new claims under New York law (paragraphs 127, 127.A and 129.A);
(b)new claims for alleged breaches of director duties by shadow de facto directors (paragraphs 130 and 142–150);
(c)new claims for alleged breaches by:
(i)the Lenders of an obligation under the Finance Agreements to consult COFACE (‘Consult Obligation’); and
(ii)the first defendant (‘Societe Generale’) of an obligation under the Finance Agreements to consult COFACE (‘Societe Generale Additional Consult Obligation’),
in advance of the exercise of certain rights under the Finance Agreements (paragraphs 20.A–20.F, 118.H, 129.A.8, 130 and 138–141); and
(d)a new alleged breach of duty by refusing to approve supplier payments based on English law and New York law (paragraph 129.A.7).
All parties accept that unless the contested amendments fall within the scope of the Indorsement, they are statute-barred.
In addition to the Indorsement, existing and superseded pleadings that are relevant to the determination of the disputed issues include:
(a)the statement of claim filed on 4 February 2022 (‘SOC’);
(b)the amended SOC filed on 20 May 2022 (‘ASOC’);
(c)the FASOC filed on 24 December 2024;
(d)the Lenders’ amended defence filed on 17 January 2025 (‘Lenders’ Defence’);
(e)COFACE’s amended defence filed on 17 January 2025 (‘COFACE’s Defence’); and
(f)the plaintiffs’ reply to:
(i)the Lenders’ Defence filed on 20 February 2025 (‘Reply to the Lenders’ Defence); and
(ii)COFACE’s Defence filed on 20 February 2025 (‘Reply to the COFACE’s Defence’),
(together, ‘Replies’).
C The Indorsement
The Indorsement is central to the issues to be determined. It is relatively short. It is convenient to reproduce the Indorsement in its entirety:
1. From about 2010 to March 2015, the first plaintiff (Jabiru) and the second plaintiff (NewSat) undertook a project to finance, construct, launch and own a telecommunications satellite (the Jabiru Project).
2. In the course of pursuing the Jabiru Project, the Plaintiffs entered into the following agreements:
(a) an agreement with Lockheed Martin Corporation Inc (Lockheed) dated 8 December 2011 for the construction of a satellite, which was amended and restated on 25 May 2012, and further amended thereafter on multiple occasions;
(b) an agreement with Arianespace S.A. (Arianespace) dated 2 March 2012 for the launch of the satellite (Arianespace Agreement);
(c) various finance agreements (Finance Agreements), which included:
(i) a Common Terms Agreement dated 4 July 2013 with the first defendant, Société Générale, the second defendant, Standard Chartered Bank, the third defendant, Credit Suisse (Luxembourg) S.A., the fourth defendant, Deutsche Bank Trust Company Americas, the fifth defendant, Citibank, N.A., the sixth defendant, Citicorp International Limited (Citicorp) and the seventh defendant, Export-Import Bank of the United States (Ex‑Im) (collectively the Financiers) (Common Terms Agreement);
(ii) an export financing credit facility dated 4 July 2013 with Citibank, N.A. (as the Ex-Im facility agent) and Ex‑Im (Ex‑Im Agreement);
(iii) a security trust deed dated 4 July 2013 with Société Générale, Standard Chartered Bank, Credit Suisse (Luxembourg) S.A., Ex-Im, Deutsche Bank Trust Company Americas, Citibank, N.A. and Citicorp (Security Trust Deed);
(iv) COFACE Facility Agreement dated 4 July 2013 with Société Générale, Standard Chartered Bank and Credit Suisse (Luxembourg) S.A.
3. In about February 2014:
(a) financial close under the Finance Agreements was achieved;
(b)the Finance Agreements were executed in amended and restated form; and
(c)drawdowns on the Finance Agreements occurred.
4. In pursuing the Jabiru Project, from 2012 to 2015 (inclusive):
(a) extensive due diligence was undertaken by and on behalf of the Financiers to validate the Jabiru Project’s business case as a result of which the Financiers considered that the Jabiru Project’s capital structure was conservative and the projected ratios were acceptable;
(b) a comprehensive Agreed Financial Model was developed in conjunction with and accepted by the Financiers which recorded the risk parameters of the Jabiru Project which included the possibility of cost-overruns, delay and the use of a contingency;
(c) the Financiers retained technical, sector and project advisers who regularly reported on the Jabiru Project’s progress and recommended it be funded to completion;
(d) the defendants knew and understood that the plaintiffs capacity to raise further equity capital prior to completion of the Jabiru Project might be constrained or limited and that unless the Jabiru Project was completed the plaintiffs would be unable to repay their debts;
(e) approximately $207m was paid to Lockheed;
(f) approximately $56m was paid to Arianespace;
(g) various other amounts were paid to entities as directed by Ex‑Im (and/or one or more of the Financiers), including Allen & Overy, Space Partnership International, West End Advisory Associates, LLC, Euroconsult, S.A, Futron Corporation, PKF (UK), LLP (later, BDO, LLP), Benatar & Co Limited, and Fieldstone Private Capital Group;
(h) the eighth defendant (COFACE) provided a promise of guarantee in relation to the Arianespace Agreement.
5. On about 12 February 2014, the Plaintiffs signed a Waiver Request with Deutsche Bank Trust Company Americas (as Intercreditor Agent) under the Common Terms Agreement pursuant to which a request was made and the request accepted concerning a waiver of certain conditions precedent and other provisions of the Common Terms Agreement.
6. On about 3 April 2014, the Plaintiffs signed a Waiver Request to Deutsche Bank Trust Company Americas, as Intercreditor Agent and Citibank N.A as Ex-Im Bank Facility Agent under the Common Terms Agreement for a waiver of certain conditions precedent and other provisions of the Common Terms Agreement.
7. On about 21 August 2014, Jabiru and NewSat signed a Waiver Request to Deutsche Bank Trust Company Americas, as Intercreditor Agent under the Common Terms Agreement (Waiver 3) for a waiver of certain conditions precedent and other provisions of the Common Terms Agreement.
8. Waiver 3 contained funding conditions that were in substance imposed by the defendants, were not necessary for the successful completion of the Jabiru Project or to protect the legitimate interests of the defendants or preserve the risk allocation inherent in the Finance Agreements, were contrary to the commercial purpose and terms of the Finance Agreements, fatally imperiled the Jabiru Project, and were of a nature and imposed in circumstances whereby the defendants knew or ought to have known the plaintiffs were unlikely to be able to satisfy in the timeframe stipulated.
9. Despite Waiver 3 containing onerous conditions that the Plaintiffs could not achieve in the context of the circumstances surrounding the Jabiru Project, the defendants required the Plaintiffs to execute Waiver 3, which had the effect that the Jabiru Project could not be completed (and the Plaintiffs’ obligations under the Lockheed Agreement and the Arianespace Agreement could not be met) for so long as the defendants insisted upon strict compliance of Waiver 3 before permitting further funding of the Jabiru Project to resume.
10. From the time of Waiver 3 to about March 2015, NewSat proposed capital raising measures which would have funded the Jabiru Project to completion but the defendants, despite advice from their own advisers to the contrary, insisted on strict compliance of Waiver 3 before permitting further funding of the Jabiru Project to resume, and refused and/or failed to agree to a further waiver or amendment to Waiver 3 that would allow further funding of the Jabiru Project to resume and be completed.
11. In March 2015, the defendants without explanation withdrew financial support for the Jabiru Project.
12. The conduct of the defendants in paragraphs [7] to [11] above had the result that the Plaintiffs were unable to comply with their obligations under the Lockheed Agreement, the Arianespace Agreement, and the Finance Agreements, which caused the Plaintiffs to default under those agreements. In turn, this caused the Jabiru Project to fail, led to defaults under the Finance Agreements, the forfeiture of all moneys paid in pursuit of the Jabiru Project, and prevented the Plaintiffs from complying with their obligations under the respective agreements and completing a profit-generating satellite.
13. The Common Terms Agreement contained an implied obligation of good faith and reasonableness, which applied, inter alia, to any decision of a relevant Financier to:
(a) waive a condition precedent to any Credit Event (under clause 3.2),
(b) make a judgment as to whether a condition precedent has been satisfied (under clause
(c) make decisions with respect to an exercise of contractual discretion under cl.13.1 consistent with the commercial purpose inherent in the financing (including by reference to the contractual Agreed Financial Model and the Recitals in A and B of the Common Terms Agreement), namely to complete the Jabiru Project using the financing according to the risks recorded in the Agreed Financial Model;
(d) waive, supplement or amend the Agreement (under clause 36); and
(e) designate a document as a “Finance Document” (under clause 1.1).
14. By reason of the conduct in paragraphs [7] to [12] above, the Financiers breached the Common Terms Agreement because finance was withdrawn after insisting on a re-capitalisation which was (a) not required to preserve the Financiers’ risk allocation as to time or amount and (b) was an irrational exercise of a contractual power in the circumstances. The breach of the Common Terms Agreement caused the Plaintiffs loss and damage as per paragraph 12 above.
15. Further, to the extent that any decision or conduct by COFACE to withhold or refuse the continuing provision of a promise of guarantee caused the Financiers’ breach as per paragraph 14 above, COFACE had knowledge of the Finance Agreements, knew and intended that its decision or conduct would cause the Financiers to breach their obligations or would interfere with, hinder or prevent the performance of the Financiers’ obligations, and by their actions directly caused the Financiers to so act. In the premises, COFACE is liable for the loss and damage caused to the Plaintiffs by its decision or conduct.
16. Further, the Australian Consumer Law, including by reference to ss 5 and 6 of the Competition and Consumer Act 2010 (Cth) and ss 5 and 12 of the Australian Consumer Law and Fair Trading Act 2012 (Vic), applies to the above conduct of the defendants.
17. By reason of the above conduct of the defendants in all of the circumstances, the defendants engaged in unconscionable conduct in contravention of s 21 of the Australian Consumer Law.
18. The defendants’ contravention of the Australian Consumer Law caused the Plaintiffs loss and damage.
In these reasons, unless otherwise defined, I adopt the terms as defined in the Indorsement.
D Finance Agreements
After the hearing I was provided with copies of the Common Terms Agreement, the COFACE Facility Agreement and the Ex‑Im Agreement referred to in the Indorsement.
Clause 1.2(c) of the Common Terms Agreement provides:
Unless a contrary indication appears, a term used in any other Finance Document … has the same meaning in that Finance Document … as in this Agreement.
Clause 33 of the Common Terms Agreement provides:
This Agreement and any non‑contractual obligations arising out of or in connection with it are governed by English law.
Clause 1.01 of the Ex-Im Agreement is in the following terms:
Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have their respective meanings as set forth in Clause 1.1 (Definitions) of the Common Terms Agreement; provided that, to the extent any such term is defined in such Clause 1.1 by reference to another agreement or document, such term shall continue to have its original definition despite any termination, expiration or amendment of such agreement or document, unless Ex‑Im Bank agrees otherwise in writing. In addition, for purposes of this Agreement, unless otherwise defined herein, the following terms shall have the meanings specified below …
Clause 11.01 of the Ex-Im Agreement is in the following terms:
Governing Law. THIS AGREEMENT, THE RELATIONSHIP BETWEEN THE BORROWER AND THE PARTIES HERETO AND ANY CLAIM OR DISPUTE (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, U.S.A.
E The allegations in the FASOC
The FASOC begins by pleading steps taken by the plaintiffs in pursuit of the Project, including a board resolution of the second plaintiff, NewSat Limited (‘NewSat’), in about March 2009 and other factual matters.
Paragraph 19 includes allegations that on or about 4 July 2013 the first plaintiff, Jabiru Satellite Limited (‘Jabiru’), as borrower and NewSat as guarantor entered into:
(a)the COFACE Facility Agreement concerning a term loan facility for the benefit of Jabiru in the maximum aggregate amount of US$89.6 million;
(b)the Ex-Im Agreement concerning an export financing credit facility for the benefit of Jabiru in the aggregate principal amount of US$300,499,000;
(c)the reserve facility agreement concerning a term loan facility for the benefit of Jabiru in the amount of US$25 million;
(d)the Common Terms Agreement which, inter alia, governed the making of credit requests and events of default; and
(e)the Security Trust Deed pursuant to which the secured parties (as defined in the Common Terms Agreement) appointed a security trustee,
(together, ‘Finance Agreements’).
Paragraph 20 of the FASOC pleads, as did the SOC, that ‘the Finance Agreements … are governed by English law with the exception of the Ex-Im Credit Agreement which is governed by New York law’.
The FASOC pleads Original Waiver 3, a series of events, documents and communications from around 23 April 2014 until 27 June 2014, as well as ‘Waiver 3’, the same Waiver 3 referred to in paragraph 7 of the Indorsement. Allegations are made of the imposition of new Waiver 3 obligations between the time of Original Waiver 3 and Waiver 3 on 21 August 2014.
The section of the FASOC titled ‘[t]he plaintiffs’ compliance with Waiver 3’ pleads a series of events, generally on a monthly basis, commencing in September 2014 and continuing through until April 2015 directed to that topic.
The section of the FASOC titled ‘Waiver 4’ begins with paragraph 118.A which pleads that in about February 2015, the plaintiffs and the Lenders began negotiations for a further waiver agreement, the terms of which would have resulted in the resumption of funding by the Lenders (‘Waiver 4’). Events that occurred relating to Waiver 4 are pleaded chronologically through to late March 2015. The plaintiffs allege that by each of December 2014 and March 2015, the Lenders had resolved to impose further conditions to be met before debt funding would resume which were not contained in Waiver 3.
Under the heading ‘The Lenders’ breaches of implied terms of the Finance Agreements’, paragraph 126 pleads that the Lenders possessed a number of powers and discretions in relation to the Project and the Finance Agreements, including Waiver 3.
Paragraph 127 of the FASOC, a paragraph which is critical in relation to the disputed amendments concerning New York law, alleges that, in exercising those powers and discretions:
… as a matter of the governing English law, the Lenders were subject to an implied obligation under the Finance Agreements to take into account all relevant factors and to disregard all irrelevant factors, and to exercise those powers and discretions not arbitrarily or capriciously, but rather rationally and in good faith, and consistent with the contractual purpose of the Finance Agreements.
(emphasis added)
Paragraph 127.A of the FASOC alleges that, further or in the alternative, the parties to the Finance Agreements were under implied obligations, including of good faith and cooperation, ‘as a matter of the governing English law, under the Finance Agreements’.
So far as the allegations in paragraphs 127 and 127.A of the FASOC encompass the Ex-Im Agreement, being one of the Finance Agreements, the allegations that that agreement is governed by English law is inconsistent with the plea in paragraph 20 (and also clause 11.01 of the Ex-Im Agreement reproduced at paragraph 26 above).
The Lenders deny the allegations in paragraph 127 in the Lenders’ Defence. They go on to refer various propositions in response to paragraph 127 by reference to English law.
The Lenders also deny paragraph 127.A and say that:
the plaintiffs have failed to plead any basis for the implication of any such term as a matter of English law (both in respect of the Finance Agreements which are governed by English law and those Finance agreements listed… above which are not governed by English law).
(emphasis added)
COFACE denies paragraphs 127 and 127.A in COFACE’s Defence with no elaboration.
Other than the Reply to the Lenders’ Defence, which refers back to paragraphs 127 and 127.A the FASOC, the Replies do not engage with the defendants’ pleas in response to paragraphs 127 and 127.A of the FASOC.
Paragraph 127.B of the FASOC pleads a series of additional implied obligations, said to be included in, or in addition to, the implied obligations earlier alleged.
The Lenders deny the allegations in paragraph 127.B and refer back to their responses to paragraphs 127 and 127.A. COFACE denies paragraph 127.B with no elaboration.
The FASOC alleges in paragraph 129.A that, as a matter of the governing English law, the Lenders breached the implied obligations set out in paragraphs 127, 127.A. and 127.B of the FASOC. Various acts and events relied on by the plaintiffs in support of breach are pleaded at paragraphs 129.A.1–129.A.6. Both the Lenders and COFACE deny those allegations in the corresponding paragraphs of their defences.
The FASOC goes on to allege that by reason of breaches of the implied obligations, the plaintiffs have sustained loss and damage, including the failure of the Project.
Beginning at paragraph 132 of the FASOC, under the heading ‘Unconscionable Conduct – Lenders’, a plea of unconscionable conduct is made against the Lenders. Failure on the part of the Lenders to act in good faith towards Jabiru is alleged.
The FASOC alleges that such conduct was unconscionable in contravention of s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’) and/or s 21 of the Australian Consumer Law (Cth) contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) and/or the Australian Consumer Law (Victoria) (‘ACL’).
Similar allegations of unconscionable conduct in contravention of s 12CB of the ASIC Act and/or s 21 of the ACL are made against COFACE in the section of the pleading titled ‘Unconscionable Conduct – COFACE’ beginning at paragraph 135 of the FASOC.
In broad terms the Lenders and COFACE deny the unconscionable conduct allegations.
F The legislation, rules and principles
F.1 The Civil Procedure Act 2010 (Vic)
Section 7(1) of the Civil Procedure Act 2010 (Vic) (‘the CPA’) provides:
Overarching purpose
(1)The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute.
Section 8(1) of the CPA relevantly provides:
Court to give effect to overarching purpose
(1) A court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether those powers—
(a) in the case of the Supreme Court, are part of the Court’s inherent jurisdiction, implied jurisdiction or statutory jurisdiction; or
…
(c) arise from or are derived from the common law or any procedural rules or practices of the court.
Sections 9(1)(c), (e) and (f) of the CPA provide:
Court’s powers to further the overarching purpose
(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects—
…
(c) the efficient conduct of the business of the court;
…
(e)minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i)the fair and just determination of the real issues in dispute; and
(ii)the preparation of the case for trial;
(f)the timely determination of the civil proceeding;
Relevant to the determination of this dispute is the overarching obligation in s 25 of the CPA:
Overarching obligation to minimise delay
For the purpose of ensuring the prompt conduct of a civil proceeding, a person to whom the overarching obligations apply must use reasonable endeavours in connection with the civil proceeding to—
(a)act promptly; and
(b)minimise delay.
F.2 The Rules
Rule 36.01 of the Rules relevantly provides:
(1) For the purpose of—
(a)determining the real question in controversy between the parties to any proceeding; or
(b)correcting any defect or error in any proceeding;
…
the Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.
(2) In this Order document includes—
(a)originating process;
(b)an indorsement of claim on originating process; and
(c) a pleading.
(3)An indorsement of claim or pleading may be amended under paragraph (1) notwithstanding that the effect is to add or substitute a cause of action arising after the commencement of the proceeding.
…
(6) Notwithstanding the expiry of any relevant limitation period after the day a proceeding is commenced, the Court may make an order under paragraph (1) where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of that party’s claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.
F.3 Section 34 of the Limitation of Actions Act1958 (Vic)
Section 34(1) of the Limitation of Actions Act 1958 (Vic) (‘Limitations Act’) and the heading to that section is in the following terms:
34 Abrogation of rule in Weldon v. Neal (1887) 19 Q.B.D. 394
(1)If a court would, but for the expiry of any relevant period of limitation after the day a proceeding in the court has commenced, allow a party to amend a document in the proceeding, the court must allow the amendment to be made if it is satisfied that no other party to the proceeding would by reason of the amendment be prejudiced in the conduct of that party's claim or defence in a way that could not be met by an adjournment, an award of costs or otherwise.
F.4 The principles concerning amendment generally
The general principles concerning an application to amend pleadings are well‑established.
In Northern Health v Kuipers,[1] the Victorian Court of Appeal identified the following factors as relevant to an application to amend a pleading (in light of the principles in Aon Risk Services Australia Ltd v Australian National University[2]):
(a)whether there will be a substantial delay caused by the amendment;
(b)the extent of any wasted costs;
(c)whether there is an irreparable element of unfair prejudice caused by the amendment;
(d)concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e)whether the grant of the amendment will lessen public confidence in the judicial system; and
(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.[3]
[1][2015] VSCA 172 (‘Kuipers’).
[2](2009) 239 CLR 175 (‘Aon’).
[3]Northern Health v Kuipers [2015] VSCA 172, [28].
During the hearing the Lenders referred to Janssen v OnePath Custodians Pty Ltd (‘Janssen’),[4] where Button J refused leave to amend a proposed further amended statement of claim in circumstances where permitting the amendments would require the trial date, set nearly one year earlier, to be vacated. In Janssen, Button J cited well established principles explained by Wigney J, with whom Anastassiou and Jackson JJ agreed, in KTC v David:[5]
[110]The Court’s power to grant leave to amend is broad and has the remedial objective of ensuring that any defect in the pleadings is cured and that the real questions in the controversy are properly agitated: Caason Investments Pty Ltd v Cao (2015) 236 FCR 322; [2015] FCAFC 94 at [20] (Gilmour and Foster JJ); Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [14]. The power must be exercised in a “way that best promotes the Court’s overarching purpose to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible”: Caason at [19] and the cases cited therein; s 37M(3) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The object of the Court is “not to punish parties for mistakes made in the conduct of their case, but to correct errors with the result that a decision can be made on the real matters in controversy”: Clough & Rogers v Frog (1974) 4 ALR 615 at 618 quoting Cropper v Smith (1884) 26 Ch D 700 at 710; Caason at [20].
[111]Leave to amend should generally be granted unless the proposed amendment is futile, including, for example, because the issue sought to be raised by the amendment has no reasonable prospects of success, or would be liable to be struck out as not raising a reasonable cause of action, or where the amendment would cause substantial prejudice or injustice to the opposing party in a way that cannot be compensated by the award of costs: Research in Motion Ltd v Samsung Electronics Australia Pty Limited (2009) 176 FCR 66; [2009] FCA 320 at [21]–[22]; Medich v Bentley-Smythe Pty Ltd [2010] FCA 494 at [8]; Caason at [21].[6]
[4][2024] FCA 497.
[5][2022] FCAFC 60.
[6]KTC v David [2022] FCAFC 60 [110]–[111]; cited in Janssen v OnePath Custodians Pty Ltd [2024] FCA 497, [22].
Consistent with the approach discussed by the Full Court of the Federal Court in KTC v David, the Court of Appeal in Kuipers held that, when dealing with an amendment application, it is necessary to have regard to the provisions of the CPA including, but not limited to, the overarching purpose in s 7 and the objects in s 9.[7] The Court of Appeal held that the Court must engage with the provisions of the CPA ‘in balancing the competing interests of the parties and those of the administration of justice more generally’.[8]
[7]Northern Health v Kuipers [2015] VSCA 172, [23]–[25].
[8]Northern Health v Kuipers [2015] VSCA 172, [22].
F.5 Amendment in the context of time-barred claims
Recently, in Hepi v Toyota Finance Australia Ltd (‘Hepi’),[9] Osborne J gave detailed consideration to the authorities and applicable principles where a party seeks to amend a pleading to add statute barred claims where, as here, the original proceeding was commenced by a generally indorsed writ. The authorities considered by his Honour include the decision of the Court of Appeal in Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (‘Agtrack’)[10] and the recent decision of the NSW Court of Appeal in Commonwealth of Australia v Winston.[11]
[9][2025] VSC 121 (‘Hepi’).
[10](2003) 7 VR 63; [2003] VSCA 6 (‘Agtrack’).
[11](2024) 116 NSWLR 111; [2024] NSWCA 277 (‘Winston’).
In Agtrack, the plaintiff sought damages for negligence and breach of contract in respect of her husband’s death in a plane crash in the Northern Territory. Commonwealth legislation created a scheme of no-fault liability damages for losses resulting from injury or death caused by interstate or intra-territory commercial flights. The legislation provided that the statutory right to damages was extinguished if the action was not brought within two years of the date when the aircraft arrived or ought to have arrived at its destination.
The crash occurred in August 1997. The proceeding was commenced in January 1999. No claim was made by the plaintiff in reliance on the no-fault liability provision under the Commonwealth legislation. After the two-year limitation period expired, the defendant asserted that the claim was unsustainable by reason of the limitation period. The plaintiff sought leave to amend her claim to advance a claim based on statutory liability, contending that if leave was granted her claim would relate back to the date of commencement of the proceeding. In those circumstances the statutory liability claim would not be statute barred. The primary judge allowed the amendment.[12] The Court of Appeal dismissed an appeal against the grant of leave.[13] Ormiston JA (with whom Chernov JA and O’Bryan JJA agreed) delivered the leading judgement.
[12]Hatfield v Agtrack (NT) Pty Ltd (2001) 183 ALR 674; [2001] VSC 182, [139].
[13]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [84].
Ormiston JA noted the proposition that an amendment, once effected, relates back to the date of issue or filing process is well accepted.[14] His Honour regarded the so-called ‘relation back’ of an amendment as not a matter of high principle, but one of practice, ’for it is merely the common sense characterisation of what is in fact sought and done’.[15] Put another way, it involves altering an existing document which will have come into existence at some time in the past.[16]
[14]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [39]. See also Commonwealth of Australia v Winston (2024) 116 NSWLR 111; [2024] NSWCA 277, [57].
[15]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [40]–[41].
[16]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [39].
Ormiston JA observed the substance of the ‘rule’ in Weldon v Neal, since abrogated by s 34 of the Limitations Act, was that no amendment should be permitted if the effect would be to allow a plaintiff to rely on a cause of action which was statute barred at the time of the application.[17] His Honour gave careful consideration to how applications for leave to amend to introduce a time barred cause of action should be approached having regard to both s 34 of the Limitations Act and r 36.01(6) of the Rules.
[17]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6 [27], [46].
Ormiston JA concluded the ‘relation back’ nature of an amendment does not apply if the amendment is sufficiently extensive so as to change the character of the original document. In such a case, the result of any amendment is a new and substituted document, not merely an amendment of an existing document.[18]
[18]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [40]; see also Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [128].
In Agtrack the Court of Appeal determined the amendment should be allowed in the exercise of the Court’s discretion notwithstanding the limitation period had expired.[19] That was so because there was ‘a close connection between the claim which ha[d] already been instituted by the filing of the writ with the indorsement of claim and the claim which the respondent wishe[d] to add by way of amendment’.[20]
[19]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [83] (Ormiston JA), [85] (Chernov JA) and [87] (O’Bryan JJA);
[20]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [52].
Neither s 34 of the Limitations Act nor r 36.01 of the Rules include within their text a requirement that the new time barred claims arise out of the same or substantially the same facts. Such a requirement is present in some other jurisdictions, including New South Wales and Queensland. In Agtrack, despite the absence of limiting language, Ormiston JA said of r 36.01:[21]
In essence, for the discretion to be exercised favourably towards her under the rules, the new claim must arise out of the same facts or substantially the same facts as support the claims already pleaded. In truth, there will then be a mere amendment of an existing claim, albeit in the present case it involves a characterisation of the claim in a different way and in the form of a different cause of action, so long as it is a mere recategorisation (or change of legal theory) of the claim or a restatement in different legal terms of the alleged outcome of the essential pleaded facts.
[21]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [52].
Concerning the new cause of action added by the amendment Ormiston JA said:[22]
Technically the correct cause of action was not identified but I would hold that the identification and characterisation of the correct cause of action should be treated as a matter of mere form, capable of ready amendment, so enabling the plaintiff to prosecute a claim which must be known by the defendant to be the only claim capable of being pursued under Pt IV of the Act from the outset of proceedings.
[22]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [80].
As noted by M Osborne J in Hepi, Ormiston JA did not accept (albeit by way of obiter) that r 36.01(6) of the Rules and s 34 of the Limitations Act gave a court carte blanche to permit amendments providing for the addition ‘years later of stale claims bearing little connection to the original claim’.[23] Ormiston JA considered the position was different where the amendment sought to:[24]
add or vary a few minor details and to give the existing claim a new characterisation, closely akin and by no means remote from the subject matter of the original claim. That is a true amendment and the kind of which the court ought be free to give effect to.
[23]Hepi v Toyota Finance Australia Ltd [2025] VSC 121 [92] (citing Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [52]).
[24]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [83].
In Hepi, the plaintiff argued that so far as Ormiston JA said the new claim must arise out of the same facts or substantially the same facts as support the claims already pleaded, such a constraint finds no textual support from r 36.01(6) or s 34.[25]
[25]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [93].
As M Osborne J observed in Hepi, if the plaintiffs’ analysis is correct, the approach to be taken in Victoria in applying r 36.01(6) and s 34 is significantly different to that required by statute or by the rules of the Federal Court and in some other Australian states.[26]
[26]Hepiv Toyota Finance Australia Ltd [2025] VSC 121, [94].
Hepi involved an application to amend the statement of claim in a group proceeding. The application to amend was accompanied by an application to join an additional defendant and an application to amend the group member definition.
In Hepi, M Osborne J noted the following concerning an amendment application made in a proceeding commenced by generally indorsed writ:[27]
140Where a proceeding is commenced by writ with a general indorsement, the statement of claim so served cannot expand beyond the area marked out by the indorsement. Whilst a plaintiff may widen the statement of claim or lessen it or express it in better terms, its substance must be consistent with that set out in the writ. A plaintiff cannot in the statement of claim change the whole character of the proceeding by introducing an entirely new and original cause of action…
141… Strictures apply where a writ is filed with a general indorsement and a later statement of claim is served r 36.01(6) and s 34 of the Limitations Act should be construed in a manner which, where possible, is coherent with the Rules as a whole.
(citations omitted.)
[27]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [140]–[141].
Following a detailed examination of the rule in Weldon v Neal and the means by which jurisdictions, most relevantly Victoria, had sought to address that problem[28] M Osborne J concluded:[29]
142… The loss of limitation defences reflect the loss of a substantive right. Limitation periods reflect a fundamental and all but universal policy that the litigation of stale claims constitutes potentially significant injustice. In Brisbane South Regional Health Authority v Taylor, McHugh J observed that a limitation period ‘represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated’.
143Against the background, I do not accept that the amendments introduced by the 1986 Rules pursuant to r 36.01(6) (and now present in the Rules), coupled with the contemporaneous and apparently related introduction of s 34 of the Limitations Act, was intended to deprive a defendant of such a fundamental right; especially in the absence of any clear indication to that effect in any contemporaneous indicia. Additionally, it is unlikely that such a significant change would be made by amendment to the rules of court alone in such a way which would set Victoria on a course distinct from other States and from the United Kingdom. The interest of justice are not to be looked at only from the perspective of the plaintiff and the group members. Consideration must be given to the position of all parties.
144Nor does s 34 of the Limitations Act compel any such conclusion. The task of statutory construction must begin with the consideration of the text itself, but the meaning of the text may require consideration of its context and the mischief it is seeking to remedy. Further, it is a well‑recognised rule of statutory interpretation that an Act will not be interpreted as taking away an existing right unless it is reasonably capable of no other construction. Equally well-recognised is the presumption that a court will not interpret legislation in a way which confines or limits the court’s jurisdiction unless found in clear words. Even if one focusses solely on the text of s 34, I do not accept that the text casts aside or in some way bars consideration of the loss of a limitation defence. The text first requires a court to consider whether it would allow a party to amend a document in the proceeding but for the expiry of any relevant period of limitation. Those introductory words suggest that the initial focus is on whether a court would exercise the permissive power to grant leave to amend under r 36.01. In the context in which the section was enacted, which was to abrogate the rule in Weldon v Neal (as the sub-heading in the section suggests), the first stage of the enquiry therefore is whether the Court ought exercise its discretion to grant leave to amend but for a technical expiry of the limitation period. This was the Weldon v Neal vice. By couching the rule with respect to amendment in such general terms, I accept, as Glass JA did in McGee v Yeomans in relation to a similar rule, that the effect of the new r 36.01 in the 1986 Rules was to displace the rule of practice laid down in Weldon v Neal (and all its finespun distinctions) as it had come to be applied and replace it with a general discretion to allow an amendment notwithstanding that it raised a barred cause of action whenever justice so required.
145But that broad criterion does not by a side wind, give rise to a widespread abrogation of the right to rely on limitation statutes in all cases of amendment. The abrogation of the rule in Weldon v Neal does not require it and nor does the language of s 34(1) compel it. It is one thing to put to one side the subtle distinctions that bedevilled courts following Weldon v Neal. It is another thing entirely to effect a carte blanche removal of a substantive right in respect of the introduction of a new cause of action which could not have been introduced in a statement of claim filed after commencement by writ with general indorsement but which a defendant was powerless to resist. Noting too that whilst some limitation provisions may be found in State legislation, others such as some of those relied on by Toyota in this proceeding, are found in Commonwealth legislation. Some bar the remedy and have to be pleaded in a defence; others have the effect that the cause of action no longer lies or is extinguished unless a proceeding is commenced within a designated time. … To interpret s 34(1) in a way which either removes a defendant’s substantive right without regard to context, the balance of the Rules and the mischief which the section was intended to address, would as Ormiston JA observed in Agtrack produce a bizarre outcome. All the more so where the interpretation of such a provision may cut across Commonwealth legislation.
146Ultimately, whether the interests of justice require the expiry of a limitation period to be put to one side is to be approached as a matter of substance. Where a new statutory cause of action is sought to be introduced arising out of the same facts as those already pleaded, and a defendant is on notice that a claim is being made against it with respect to those same facts, the interests of justice are likely to favour amendment, notwithstanding that what is sought to be set up is technically a new cause of action. Similarly, an amendment which introduces new facts which are uncontroversial, is unlikely to provide a proper basis for opposition.
147Characterising the operation of the rule and the section in this way involves no departure from the judgment of the Full Court in Agtrack. Properly considered, in my view, Agtrack does not involve reading into r 36.01(6) or s 34 some requirement that an amendment can only be allowed if a new cause of action arose out of the same or substantially the same facts. The reasoning, albeit obiter dicta, is that of a strong Court of Appeal and it would be surprising if Ormiston JA reintroduced the same or substantially the same facts hurdle having noted a few pages earlier that the new rule was not drafted in this manner. A contextualised reading of the reasons suggests that his Honour’s recognition that the new cause of action arose out of exactly the same facts as were already pleaded (and moreover that the new cause of action was the only legal liability available and would have been appreciated as such) was relevant to and informed an assessment that the overall interests of justice favoured amendment.
[28]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [99]–[132].
[29]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [142]–[147].
The general indorsement in Hepi stated that the plaintiff commenced the proceeding as a group proceeding on her own behalf and on behalf of all persons who entered into a finance agreement with Toyota obtained through a dealer for the purposes of acquiring an automobile in which a flex commission was paid to the dealer. The indorsement set out a range of claims, in broad terms derived from the nondisclosure of the base rate of the flex commission received by the dealer. It asserted that the plaintiff and group members were entitled to relief related to the differential between the base rate and the contract rate.
The statement of claim that followed alleged misleading and deceptive conduct in relation to the flex commission. The essence of the claim was one of non-disclosure by dealers of the fact that the contract rate set by the dealers was higher than the base rate in Toyota’s car loans and that the dealers had received a commission referable to the difference between the contract rate and the base rate. The proposed amendments, whilst also making a claim for misleading and deceptive conduct, alleged such conduct in relation to add-on insurance. The proposed amendments alleged the plaintiff and some group members were not told of the optional nature of add-on insurance and/or were not told that the add‑on insurance products may have been unsuitable to their needs.
In Hepi M Osborne J said, ‘[l]imitation issues loom large’,[30] with the relevant limitation period pertaining to at least some or all of the claims sought to be advanced by the amendment having expired.[31] That was the case in circumstances where there was not a hint of a claim relating to add on insurance in the general indorsement or in the existing statement of claim. Leave to amend was refused.[32]
[30]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [67].
[31]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [85].
[32]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [139], [177].
I agree with and respectfully adopt M Osborne J’s careful analysis in Hepi. I propose to proceed accordingly, both in relation to my consideration of the Indorsement in this case and in my consideration of proposed amendments which seek to introduce time barred claims falling outside the Indorsement.
G Issues to be determined
G.1 The proposed claim based on breach of New York law
G.1.1 Submissions
The amendments proposed to the implied obligation in paragraph 127 of the 2FASOC are relevantly in the following terms:
In exercising the
Lenders’ECA Project Sponsors’ Powers and Discretions, collectively and individually, as a matter of the governing English law in respect of the Finance Agreements (save for the Ex-Im Credit Agreement), and as a matter of the governing New York law in respect of the Ex-Im Credit Agreement, theLendersECA Project Sponsors were subject to an implied obligation under the Finance Agreements to take into account all relevant factors and to disregard all irrelevant factors, and to exercise those powers and discretions not arbitrarily or capriciously, but rather rationally and in good faith, with reasonable care and skill and consistently with the contractual purpose of the Finance Agreements (being a long-term project finance agreement to fund the timely delivery of the Jabiru-1 Project).Proposed amendments to paragraph 127.A similarly seek to rely on New York law as a separate source of the implied obligation of good faith with respect to the Ex‑Im Agreement.
Paragraph 129.A, which alleges breach, as proposed to be amended, carries through the reliance on New York law by reference to the Ex-Im Agreement in addition to the existing reliance on English law.
The plaintiffs submitted New York law has always been pleaded. They submitted the claim based on a breach of New York law is not a new story or new set of ideas. The plaintiffs highlighted:
(a)paragraph 20 of the FASOC which alleges the ‘Finance Agreements … are governed by English law with the exception of the Ex-Im Agreement which is governed by New York law’;
(b)paragraph 127 which they submitted, by necessary implication from paragraph 20, picks up obligations arising under New York law with respect to the Ex-Im Agreement. They submitted this paragraph was mistakenly amended in the ASOC to add the words ‘as a matter of the governing English law’, rendering it inconsistent with paragraph 20;
(c)paragraph 129.A which, as unamended, erroneously pleads breaches of the implied obligations set out above ‘as a matter of the governing English law’, a plea that is also inconsistent with paragraph 20.
The plaintiffs submitted that while the FASOC would better have expressly referred to New York law, the existence of paragraph 20 means that on no view could this omission be taken to be a disavowal of the fact that New York law was the governing law of the Ex-Im Agreement. They submitted that the Ex-Im Agreement (and the fact it is governed by New York law) has been the subject of material facts since the filing of the SOC and ASOC. Even if the amendments constitute a new claim, the plaintiffs submitted the following remarks of M Osborne J in Hepi are apposite:[33]
Where a new statutory cause of action is sought to be introduced arising out of the same facts as those already pleaded, and a defendant is on notice that a claim is being made against it with respect to those same facts, the interests of justice are likely to favour amendment, notwithstanding that what is sought to be set up is technically a new cause of action.
[33]Hepiv Toyota Finance Australia Ltd [2025] VSC 121 [146].
The plaintiffs seek to rely on rr 36.01(1)(b) and 36.04 of the Rules to correct the existing inconsistency in the FASOC, which senior counsel described as ‘an obvious error’. The True July Affidavit states it was not the intention of the plaintiffs at the time of filing the ASOC to exclude a claim for breach of the implied obligations under New York law in respect of the Ex-Im Agreement.
The plaintiffs submitted in the alternative that if the New York law claim constitutes a new claim (which they deny), the question of whether such a claim is statute-barred is ‘difficult and complex’. The answer lies in the relevant statute of limitation in New York and complex issues of private international law. Taken at face value, the Holwell Report is not dispositive of this question. As a consequence, it is not possible to determine that the amendments have no real prospect of success at trial (which would otherwise be a highly relevant factor in the exercise of the discretion to refuse them).
The Lenders submitted the Court should not permit the plaintiffs to rely on New York law for at least five reasons:
(a)First, as set out in the Holwell Report, the New York law claims are statute‑barred. The loss of a limitation defence which would arise by permitting the plaintiffs to plead this new cause of action would reflect the loss of a substantive right which is prejudicial to the Lenders.
(b)Second, the proposed New York law claims form an entirely new claim that was not previously the subject of the Indorsement or the subsequent pleadings filed by the plaintiffs. The New York law claims have not ‘always been pleaded’. In the ASOC the plaintiffs made amendments to plead that it was English law that was breached, purportedly following the receipt of advice from English counsel. There was no amendment in the ASOC alleging any breach of an agreement the subject of New York law. Even if the plaintiffs have previously pleaded that the Ex-Im Agreement was governed by New York law, at no time has it been alleged that New York law was breached. An affidavit of Mr Shepherd dated 13 October 2023 in support of the provision of top up security for costs noted that no issues of New York law were pleaded. The plaintiffs did not contend that Mr Shepherd’s understanding was incorrect.
(c)Third, the proposed New York law claims raise a ‘new story’ or a ‘new set of ideas’.[34] The fact that these allegations represent a ‘new set of ideas’ is demonstrated by the fact that, if permitted, an assessment of the allegations will require the parties to file entirely new expert evidence in relation to the New York law issues. These claims did not form part of the Indorsement. They have not been the subject of any of the breach allegations found in the three versions of the statement of claim filed to date. The ‘new story’ nature of the allegations is significant for two reasons identified in Hepi. Firstly, it supports the Lenders’ position that the amendments should not be allowed at all. Secondly, even if the amendments are allowed, they should only take effect from the time of amendment (and not from the commencement of the proceeding).
(d)Fourth, the plaintiffs have provided no satisfactory explanation for the extraordinary delay in bringing the New York law claims. In proceedings commenced in the Federal Court of Australia in 2017 by Newsat and Jabiru against the former Chief Executive Officer, Mr Adrian Ballintine and non-executive director, Mr Richard Green (the ‘Receiver Proceeding’), an alleged breach of an implied duty of good faith under New York law under the Ex‑Im Agreement was pleaded by Mr Ballintine. It should be inferred that the plaintiffs have been aware of the claims made in the Receiver Proceeding for at least five years. Further, the plaintiffs’ delay needs to be viewed in the broader context of the Lenders’ repeated complaints about the adequacy of the plaintiffs’ pleadings since February 2022. It would be inconsistent with the overarching purpose in the CPA to allow the amendments.
(e)Fifth, the Lenders will be prejudiced by the addition of the New York law claims, including for the following reasons:
(i)Additional steps will be required and consequential extensions made to the existing timetable, including additional discovery from the plaintiffs and potential subpoenas to third parties (which may have additional complications where the third party is a foreign entity).
(ii)New witnesses will need to be identified (or otherwise the matters to be addressed by the currently proposed lay witnesses will need to be expanded) to address the new claims.
(iii)If the Lenders are required to meet the current timetable, the Lenders would be required to prepare their amended defence at the same time that they would need to prepare their lay evidence, which further prejudices their ability to prepare their lay evidence.
(iv)The security ordered up to mediation did not account for preparing an amended defence or other consequential steps.
(v)The amendments will result in either the loss of the trial date or (if the current timetable is maintained) the Lenders being unfairly prejudiced in their ability to prepare for trial, in particular the preparation of their evidence.
[34]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [162].
G.1.2 Consideration
The first step is to determine whether the proposed amendments in dispute fall within the scope of the Indorsement. If the answer to that question is yes, the application is to be dealt with in the usual way. If the answer to that question is no, the application must be dealt with as a proposal to amend so as to plead a cause of action which is statute-barred.
As held by M Osborne J in Hepi, ‘[w]here a proceeding is commenced by writ with a general indorsement, … the statement of claim so served cannot expand beyond the area marked out by the indorsement’.[35]
[35]Hepiv Toyota Finance Australia Ltd [2025] VSC 121, 140.
In Renowden v McMullin,[36] the plurality of the High Court said of an indorsement:[37]
The indorsement on the writ not being a statement of claim is not in the nature of a pleading. In our opinion it should not be construed as such but read for what it is, namely, a notice in the nature of the plaintiffs’ claim, of the cause thereof and of the relief sought in the action. It suffices if it conveys that information generally and without particularity save where and to the extent to which particularly is indispensable to notify the required elements of the indorsement.
[36](1970) 123 CLR 584 (‘Renowden’).
[37]Renowden v McMullin (1970) 123 CLR 584, 595.
Their Honours continued with an observation pertinent to the current application:[38]
The indorsement marks out the perimeter or range of the area within which the plaintiff may express his claim in a formal fashion in his statement of claim whether as originally filed or as sought to be amended.
[38]Renowden v McMullin (1970) 123 CLR 584, 595.
The nature of the plaintiffs’ claim in the Indorsement is a claim for breach of the implied obligation of good faith and reasonableness which applied to any decision of a relevant Financier – see paragraph 13 of the Indorsement as extracted above.
Paragraph 13 does not elaborate upon the basis of the implied obligation of good faith and reasonableness alleged to apply to ‘any decision’ of a relevant Financier. Breach is asserted in paragraph 14. ‘Financier’ in paragraph 14 is a reference to the definition of ‘Financiers’ in paragraph 2(c)(i), which includes each of the Lenders. The reference to breach by the ‘Financiers’ in paragraph 14 is broadly cast, but is tied back or referable to breach of the ‘Common Terms Agreement’. That is, rather than breach of the group of agreements identified in the Indorsement as the ‘Finance Agreements’. The Common Terms Agreement is specified in paragraph 13 as the source of the implied obligation of good faith and reasonableness. The definition of ‘Finance Agreements’ in paragraph 2(c) includes the Common Terms Agreement and various other agreements including the Ex-Im Agreement.
Although the obligation in paragraph 13 of the Indorsement is said to arise from the ‘Common Terms Agreement’, it is important to bear in mind that the Indorsement is not a pleading. As stated in Renowden, it is a document intended to put the defendants on notice of the claims against them.
I do not consider that alleging an implied obligation of good faith and reasonableness under the Ex-Im Agreement and the breach of that obligation is going outside the perimeter or range of the Indorsement in circumstances where:
(a)paragraph 13 refers to the implied obligation applying to ‘any decision of a relevant Financier’;
(b)paragraph 2(c)(i) defines Financier as including Ex-Im; and
(c)paragraph 14 alleges breach by the Financiers ‘by reason of the conduct in paragraphs 7 to 12’ (which refer to the Finance Agreements and which are defined in paragraph 2(c)(ii) to include the Ex-Im Agreement).
I do not accept the Lenders’ submission that by the proposed amendments, the plaintiff is introducing an entirely new and original cause of action, a ‘new story’ or a ‘new set of ideas’ from those in the Indorsement which ‘change[s] the whole character of the proceeding’.[39]
[39]Hepiv Toyota Finance Australia Ltd [2025] VSC 121, [140].
Existing paragraphs 127, 127.A and 127.B of the FASOC plead implied obligations not by reference to or arising under the Common Terms Agreement, to which express reference is made in paragraph 13 of the Indorsement, but as implied obligations ‘under the Finance Agreements’. As already noted, this term is defined at paragraph 19 of the FASOC to include, inter alia, the Common Terms Agreement and the Ex-Im Agreement.
In paragraph 138 of the Lenders’ Defence, in further answer to the allegations of breach and loss referable to the implied obligations relied on by the plaintiffs, the Lenders plead that the plaintiffs commenced the proceeding on 18 June 2020. They plead that to the extent any cause of action for breach of contract under English law accrued on or before 18 June 2014 (which is denied) the claim is not actionable and is time-barred by operation of s 5 of the Limitation Act 1980 (UK).
The Lenders’ Defence does not plead that the plaintiffs’ claim, one which relies not simply on the implication of the good faith obligation in the Common Terms Agreement, but one which relies on the implication of the obligation in the Finance Agreements more broadly, amounts to a new cause of action falling outside the Indorsement. Had the Lenders wished to plead that was the case, they would have pleaded that a limitation date applied under English law calculated by reference to the date of the FASOC, that is 24 December 2024, or by refence to the date of the SOC, 4 February 2022. They did not do so. Their limitation defence is based on the date on which the proceeding was instituted, being the same date on which the Indorsement was filed.
It is unsurprising the Lenders do not assert the plaintiffs’ pleas in paragraphs 127–131 are statute barred from the date of the SOC or the FASOC. The Common Terms Agreement, including its definitions, has application by reason of clause 1.2(c) to all of the Finance Agreements, including the Ex-Im Agreement, unless a contrary indication appears. The governing law clause in clause 33 of the Common Terms Agreement is the source of the references to English law in the SOC and ASOC (and indeed the FASOC).
As the High Court said in Renowden, when the FASOC pleads English law, it seeks to express the plaintiffs’ claim in a ‘formal fashion’,[40] to identify the source of the implied obligation of which the Indorsement gave notice to the defendants. The FASOC formally identifies the source of that obligation and does so accurately for all of the Finance Agreements, except for the Ex-Im Agreement. To identify by amendment the source of the same obligation for the Ex-Im Agreement, New York law, does not to my mind mark a change in the nature of the plaintiffs’ claim of which the Indorsement gave notice.
[40]Renowden v McMullin (1970) 123 CLR 584, 595.
This is not a case where a different cause of action is pleaded from that of which the Indorsement gave notice. It is an elaboration of the basis of the claimed obligation.
I do not consider it is inconsistent with the Indorsement to expand paragraphs 127, and 127.A of the FASOC, to refer, not only to the Common Terms Agreement but also to refer to one of the specific Finance Agreements mentioned in paragraph 2(c) of the Indorsement, the Ex-Im Agreement, as a further source of the implied obligation alleged to apply to ‘any decision of a relevant Financier’ and which, by paragraph 129.A, was breached.
The proposed amendments do not introduce a claim which is different in character to the good faith obligation set out in the Indorsement. The amendments are a further particularisation of the same cause of action, a cause of action previously but erroneously particularised in the FASOC by reference to English law only.
The reference to New York law proposed in the 2FASOC is a reference to the source of the good faith obligation which was not identified in the Indorsement and which, as currently pleaded in paragraphs 127 and 127.A of the FASOC, is inconsistent with the plea in paragraph 20. That inconsistency was picked up by the Lenders in paragraph 127(c) of the Lenders’ Defence:
[127]The Lenders deny the allegations in paragraph 127 of the ASOC and say further:
(c)that the plaintiffs have failed to plead any basis for the implication of any such term as a matter of English law (both in respect of the Finance Agreements which are governed by English law and those Finance Agreements listed in paragraph 20(b) above which are not governed by English law) and in any event the Lenders deny there is any such basis;
(emphasis added)
The FASOC does not allege a breach of an agreement the subject of New York law in paragraph 129.A. It instead pleads ‘[a]s a matter of the governing English law, the Lenders breached the obligations in paragraphs 127, 127.A and 127.B’. However, those breaches are currently pleaded as alleged breaches of implied obligations in the Finance Agreements which include the Ex-Im Agreement. No difference in substance exists between the existing pleading and the proposed amendments so far as the claim of which notice was given in the Indorsement is concerned. What is alleged as proposed by the amendments in the 2FASOC remains as per the Indorsement, a breach of the implied term to act in good faith.
If I am wrong in my characterisation of the new claim and it falls outside the Indorsement, I nonetheless consider the interests of justice favour the amendments, notwithstanding what is introduced would be technically a new cause of action.
I proceed on the basis that if the cause of action is a new cause of action, the question of whether the interests of justice require the expiry of the limitation period be put to one side (as would be the effect of allowing the amendments backdated to the date of the Indorsement) is to be approached as a matter of substance.
The Holwell Report states that New York contract law recognises an implied covenant of good faith and fair dealing in all contracts and that an action upon a contractual obligation or liability, express or implied, must be commenced within six years. As can be seen from the Holwell Report, the cause of action proposed in reliance on the Ex-Im Agreement appears to be well founded. The limitation period appears to be the same as that which applies to the implied obligation based on English law, as pleaded in the Lenders’ Defence.
The assumed new cause of action is one based on New York law but, one which, like the existing cause of action pleaded by reference to English law, has at its heart an implied obligation of good faith.
To pick up the language used by Ormiston JA in Agtrack, although the limitation period has expired, it is appropriate to exercise the Court’s discretion to permit the amendments because there is ‘a close connection between the claim which has already been instituted by the filing of the writ with the [Indorsement] and the claim which [the plaintiffs] wish to add by way of amendment’.[41]
[41]Agtrack (NT) Pty Ltd (t/as Spring Air) v Hatfield (2003) 7 VR 63; [2003] VSCA 6, [52].
In Winston, Leeming JA formulated a series of propositions, including as follows:[42]
138Fourthly, quite a few of the cases have been argued on the basis that the issue was whether the same cause of action was being pleaded, with the amendments being regarded as particulars of the existing cause of action, or whether the amendments introduced a “new” cause of action. … Obviously, if the court concludes that a different cause of action is pleaded, it will be necessary to ask whether it arises from the same or substantially the same facts. But even where the debate is sought to be framed in terms of whether it is a different particularisation of the same cause of action, the conclusion will tend to turn on whether the facts sustaining the new particulars are substantially the same as those underlying the original allegations. In most ordinary cases it will no longer matter whether a new proposed particular of negligence produces the result that there is a new cause of action, because the real question will be that posed by s 65(2)(c), namely, whether if there is a new cause of action, it is one which arises out of the same or substantially the same facts.
139Fifthly, a mere change in the legal character of a cause of action will be a different cause of action, but nonetheless one which arises out of the same facts. An example might be adding a cause of action in tort based on a wholly concurrent duty in contract and tort where the original pleading only alleged a breach of contract Under the current regime, that is plainly authorised: insofar as it is a new cause of action, it is one arising on the same facts as have already been pleaded, and thus is authorised by s 65(2)(c).
[42]Commonwealth of Australia v Winston (2024) 116 NSWLR 111; [2024] NSWCA 277, [138]–[139].
Although unlike s 65(2)(c) of the Civil Procedure Act 2005 (NSW), rule 36.01 does not require it, the claim which relies on New York law arises out of the same facts or substantially the same facts as those supporting the claims already pleaded. What is proposed is a change in the legal character of the cause of action, the law which underpins the implied obligation, but, as discussed by Leeming JA, the different cause of action is nonetheless one which arises out of the same facts.
I do not accept the submission of the plaintiffs in the alternative that if the New York law claim constitutes a new claim the question of whether the claim is statute barred is ‘difficult and complex’. I also do not accept the Lenders’ submission that because expert evidence in relation New York law will be required, the allegations to be introduced by the amendments represent a ‘new story’ or a ‘new set of ideas’.
I agree with the plaintiffs that the proposed claim based on breach of New York law cannot be characterised in this way. I do not place great weight on the distinction between a plea that English law was breached whereas New York law was only alleged to be the governing law under the Ex-Im Agreement. I accept the amendments to rely on New York law are ones which, once made, will correct an obvious error. By reference to the True July Affidavit, I accept the proposition that the plaintiffs did not deliberately set out to abandon reliance on the Ex-Im Agreement in support of their implied obligation case. It seems to me the issue was simply overlooked.
I am not persuaded by the Lenders’ submission that to permit the amendments would require additional steps and extensions to the timetable. There is six months between now and the trial date. I do not accept that additional discovery or new subpoenas will be needed to deal with the amendment so as to meet the claim that relies on New York law. If there are security for costs issues that arise due to the amendments, they can readily be dealt with, if not resolved by agreement.
The plaintiffs have filed their lay evidence. That gate has closed. The defendants’ lay evidence is due on 15 September 2025. No specific lay witness was identified by the Lenders as being unavailable. It seems likely that the same lay witnesses whose evidence would be relied on by the Lenders to give evidence of fact in response to the alleged breach of the implied duty of good faith under English law will be relied on in response to the allegations of breach under New York law. While the plaintiffs are entitled to file lay witness statements in reply, those statements, which are to be filed by 15 October 2025, comprise and are limited to reply evidence only.
There will be no prejudice occasioned to the Lenders by reason of the amendments so far as expert evidence is concerned. Instructions were provided to the Honourable Richard J Holwell on 22 July 2025. The Holwell Report was provided on 30 July 2025.
I agree with the Lenders that the plaintiffs’ explanation for the delay is unsatisfactory. I note the amendments sought to be made in 2025 relying on New York law advances an implied duty of good faith founded on the same basis as advanced by Mr Ballintine in the Receiver Proceeding in the Federal Court, which commenced in 2017. That fact and the absence of a satisfactory explanation for the delay would assume far greater significance in light of previous delays if I accepted the proposition that the amendments would result either in the loss of the trial date or in the Lenders being unfairly prejudiced in their ability to prepare for trial. I do not accept those submissions. The circumstances here are quite different from those which confronted Button J in Janssen. There will not be substantial delay or unfair prejudice. There will be no material change in the lay or documentary evidence required as a result of the amendments as identified in Kuipers. This is not an entirely new cause of action raising different facts which need to be addressed as was the situation in Hepi. The only change is that expert evidence will be needed about New York law. At least some evidence directed to that topic, should the Lenders choose to rely on it at trial, is already contained in the Holwell Report.
Contrary to the Lenders’ submissions, I do not see it as a disadvantage that the Lenders will be required to prepare their amended defence at the same time they need to prepare their lay evidence. In some cases this would be seen as an advantage, enabling the party concerned to more readily ensure there is a close correlation between the defence and the evidence proposed to be relied on in support of it.
For the reasons discussed it is appropriate to allow the amendments which rely upon New York law.
G.2 Claim for breach of directors’ duties
G.2.1 Submissions
The proposed amendments in paragraphs 142–150 of the 2FASOC allege that between at least December 2014 and 22 January 2015 (or thereafter), each of the Lenders was a de facto director and/or a shadow director of NewSat, and that each of the Lenders breached directors’ duties in ss 180, 181 and 182 of the Corporations Act 2001 (Cth) (the ‘Corporations Act’).
Section 9AC(1)(b) of the Corporations Act provides that, unless the contrary intention appears, a person is a director if the person is not validly appointed as a director if:
(i) they act in the position of a director [a de facto director]; or
(ii)the directors of the company are accustomed to act in accordance with the person’s instructions or wishes [a shadow director].
The breaches of directors duties by the Lenders acting as de facto or shadow directors are alleged to arise from that the Lenders, or alternatively Ex-Im alone, instructing the directors of NewSat to negotiate with Lockheed Martin Corporation (‘Lockheed Martin Corporation’), and from themselves conducting negotiations with Lockheed Martin with respect to the ‘Satellite Construction Contract’ to the exclusion of NewSat and without NewSat’s knowledge.
The plaintiffs submitted r 36.01(6) of the Rules and s 34 of the Limitations Act provide that the Court may allow an amendment notwithstanding the expiry of a limitation period, where to allow the amendment does not cause any prejudice which cannot be remedied in some way. They submitted the loss of a limitation period is ‘not relevant prejudice’.
The plaintiffs submitted the additional claims arise out of substantially the same facts in the Indorsement, subsequently put in issue in the SOC and FASOC, but about which the plaintiffs have only on discovery/critical document disclosure or on the receipt of defences obtained enough information to properly plead.
The plaintiffs drew attention to the observation by Osborne J in Hepi that: [43]
Where a new statutory cause of action is sought to be introduced arising out of the same facts as those already pleaded, and a defendant is on notice that a claim is being made against it with respect to those same facts, the interests of justice are likely to favour amendment, notwithstanding that what is sought to be set up is technically a new cause of action.
[43]Hepi v Toyota Finance Australia Ltd [2025] VSC 121, [146].
The Lenders submitted the amendments should not be allowed for five reasons:
(a)First, because the claims are statute barred. Consistent with Hepi, to allow these claims would result in the loss of a substantive right.
(b)Second, the proposed breach of director duty claims were not part of the Indorsement. To allow the amendments would require the Court to consider a new set of ideas and to address new issues.
(c)Third, the claims cannot succeed based on the lay evidence that has been filed by the plaintiffs.
(d)Fourth, there has been no adequate explanation for the delay in making such claims.
(e)Fifth, if the claims are allowed, the Lenders will be prejudiced because they will be required to adduce additional lay evidence directed to new issues.
COFACE submitted the proposed claims are statute barred pursuant to s 1317K of the Corporations Act and ought not be permitted to be advanced at this late stage. It submitted the plaintiffs’ contention that the additional claims arise substantially out of the same facts is entirely unpersuasive. It had never previously been contended that the Lenders were shadow or de facto directors and thereby owed duties to the plaintiff. COFACE referred to Impiombato v BHP Group Limited,[44] where Beach, Lee and O’Bryan JJ held that although s 1322(4)(d) of the Corporations Act appears on its face to empower the Court to extend the limitations period referred to in s 1317K:[45]
… the current weight of authority is to the effect that s 1322(4)(d) does not apply in respect of provisions, such as s 1317K, which impose a time limitation having a “jurisdictional character” (in the sense of denying the right of action and not merely the right to certain forms of relief).
[44][2025] FCAFC 9 (‘Impiombato’).
[45]Impiombato v BHP Group Limited [2025] FCAFC 9, [135].
COFACE took issue with the proposition that the plaintiffs have only now obtained enough information to properly plead these claims. It submitted that many of the documents relied upon are documents discovered by the plaintiffs that have been in the possession of the plaintiffs for many years.
In response, regarding s 1317K of the Corporations Act, the plaintiffs submitted that to hold that s 1317K operates as an absolute bar that is incapable of extension pursuant to s 1322(4)(d) of that Act is inconsistent with Beech-Jones J (as his Honour then was) in Karl Suleman Enterprizes Pty Limited (In Liq) v Pham (No 2).[46]
[46](2013) 273 FLR 127, [114].
Given the divergence of authority and the pending decision of the Full Court of the Federal Court in the appeal of Chu v Lin, in the matter ofGold Stone Capital Pty Ltd,[47] the ability or otherwise to rely on s 1322(4)(d) to extend time otherwise limited by s 1317K should be determined at trial.
[47][2024] FCA 766.
Responding to the submission that the fact of direct negotiations between Ex-Im and Lockheed Martin was known, the plaintiffs submitted the extent of those negotiations was not known until documents were identified by the Lenders in particulars to the Lenders’ Defence (and subsequently produced) and in their discovery.
G.2.2 Consideration
I do not accept the proposition, if indeed the plaintiffs contend it to be the case, that the proposed de facto/shadow director duty claim sought to be introduced by the amendments relates to or concerns a claim, notice of which was conveyed by the Indorsement. The Indorsement gave notice of claims for breach of the implied obligation of good faith and reasonableness. It gave notice of claims based on unconscionable conduct in contravention of the ACL. Nothing about the Indorsement gave notice of or referred to the defendants acting as directors, to directors duties, or to breaches of directors duties. The amendments which seek to assert that the Lenders acted as de facto and/or shadow directors are amendments to introduce a new cause of action that is well and truly outside the ‘perimeter or range’ of the area traversed by the Indorsement. These proposed amendments introduce a ‘new story’ of which the defendants had not previously been given notice in the Indorsement.
I proceed on the basis as stated in Hepi that whether the interests of justice require the expiry of the time limit in s 1317K be put to one side is to be approached as a matter of substance. Leaving to one side the debate about s 1322(4)(d), which based on the issues expressed in Impiombato, appears not to give power to extend the time limitation in s 1317K, the loss of limitation defences, which would be represented by permitting the proposed amendments to take effect from the date the proceeding was initiated reflects the loss of a substantive right. The litigation of stale claims constitutes potentially significant injustice. Contrary to the plaintiffs’ submissions, I proceed on the basis that the loss of a limitation defence by amendment is a relevant prejudice to which the Court may have regard in determining whether or not to allow the amendments.
The matters to be considered in determining whether a person is a de facto director were identified by Gleeson J in BCI Finances Pty Ltd (In Liq) (No 4)[48] by reference to Ford’s Principles of Corporations Law (‘Ford’):[49]
(1)the duties that would be expected to be performed by a director in the relevant company – noting that this will vary according to matters such as the size of the company and the allocation of the responsibilities within the company. This is subject to the requirement that the person performs what the court in Deputy Commissioner of Taxation v Austin [1998] FCA 1034; (1998) 28 ACSR 565 referred to as “top‑level management functions”;
(2)the duties actually performed by the person;
(3)whether others in the company considered the person a director;
(4)whether the company held out the person as a director;
(5)whether the person held themselves out as a director; and
(6)whether those outside the company considered the person to be a director.
[48](2016) 348 ALR 227, [244].
[49]BCI Finances Pty Ltd (In Liq) (No 4) (2016) 348 ALR 227, [244].
To establish that the Lenders acted as a de facto director as alleged by the proposed amendments would require evidence directed to each of the elements listed in the extract from Ford. Of significance, in circumstances where the plaintiffs have filed one witness statement only from one director of NewSat is the need for the plaintiffs to prove elements 3 and 4 in the summary reproduced above. Existing evidence filed by the plaintiffs does not address those matters. They are not the sort of matters that would ordinarily be the subject of evidence from the defendants faced with the allegations proposed to be made by the amendments and the existing state of the evidence. That is particularly so given the order permitting reply evidence.
In Re Akron Roads Pty Ltd (in liquidation) (No 3)[50] Robson J identified the applicable principles when called upon to determine whether a person is a shadow director:[51]
(a)To establish that a defendant is a shadow director of a company it is necessary to prove:
(1)who are the directors of the company, whether de facto or de jure;
(2)that the defendant gave instructions or expressed wishes to those directors on how to act in relation to the company or that he was one of the persons who did so;
(3)that those directors acted in accordance with such instructions of wishes; and
(4)that there were accustomed so to act.
[50](2016) 348 ALR 704 (‘Re Akron’).
[51]Re Akron Roads Pty Ltd (in liquidation) (No 3) (2016) 348 ALR 704, [271].
If the amendments alleging the Lenders were shadow directors were permitted, an issue in the trial would be whether the directors of NewSat acted in accordance with instructions or wishes of the Lenders and that they were accustomed to so act. Elements 2, 3 and 4 which in Re Akron Robson J identified as necessary to be proved to establish a person is a shadow director concern issues of fact that do not arise from the existing claims that the Lenders failed to act in good faith. It is not part of the facts relied by the plaintiffs to found their claim that the Lenders engaged in unconscionable conduct to rely on facts that overlap with or would need to be established to satisfy the criteria identified in Re Akron.
The plaintiff did not seek to contradict the submission by the Lenders that the existing evidence of Mr Grimwade, the sole director witness for the plaintiff, does not address the factual matters identified in Re Akron. There being no further opportunity for the plaintiffs to file lay evidence in chief, to permit the proposed amendments would be to permit the plaintiffs to amend to pursue claims at trial with no reasonable prospects of success. That is, for want of evidence of the facts in support of proof of elements 2–4 identified by Robson J in Re Akron as set out above. The same is the positions concerning elements 3 and 4, identified in Ford concerning de facto directors. For that reason, to permit the proposed amendments relating to alleged de facto/shadow directors, introduced for the first time five years after the proceeding was issued, would be futile.
Responding to the submissions by the plaintiffs, I do not accept that the proposed amendments arise out of the same or substantially the same facts as those already pleaded, or, even if they do, that the existing facts alleged could arguably support a finding that the Lenders acted as de facto or shadow directors. If it is assumed the plaintiffs might be able to prove the Lenders acted as a de facto or shadow director, introducing these claims which are very different to the causes of action pleaded against the defendants in relation to events that are alleged to have occurred more than 10 years ago is likely to cause prejudice to the defendants whose ability to proof witnesses and to lead evidence directed to this new issue of substance after such a long passage of time is likely to be compromised.
For the reasons discussed, I am not persuaded there would be utility so far as the plaintiffs are concerned in permitting the proposed amendments. I am persuaded that to permit the amendments to introduce new claims which are time barred would cause real prejudice to the defendants. Having regard to the long delay in bringing forward such amendments, to permit them to be made now, five years after the Indorsement was filed, in which such claims were neither made nor foreshadowed, would be to act in a manner inconsistent with the CPA.
That being the case, there is no need to resolve the contested question about whether existing or recently discovered documents have brought about the plaintiffs’ desire to include such a cause of action or whether the plaintiffs were always in possession of documents which permitted them to assess whether such a cause of action should be pleaded. It is also unnecessary to decide whether it is preferable to determine issues relating to s 1322(4)(d) of the Corporations Act at an interlocutory stage or whether such issues are better left until trial.
G.3 Claims regarding the Consult Obligation and the Societe Generale Additional Consult Obligation
G.3.1 Submissions
Paragraphs 20.A–20.F, 118.HA, 129.A.8, 130 and 138–141 of the 2FASOC seek to add claims that:
(a)the Lenders breached the Consult Obligation; and
(b)Societe Generale breached the Societe Generale Additional Consult Obligation.
The issues raised by these paragraphs of the 2FASOC are not new. It is important to refer to the current pleadings as to do so, shows how these issues have evolved.
The FASOC alleges at paragraph 20.A.1 and the Lenders and COFACE Defences both admit that on the proper construction of the Finance Agreements, COFACE was required to be consulted before any waiver of any term of the COFACE Facility Agreement. Paragraph 46.A of the FASOC alleges that the Lenders consulted with and obtained the approval of COFACE with respect to their decision to impose Waiver 3 on the plaintiffs.
In response to paragraph 46.A, the Lenders’ Defence refers to communications on 28 July 2014 and 4 August 2014 but otherwise does not admit the allegation. In COFACE’s Defence, COFACE denies there was consultation. It refers both to the receipt of email communications pleaded by the Lenders and to three other communications.
Following receipt of COFACE’s Defence, in their Replies the plaintiffs plead that Societe Generale or each of the Lenders failed to consult, or in the alternative failed to adequately consult, COFACE as required under the Finance Agreements.
The plaintiffs submitted the amendments should be allowed because they arise directly from COFACE’s Defence and from discovery and from critical document disclosure. Until COFACE’s Defence was filed the plaintiffs were not aware that COFACE denied that it was consulted. It was not until around 19 September 2024, when COFACE provided English translations of the French‑language documents forming part of its critical document disclosure made on 14 June 2024, that the plaintiffs were aware of several critical facts relevant to this claim. The plaintiffs submitted that it was only following completion of those steps that they had sufficient information to properly plead the claims. They submitted that paragraphs 20.A–20.E of the 2FASOC replace with greater specificity what is admitted in paragraph 20.A of the Lenders’ Defence. Paragraphs 138–141 of the 2FASOC plead out the breaches of the Consult Obligation and the Societe Generale Additional Consult Obligation.
The Lenders oppose the amendments. They submitted:
(a)First, the allegations are rolled up, vague and embarrassing and the Lenders do not understand the case being put against them;
(b)Second, the amendments involve a new set of ideas. The FASOC does not allege any cause of action or right to a remedy based on an obligation to consult, including under the COFACE Insurance Policy. It is possible that the parties would need to adduce further expert evidence on questions of privity of contract, limitation periods and damages under French contract law.
(c)Third, to the extent that the obligation is based solely on the Finance Agreements governed by English law the amendments would be time-barred.
(d)Fourth, there is no adequate explanation why these claims were not made earlier. While some of the matters regarding consultation now pleaded were alluded to in the Reply to the Lenders’ Defence, the basis of the claims were not clear nor was the reason for including them.
G.3.2 Consideration
It is appropriate to allow the proposed amendments in the 2FASOC concerning the failure to consult allegations. It is appropriate to do so in order to ensure that the real issues in dispute are heard and determined at the trial.
I accept the plaintiffs’ submission that the amendments arise following the service of the COFACE Defence. The allegations currently made in the Replies raising similar issues are not appropriate matters for a reply.
Responding to the matters raised in submissions by the Lenders, I do not consider the ‘pleading’ complaints provide a proper basis to refuse the amendments. The proposition the amendments involve a new set of ideas as discussed in the authorities is not sustainable. The amendments do not result from the plaintiffs crafting a new cause of action based on information or documents always available to them. The amendments have come about following the COFACE Defence which has resulted in a reframing of issues that were previously raised, albeit in a different form in paragraphs 20.A and 46.A of the FASOC. There has previously been no complaint by the Lenders about the issues now sought to be incorporated in the 2FASOC being addressed in the Replies.
I agree with the Lenders that the amendments should have been made earlier, at the latest, shortly after the provision of documents translated from French to English in September 2024. However, I do not consider the delay causes any material prejudice to the Lenders or, for that matter, to COFACE who makes no complaint about the amendments. I do not accept the assertion by the Lenders that it is ‘possible’ they will need to adduce further expert evidence concerning French law. If they do consider this necessary, there is more than six months to obtain such evidence.
For those reasons it is appropriate to allow the Consult Obligation and Societe Generale Additional Consult Obligation amendments.
G.4 Claim for breach of implied duties by refusing to approve supplier payments
G.4.1 Submissions
Paragraph 129.A.7 of the 2FASOC alleges breaches of implied duties of good faith (under English law and New York law) by ‘refusing to approve essential supplier or other payments for the plaintiffs, or failing to approve those payments in a timely manner’.
The plaintiffs relied on r 36.01(6) of the Rules and s 34 of the Limitations Act to submit the additional claims all arise out of substantially the same facts in the Indorsement, subsequently put in issue in the SOC and FASOC, but about which the plaintiffs submitted they have only obtained enough information to plead following discovery/critical document disclosure and the receipt of Defences.
The Lenders submitted the proposed new claims are time barred by s 5 of the Limitation Act 1980 (UK) and under New York law. In addition, the Lenders note that there is no adequate explanation by the plaintiffs for not bringing these claims earlier. It is said the plaintiffs have not given any good reason why they have only recently become aware of such a potential claim.
G.4.2 Consideration
I regard the allegation introduced by the proposed amendment to paragraph 129.A.7, not as a new allegation, but as an aspect of an existing claim of which notice was given in the Indorsement being the claims for breach of the good faith obligation and of unconscionable conduct. I do not regard the amendment as introducing a claim that is outside the bounds of the Indorsement. To permit the amendment in those circumstances will not alter the position concerning limitation of actions.
I accept the submission on behalf of the plaintiffs that the amendment does not introduce an ‘entirely new claim’ but instead, represents a further elaboration of existing claims. I will allow the amendment to paragraph 129.A.7.
H Disposition
For the reasons previously discussed, the proposed amendments in the 2FASOC that plead New York law, that allege failure to consult and also proposed paragraph 129.A.7 are allowed. Leave to amend to allege the defendants acted as de facto and/or shadow directors and to allege breaches of directors duties is refused.
The plaintiffs should circulate a revised proposed second further amended statement of claim that incorporates the permitted proposed amendments and that addresses the four issues discussed in paragraphs 13–16 of these reasons in a manner consistent with those paragraphs of the reasons by no later than 4:00pm on 25 September 2025.
By no later than 4:00pm on 3 October 2025 the Lenders and COFACE should notify the plaintiffs whether they continue to oppose any and if so, precisely what parts of the proposed amended pleading. If there continue to remain disputed issues relating to the proposed amended pleading, including in relation to the provision of particulars, the parties should contact my Chambers by no later than 4:00pm on 7 October 2025. If required, arrangements will then be made to list the matter to deal with such pleading issues as remain in dispute.
If the parties are unable to agree in relation to appropriate orders as to costs then, by 4:00pm on 17 September 2025 the parties should file submissions of no more than two pages addressing disputed questions of costs. Unless otherwise advised, I will determine any outstanding costs issues on the papers.
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SCHEDULE OF PARTIES
| S ECI 2020 02631 | |
| BETWEEN: | |
| JABIRU SATELLITE LIMITED (IN LIQUIDATION) (ACN 121 667 365) | First Plaintiff |
| NEWSAT LIMITED (IN LIQUIDATION) (ACN 003 237 303) | Second Plaintiff |
| - v - | |
| SOCIETE GENERALE | First Defendant |
| STANDARD CHARTERED BANK (UK Company Number ZC18) | Second Defendant |
| CREDIT SUISSE (LUXEMBOURG) S.A. | Third Defendant |
| | |
| | |
| | |
| | |
| LA COMPAGNIE FRANCAISE D’ASSURANCE POUR LE COMMERCE EXTERIEUR (Registre du Commerce et des Societes of Nanterre 552 069 791) | Eighth Defendant |
0
22
0