JL Holdings Pty Ltd v State of Queensland

[1996] FCA 779

CATCHWORDS

PLEADINGS - whether to grant leave to amend defence - consideration of prejudice to the applicant if leave granted

Land Act 1962 (Qld) ss 345, 343
Trade Practice Act 1974 s 82

J L Holdings Pty Ltd v State of Queensland and South Bank Corporation
No SG 1 of 1994
Kiefel J  Brisbane  28 August 1996

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

No SG 1 of 1994

BETWEEN:
  JL HOLDINGS PTY LTD

Applicant

AND:
  STATE OF QUEENSLAND

First Respondent

AND:
  SOUTH BANK CORPORATION

Second Respondent

JUDGE MAKING ORDER:     Kiefel J
DATE OF ORDER:  28 August 1996
WHERE MADE:  Brisbane

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. Save for paragraph 25, the respondents have leave to amend their defence in terms of Exhibit “TMMI” to the affidavit of T M McCarthy filed 28 June 1996.

1. The respondents have leave to amend their defence by adding a paragraph in these terms:

“If the Third Minister for Land Management, the Premier, Rudd, Dunning, Goldston or others are found to have engaged in the conspiracy or fraud alleged (which is denied), the Respondents deny that the said persons were authorised by either Respondent to engage in the said conspiracy or fraud and deny that the Respondents are liable therefor.”

1. The respondents pay one-half of the applicant’s costs of and incidental to the hearing of the application to amend the defence.

1. The respondents pay the applicant’s costs occasioned by the amendment.

1. The applicant have leave to amend its reply dated 22 December 1995 within twenty eight days from today’s date.

Note:Settlement and Entry of Orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION

No SG 1 of 1994

BETWEEN:
  JL HOLDINGS PTY LTD

Applicant

AND:
  STATE OF QUEENSLAND

First Respondent

AND:
  SOUTH BANK CORPORATION

Second Respondent

CORAM:Kiefel J

DATE:28 August 1996

PLACE:Brisbane

REASONS FOR JUDGMENT

The respondents seek leave to further amend their defence.  At about the time that leave was sought, trial dates were allocated for the hearing of this matter for four months at the commencement of the court year in 1997.  The matter has been the subject of substantial case management.  In the latter part of 1995 and again earlier this year the focus of directions hearings has been the definition or limitation of issues in the proceedings, although this principally concerned the statement of claim.  In that process the respondents were alerted to the extent of non-admissions contained in their pleading and to the fact that issues were not squarely raised.  The matter was left for some time on the basis that the respondents would review their pleading.  Leave was most recently sought by them to amend their defences in November 1995.  When the matter came before me in March and May 1996 it was anticipated that subject to a plea of limitation and mitigation the pleadings were closed.  What is now sought
extends beyond the matters foreshadowed and is explained by new Counsel having considered the pleadings afresh.  Nevertheless the respondents may be reproached for not attending to these matters earlier.  Whether leave to amend is to be granted is not however to be resolved by punishing the respondents.  I have, in the context of this case, where there is only a period of about six months from the time that leave was sought to the commencement of the hearing, taken the view that the most relevant consideration is whether the amendments would jeopardise those hearing dates.  If that were the case, I would be inclined to disallow the amendments.  Such an approach takes account that the loss of the hearing at that time could be said to amount to severe prejudice to the applicant, particularly since the matter, I would think, would be unlikely to be relisted until the following year.  It also takes account of a shift in attitude and that in these times a party’s “right” to present their case or their defence is viewed as subject to some limitation.

There are a number of amendments which correct the failure to make admissions as to fact.  Largely these are not the subject of objection to leave being granted.  In dealing with the amendments sought I have used the headings referred to by the respondents, the applicants for leave.  I have then identified where leave is not granted.

Want of Authority
           A number of categories of amendments are grouped under this heading.  In general terms the applicant says that want of authority should have been the subject of a specific plea.  The submission is correct.  The purpose of that is to put the other
party on notice.  The question which arises is whether the applicant is taken by surprise and whether it would be prejudiced in the preparation of its trial.  By paragraph 6(b) and 10A.4 (and the later paragraphs to the same effect) it is now sought to specifically deny that the persons named in the statement of claim as making representations had authority to bind the State of Queensland or that the applicant understood that to be the case.  It is said that it converts a non-admission of authority to a specific denial.  It also seems to me to add a particular concerning reliance or estoppel, but this aspect is not likely to require much except perhaps some further questions in cross examination of the applicant. Otherwise it seems to me that the question of authority has always been an issue.  I am not prepared to hold on a consideration of the pleadings that the allegation has no merit at all.  That might have however affected the applicant’s view of it in determining which parties were to be joined to the proceedings.  I am not satisfied, on the material put forward as to what courses might have been taken if the issue had been earlier expressly raised, that each individual officer or employee would have been joined to an action of this magnitude.  None of the matters relied upon by the applicant weigh against leave being granted.

It is also sought to raise what is essentially a question of law - that the Minister of Land Management was not an agent of the State.  The contention sought to be pursued, that the Minister is persona designata, is also sought to be raised in response to Part IX of the statement of claim.  I have not come to a view as to the merits of the argument, which the applicant contends it does not have.  It is not so obviously wrong to warrant refusal.  I do not consider the applicants can seriously contend that they are prejudiced.  In this respect whilst, once again, the applicant suggests that other
persons might have been joined to the proceedings, the material advances this as a mere possibility.  Their joinder to an action such as this is not so obvious that I could assume it would have occurred.

With respect to paragraphs 89(a) to(d) the conduct complained of is now the subject of admission but it is sought to add a denial that the State of Queensland is thereby to be taken as making the representation in question.  Previously the issue has been left only on the basis of a non-admission of the conduct.  In the way in which it is presently sought to be raised it is a little vague, in that it is not clear whether it is alleged that what is said can not amount to a representation or whether the first respondent is not to be liable for the conduct.  In any event I cannot see that the matter affects the likelihood of the trial proceeding.

The amended statement of claim contains allegations of abuse of public office (in paragraph 105C(b) in Part IX) and it is explained by the respondent that the questions sought to be raised, whether the State can be liable for the conduct of a Minister who knowingly abuses his or her office, was overlooked.  It has not been previously admitted.  My recollection was that the matter was raised during directions hearings, and that it was assumed that this would be put in issue.  It is difficult to see that the applicant could have seriously thought that the matter was not to be.  To similar effect it is sought to make a further amendment to the defence by adding a paragraph in these terms:

“133.     If the Third Minister for Land Management, the Premier, Rudd, Dunning, Goldston or others are found to have engaged in the conspiracy or fraud alleged (which is denied), the Respondents deny that the said persons were authorised by either Respondent to engage in the said
conspiracy or fraud and deny that the Respondents are liable therefor.”

And leave will also be given in that respect.

To similar effect is the plea sought to be made (re paragraphs 53.4 and 112(b)) that the first respondent cannot be estopped because of the statutory duties of the Minister, although this is referred to under the following heading.  It was a matter discussed during directions hearings and cannot, in my view, be said to take the applicants by surprise.

The Land Act Amendments
           These amendments touch on what has always been regarded as a core issue - the effect of s 345 of the Land Act 1962 (Qld).  At present the defence does not admit that any approval in writing was given pursuant to s 343 of that Act and denies that the Minister was then required to endorse approval under s 345.  The new matter sought to be raised in paragraph 25, by way of particularisation of that latter allegation (but nevertheless raising a substantial new allegation), is that the applicant never submitted a lease for approval which was in accordance with the prior approval.  It is said that it was only recently discovered that there was a material discrepancy between the two.  I have no reason to doubt the explanation.  But it is not said why it took so long to uncover the matter when the documents had been with the respondents for a long time.  The principal contention for the applicant was that the matter was covered by my judgment of 3 November 1995 with respect to amendments to the defence then sought.  It is not the same issue with which I was there concerned.  Nevertheless the principles which there applied ought also be applied here.  The respondents have
persisted in maintaining that the questions surrounding the prior approval were really not in contention.  It is of some importance now that, it seems to me, it has real potential to require substantial issues of fact to be raised by way of reply.  It places this proposed amendment in a different category.  I do not have the same level of assurance about the effect of the amendments and the pleadings cannot be permitted to remain open in this way so close to trial.  The applicant also points out that it might have joined its then solicitors who are responsible for the leases.  Given the existence of professional indemnity insurers, one could say that this may have been a real possibility.  In any event for the reasons otherwise given I consider that leave to raise this new allegation ought to be refused.

Mitigation
         Curiously, although a plea in the alternative, it is now sought to contend that if the approval ought to have been given by the Minister then the applicant failed to mitigate by not applying to the Supreme Court of Queensland for the prompt determination of the question.  One hopes that the question of law involved is therefore as simple as the respondents apparently suggest and that it is not intermixed with other factual issues.  Nevertheless, I could not say that it is bound to fail.  And it does not seem to me that the additional evidence that will need to be obtained would be substantial.  Leave will be granted.

Paragraphs 105A-H
           The principal argument raised by the applicant with respect to these paragraphs is that they are vague.  On their own this may be the case, but when they
are read with the Lands Act allegations their context is obtained.  But the answer to the applicant’s contention seems to me to be that they accord with the terms of the leave given by me on 3 November 1995 and there is no reason to reconsider the matter.

The Limitation Point
It is now sought to allege that, in so far as the cause of action for relief under s 82 of the Trade Practices Act 1974 accrued prior to 14 January 1991 (the application being filed on 14 January 1994), it is not maintainable. The applicant’s objections are firstly that the plea is defective and secondly that the respondents are estopped or should be taken to have waived their right to raise the time bar. The first would not be a ground for refusal. It seems to me it might be better dealt with by requiring outlines of argument on the point prior to appearing. But if the applicant were to identify the areas of present concern orders for particulars could be framed. Whether the respondent is to be held estopped or to have waived its rights to raise the claim is a matter which should, I consider, be raised by way of reply and determined at the hearing. The prospect that that might be the case is not so clear as to warrant denial of leave to amend.

My main concern was that the issue now sought to be raised would require the identification of the points when damage accrued and that this might prove to be a burdensome task requiring additional accounting evidence.  The applicant has not suggested this.  Presumably the experts have dealt with these matters.  There seems no basis to conclude that commencement of the trial would be prejudiced.
Costs
         The principal costs occasioned have been in preparation of written argument.  The matter was not the subject of lengthy oral argument.  The respondents must of course pay any costs occasioned to the applicant by reason of the amendments.  With respect to the costs of the hearing, which will extend to include the submissions, for the most part it seems to me that the applicant ought not to have opposed all of these amendments, some of which it must previously have been alerted to.  In those circumstances, I propose to limit its costs to one-half.

I certify that this and the preceding seven pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.

Associate

Date: 28 August 1996

Counsel for the applicant:           Mr T Matthews
Solicitors for the applicant:         Minter Ellison Baker O’Loughlin

Counsel for the first and
second respondents:                   Mr R Hanson QC and Mr J McKenna
Solicitors for the first and
second respondent:  Crown Solicitor for the State of Queensland

Date of Hearing:  31 May 1996, 4 July 1996
Place of Hearing:  Brisbane
Place of Judgment:  Brisbane
Date of Judgment:                   28 August 1996