Kizbeau Pty Ltd v W G & B Pty Ltd

[1992] FCA 218

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY	)	V No G 238 of 1990
1
S;ENERAL DIVISION	1
B E T W E E N :

KIZBEAU PTY LTD. GARRY FRANCIS SHEILS

AND ANNA MARIA ELIZABETH SHEILS

Applicants

A N D :

W.G. & B. PTY LTD (FORMERLY

W.G. & B. McLEAN PTY LTDI AND

WALLACE GEORGE McLEAN

m:  NORTHROP J

. El

PLACE :	MELBOURNE
DATE :	6 MARCH 1992
-

I propose to give leave to amend as sought and will briefly state my reasons for so doing.

of determining the real questions raised by or otherwise	depending on the proceeding, or of correcting any defect
or error in any proceeding or of avoiding multiplicity of proceedings."

The motion for the leave to amend is brought pursuant to 0.13 of the Federal Court Rules. Under r. l the Court may, at any stage of any proceeding, on application by any party or of its own motion order that any party have leave to amend any document in the proceeding in such manner as the Court thinks fit. Sub-rule 2(2) provides:

"All necessary amendments shall be made for the purpose

The essential question raised by the proceeding before the Court involves the sale of a business of a motel at Clayton. Involved in that, and to a large extent the whole basis of the case so far, both from pleadings and on the evidence, is directed to the question of the use of certain parts of that motel for conference purposes and whether to some extent the use of them by the applicants was in conformity with a planning permit and whether representations had been made by and on behalf of the respondents as to the use of those areas for conference purposes. In the process much evidence has been given on behalf of the applicants in relation to the whole of the events leading up to the taking over of the business by the applicants. Evidence has been given that before the purchase of the business wedding receptions apparently were held at the motel. Questions then arose and became apparent during the course of the hearing, as

to whether those wedding receptions were in confo-mity with	the planning permit or not. It is fair to say that again, to
a large extent, the respondents have conducted their cross examination and their defence on the basis of the use of the conference rooms, but at the same time it must be remembered that that is only part of a much larger issue between the parties which involves the whole question of the sale of the business. If a case is made out, the damage flowing from the breach of either the obligations or breach of contract or whatever the successful cause of action might be is an issue.
The general principles to be applied in considering applications for leave to amend is to make sure that the real issues between parties are raised by the pleadings. Thus the words used in 0.13 r . 2 ( 2 ) are for the purpose of determining the real questions raised by or otherwise depending on the proceeding or of avoiding multiplicity of proceedings.
From what has been said, it would seem that, in theory at least, there would be nothing to prevent the applicants from bringing another proceeding based upon the allegations contained in the proposed amendments. There is no question raised as to the barring of any such action by a statute of limitation. The Court should grant leave to amend, unless there is some good reason why not, for instance, by way of prejudice to the person opposing the granting of leave for the amendment. The prejudice may be caused by way of being unable to rely upon any defence or any other matter which could have been raised under the previous proceeding but now cannot be
answered properly, or in cases of embarrassment, in the sense of placing the opposing party at a disadvantage, and which is
unfair to that opposing party.
In the present case the respondents have, in substance, put five main arguments why leave should not be granted. The first relates to the fact that this is a different cause of action. What has been sought is to raise it at a late stage of the applicant's case but nevertheless it is before the case has been closed. It is in this context that I mentioned before that it appears that there is nothing to stop the applicants commencing a separate proceeding on this point. Having regard to the way the case has been conducted and the width of the evidence so far dealing with the whole of the matter giving rise to the acquisition of the business it would seem to be far better to bring this claim in this case rather than to commence a separate cause of action. In any event, in my opinion, the way the case has been argued today tends to put too narrow a meaning on what is the question between the parties. The conference rooms have loomed large, yes, but the evidence has gone beyond that. There is evidence of and the fact is that a pamphlet is in evidence illustrating the holding of wedding receptions at the motel before the acquisition. It appears that wedding receptions were held there prior to the beginning of the takeover by the applicants. It appears that now there could well be an issue as to whether the holding of wedding receptions is in breach of the planning permit as it stands. These are all matters
which, to some extent, are relevant to the major issue of the conference rooms. Having regard to the fact of the nature of
the transaction between the parties, it seems to me that that is too narrow a construction of what is the real issue between the parties and should not be made.
It was then argued that the granting of the amendment would constitute prejudice to the respondents which could not be protected by costs or any other way. In this regard, reference was made to the manner in which the defence and the cross examination made of the witnesses for the applicants was
conducted. This does give rise to some problems, particularly having regard to the fact that the main concentration was on the conference rooms, but even if in the process other matters do become apparent which go beyond that, in my opinion this is a matter which should be allowed to be dealt with in these proceedings. The prejudice suggested is not in my opinion as real as it is made out to be. The Court will be able to determine what was said in the evidence to date and also what will be said in any future evidence to be given and can draw conclusions from that. This could well go also to the question of the credibility of the two applicants themselves and, in my opinion there is no sufficient prejudice here to warrant the refusal of the granting of leave to amend. The question of what conditions should be made subject to the granting of that leave will be discussed later.
It was next argued that the case for the applicants was existing hole which has become apparent to the legal advisers almost completed and that this was done to shore up an
to the applicant. This almost goes to a question of not being bona fide, but in my opinion it arose from the evidence which had been given and could well have been a matter, although not originally relevant or apparent, became apparent in the course of the hearing. The applicant's case is not yet finished and in those circumstances it seems only fair, again having regard to the provisions of the Rules and the general principles to be applied, that the applicants should have leave to amend as sought.
A related matter is really the fourth main argument put, based upon the principles of payment into Court. In my opinion I need not go into this in any detail. There are ways in which any such limitation can be overcome in this case.
The final ground of the objections was based upon the particulars of damages being sought because the particulars of damages now sought to be relied upon have been brought from a date in May 1991 to a date in December 1991. In any event having regard to the fact that the Court must give damages as they are to be found at the date of the hearing and the hearing will not be completed until some time in 1992, one would have expected possibly modified figures to be brought in at the adjourned hearing. So I do not accept that as an argument for the refusal to grant the amendment sought. Added to that, however, is a further complication that there are
additional amounts of damages claimed arising from the allegations relating to the holding of the wedding receptions.
Again, in my opinion, they are not sufficient to warrant the refusal of the granting of the leave.
There may be difficult questions arising from this, there may be an application for an adjournment of the hearing. I will hear submissions on that. The matter is fixed to resume on 17 March and there have been suggestions made that the respondents would not be in a position to commence the hearing
on that day. I propose, as I have indicated, to grant leave to amend as sought. I will hear submissions as to what should flow from that both as to the conditions, if any, to be imposed and what follows as far as the hearing is concerned.
I certify that this and the preceding six (6) pages are a true copy herein of the Reasons for Judgment of his Honour, M r Justice Northrop delivered ex tempore on 6 March 1992 as revised from transcript.

r?

Date:	19 March 1992
Date of Hearing:	6 March 1992
Date of Judgment::	6 March 1992
Counsel for applicants:	Mr P Mandie QC with MS C. Zapparoni
Solicitors for applicants:	Molomy h Molomby
Counsel for respondents:	Mr R. Robson QC with Mr Kennon
Solicitors for respondents: Wisewoulds