Malouf v MBF Australia Ltd

[2006] NSWSC 1320

CITATION:	Malouf v MBF Australia Ltd [2006] NSWSC 1320
HEARING DATE(S):	28 /11/06
JUDGMENT OF:	Gzell J
EX TEMPORE JUDGMENT DATE:	11/28/2006
DECISION:	Amendments allowed. Plaintiff ordered to pay defendant's costs thrown away.
CATCHWORDS:	PROCEDURE - Miscellaneous procedural matters - Amendments - Application to further amend statement of claim at hearing raising unjust enrichment and a Quistclose collateral purpose - Adjournment inevitable - Whether amendments should be allowed - Whether costs should be reserved - Whether costs thrown away should be paid forthwith
LEGISLATION CITED:	Civil Procedure Act 2005
CASES CITED:	Queensland v JL Holdings Pty Ltd (1996-1997) 189 CLR 146
PARTIES:	Samuel John Malouf - Plaintiff MBF Australia Ltd - Defendant
FILE NUMBER(S):	SC 6089/03
COUNSEL:	Mr M L D Einfeld QC/Mr J Horowitz - Plaintiff Mr M Cashion SC/ Mr R Scruby - Defendant
SOLICITORS:	Paul Bard Lawyers - Plaintiff Cutler Hughes & Harris Business Lawyers - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

TUESDAY 28 NOVEMBER 2006

6089/03 SAMUEL JOHN MALOUF v MBF AUSTRALIA LTD

EX TEMPORE JUDGMENT

1 Two amendments to the amended statement of claim were sought at the commencement of the trial of this matter. In par 8 of the amended statement of claim it was alleged that there was a total failure of consideration, whereupon moneys were held by one Sam Hill and, upon delivery to MBF, by it on a resulting trust in favour of the plaintiff, Samuel John Malouf.

2 The further amendment sought to add these words to par 8: “or alternatively constituted an unjust enrichment of the Defendant as to which the Defendant is liable to make restitution to the Plaintiff.”

3 Mr Einfeld QC who with Mr Horowitz appeared for Mr Malouf submitted that the amendment was not directed to additional evidence but merely put a different legal complexion upon the facts.

4 Mr Cashion SC who with Mr Scruby appeared for MBF, pointed out that unjust enrichment had not been a cause of action. If I acceded to the application and allowed the new pleading, it was submitted that prejudice would be suffered by MBF in that evidence might be necessary as to whether MBF had been enriched, whether unjustly so, and what defences might be available to it.

5 Mr Einfeld sought a further amendment to par 14 which alleged that at the time the moneys were paid to Hill, and at the time Hill paid the moneys to MBF, the moneys were and had been paid by Mr Malouf to Hill for a particular purpose, namely, that the moneys be applied “to” obtain a policy of insurance to secure a business loan.

6 The defence to that allegation was a factual one: that it was wrong to say that the moneys had been applied to obtain a policy of insurance to secure the business loan. The moneys were paid in the form of a bank cheque made out in favour of MBF. It was not MBF, but rather Hill, who was to obtain the policy.

7 What was sought by the amendment was an expansion of the alleged purpose. The word “to” was to be deleted and the words “so that Hill and/or Isagila” were to be inserted in its stead.

8 It was submitted for MBF that underlying this amendment was an appeal to Quistclose principles and an attempt to expand the purpose to cover a collateral purpose or understanding. Mr Cashion submitted that he needed to give consideration to the cases to ascertain whether or not an extended purpose fell within the principle and whether there might be effective defences if an extended purpose was within the principle. That would give rise to a necessity to analyse the cases with those things in mind and that analysis might well lead to a reconsideration of the way in which the case was to be defended by MBF. It might give rise to a need to call additional evidence. It might present a need to cross-examine Mr Malouf. If I acceded to the application, Mr Cashion indicated that an adjournment application would be made by him.

9 The principle that I must bear in mind in determining an application such as this, is doing justice between the parties, as was said by the High Court in Queensland v JL Holdings Pty Ltd (1996-1997) 189 CLR 146. In that case the primary Judge took account of court management principles to deny an amendment that would cause a trial which had been set down for an extended period to be adjourned. The High Court took the view that her Honour should not have allowed management principles to outweigh the interests of the parties.

10 It is true that under the Civil Procedure Act 2005, s 57 the Court may take account of management principles in coming to a decision but, in my view, the underlying principle, to do justice between the parties, must be given considerable weight.

11 It seems to me that the amendments, while causing an adjournment application to be made, allow the real issues between the parties to be ventilated and, in my view, in order to achieve that result, I must accede to the application for amendment, albeit made at this late stage.

12 I therefore give leave to file in Court a further amended statement of claim initialled by me, dated by me and placed with the papers.

13 I vacate the hearing of this matter and stand the matter over before the Registrar at 9.30 am on Friday 8 December 2006. I order the plaintiff to pay the defendant's costs thrown away by the adjournment.

14 The submission was made that I should reserve costs in order that it could be ascertained whether or not there was a need for MBF to adduce further evidence, or to change the manner in which it might conduct its defence. It seemed to me, however, that the reason for the adjournment was directly attributable to the late application to amend and, in those circumstances, it was appropriate for me to follow the usual course which I did in making the above order.

15 I declined to make an order that costs be payable forthwith upon assessment or agreement. It seemed to me that while the factual issues surrounding this matter were in small compass, the legal characterisation of them was a difficult one and, in those circumstances, it was understandable that a late application was made to re-define the legal consequences of some aspects of the factual issues.

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