Michael Thomson v Hugh Williamson
[2011] NSWSC 1630
•01 December 2011
Supreme Court
New South Wales
Medium Neutral Citation: Michael Thomson & Anor v Hugh Williamson & Ors [2011] NSWSC 1630 Hearing dates: Thursday, 1 December 2011 Decision date: 01 December 2011 Jurisdiction: Equity Division Before: Brereton J Decision: Decline to strike out paragraph of defendants' defence.
Catchwords: PRACTICE AND PROCEDURE - Plaintiffs apply to strike out paragraphs of defendants' defence - paragraphs not consequential to amendments to statement of claim and raise new matters - whether leave ought be granted to raise such matters - paragraph contains seriously arguable defence - no reason identified why not raised earlier - balance of prejudice - interests of justice favour defence pleaded being maintained. Legislation Cited: (NSW) Civil Procedure Act 2005, s 56
(NSW) Professional Standards Act 1994, s 33
(Cth) Trade Practices Act 1974, s 51ACCases Cited: Strata Plan 61287 & Anor v Brookfield Multiplex Limited & Ors [2011] NSWSC 1302 Category: Procedural and other rulings Parties: Michael Thomson (first plaintiff)
Bengoal Pty Limited (second plaintiff)
Hugh Williamson (first defendant)
Williamson Solicitors Pty Limited (second defendant)
Hugh Williamson and Russell Stuart Debney trading as Debney Williamson Lawyers (ABN 91 380 683 157) (third defendant)Representation: Counsel:
A J McInerney (plaintiffs)
A Mathas (solicitor - defendants)
Solicitors:
Garland Hawthorn Brahe Solicitors (plaintiffs)
Norton Rose Australia (defendants)
File Number(s): 2009/290875
Judgment (ex tempore)
HIS HONOUR: These proceedings are set down for hearing for two weeks commencing 30 January 2012. The parties have agreed on pre-trial directions as set out in the document entitled "Orders/Directions" initialled by me dated this day and placed with the papers. Accordingly, by consent, I make orders and directions in accordance with that document.
That leaves outstanding the plaintiffs' application to have paragraph 95(e) of the defence to the second further amended statement of claim struck out. That paragraph relevantly pleads as follows:
(e) the defendants say that any liability they may have to the plaintiffs (which liability is denied) is limited by operation of the Solicitors Scheme approved under the Professional Standards Act 1994 (NSW).
The plaintiffs filed their second further amended statement of claim on 6 September 2011, Bergin CJ in Eq having on 5 September 2011 fixed the matter for hearing as indicated and having made the usual order for hearing. The defendants filed their defence to the second further amended statement of claim on 28 September 2011. A number of paragraphs in it, including in particular paragraph 95(e), raised new matters which were not consequential on the amendments made in the second further amended statement of claim. The leave that an opponent automatically has to file a defence to an amended pleading did not extend to authorise those additional amendments, which ought to be regarded as having been made without leave. In those circumstances, on the present application, it is really for the defendants to satisfy the court that they should have leave to raise the matter to which the plaintiffs take objection, and I proceed on that basis.
Paragraph 95(e), to which I have referred, pleads that any liability that the defendants, who are or were solicitors, may have to the plaintiffs, is limited by operation of the Solicitors' Scheme approved under the (NSW) Professional Standards Act 1994. On 29 September 2011 the plaintiffs' solicitors sought further and better particulars of the defence to the second further amended statement of claim, in particular paragraph 95(e). The defendants' solicitor's response of 20 October 2011 asserted that by operation of the Solicitors Limitation of Liability Scheme and the Professional Standards Act their liability, if any, was limited to $1.5 million. By letter of 2 November 2011, the plaintiffs' solicitors took objection to the raising of the paragraph 95(e) defence. The defendants responded that that defence was pressed, and as I have indicated it is really a matter for the defendants to establish that they should have leave to rely on it.
As to that, first, it seems clear enough that paragraph 95(e) contains what is a seriously arguable defence. That is not to say that there might not be good reasons why ultimately the defence is found not to be available, but it is plainly sufficiently arguable that is viability presents no reason not to allow it to be raised.
Secondly, there is no real explanation on behalf of the defendants as to why the defence was not raised earlier. This is a matter of some significance and as to the exercise of the discretion, counts against granting leave and in favour of striking out the paragraph.
Thirdly, so far as prejudice is concerned, the plaintiffs point to some difficulties and inconvenience involved in meeting the defence in time for a trial commencing at the beginning of the 2012 law term. While I do not underestimate the difficulties and time constraints, it does seem to me that meeting the defence will essentially involve either characterising facts and causes of action that will, in any event, be advanced by the plaintiffs in a certain way, so as to fall within some of the exceptions contained in the Professional Standards Act, or producing evidence in the plaintiffs' possession to prove non-compliance with particular provisions of the Act, for example, s 33. I am unconvinced that the evidence goes so far as to establish that the plaintiffs will not be able to do this in time to meet the hearing. Thus while there is some prejudice, I am unpersuaded that it is irremediable.
Fourthly, to strike out the defence would have the effect of depriving the defendants of what appears to be a reasonably arguable defence and which may have very substantial substantive impact on the extent of their liability in the proceedings.
I have given some thought as to whether it might be possible, if necessary, to defer the determination of the paragraph 95(e) defence until after the resolution of the other matters in the proceedings. So far as it will be necessary to determine whether the proceedings fall within one of the exceptions in the Act, that does not seem to me to be a possible course; but if certain issues specific only to that defence arise, consideration could be given to asking the trial judge to defer dealing with those aspects, if necessary, until a later stage.
As I observed recently in Strata Plan 61287 & Anor v Brookfield Multiplex Limited & Ors [2011] NSWSC 1302, the instruction contained in (NSW) Civil Procedure Act 2005 , 56 that when a court exercises power under that Act or the (NSW) Uniform Civil Procedure Rules 2005, it must seek to facilitate the just, quick and cheap resolution of the proceedings, places primacy on the just resolution of proceedings. On balance, despite the unsatisfactorily late stage at which this defence has been raised, I think the interests of justice favour permitting the defence pleaded in paragraph 95(2) to continued to be maintained.
As the necessity for the argument today was substantially occasioned by the necessity for the defendants to justify retaining the paragraph 95(e) defence, when they required leave to do so, it seems to me that the defendants should pay the plaintiffs' cost of today.
Accordingly, I decline to strike out paragraph 95(e) of the defence to the second further amended statement of claim.
I make the following orders:
1. Grant leave to the plaintiff to further amend their statement of claim to plead a claim under (Cth) Trade Practices Act 1974, s 51AC. Any such further amended statement of claim to be filed by 22 December 2011.
2. Grant leave to the plaintiffs to file a reply by 15 December 2011.
3. Reserve liberty to the parties to apply by arrangement with my Associate in the event of any difficulty arising in preparation
of the matter for hearing.
4. Defendants to pay plaintiffs costs of today.
6. Direct that the defendants serve any documentary evidence on which they propose to rely in connection with the paragraph 95(e) defence by 15 December 2011.
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Decision last updated: 18 January 2012
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