Newbase Nominees Pty Ltd v Ola Medical Pty Ltd
[2024] FedCFamC2G 1264
•22 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Newbase Nominees Pty Ltd v Ola Medical Pty Ltd [2024] FedCFamC2G 1264
File number: PEG 97 of 2023 Judgment of: JUDGE LADHAMS Date of judgment: 22 November 2024 Catchwords: PRACTICE AND PROCEDURE – Application for leave to amend a statement of claim – application granted. Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 Australian Consumer Law s 18
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190
Federal Court Rules 2011 (Cth) r 16.53
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 1.06
Cases cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [2009] WASC 299
Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41
Bhalla v Woolworths Group Pty Ltd [2024] FedCFamC2G 652
Caason Investments Pty Ltd v Cao (2015) 236 FCR 322; [2015] FCAFC 94
Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261; [2010] FCAFC 101
Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamara Resources Limited (in liq) [2015] FCA 1098
Division: Division 2 General Federal Law Number of paragraphs: 43 Date of hearing: 8 November 2024 Place: Perth Counsel for the Applicant: Mr A Rumsley Solicitor for the Applicant: Western Legal Counsel for the Respondents: Ms P Honey Solicitor for the Respondents: Panetta McGrath Lawyers ORDERS
PEG 97 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: NEWBASE NOMINEES PTY LTD (ACN 086 355 722)
Applicant
AND: OLA MEDICAL PTY LTD (ACN 636 402 250)
First Respondent
OLA ABDELMAKSOUD ABDELRASHID ABDELMAKSOUD
Second Respondent
ORDER MADE BY:
JUDGE LADHAMS
DATE OF ORDER:
22 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The applicant has leave to further amend its statement of claim in the terms of the Re-Amended Statement of Claim dated 16 October 2024.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE LADHAMS:
INTRODUCTION
The application presently before the Court is an application in a proceeding by which the applicant, Newbase Nominees Pty Ltd (Newbase Nominees) seeks leave to file a Re-Amended Statement of Claim dated 16 October 2024. The respondents oppose the application in a proceeding.
THE PROPOSED AMENDMENTS IN THE RE-AMENDED STATEMENT OF CLAIM
To properly understand the context of the application in a proceeding, it is first necessary to summarise aspects of the claim set out in the existing pleading, which is an Amended Statement of Claim filed on 26 February 2024. The causes of action set out in the Amended Statement of Claim are based in consumer protection and contract law. The Amended Statement of Claim alleges that:
(a)Pursuant to a written agreement dated 20 September 2017 (2017 Contract), Newbase Nominees engaged the second respondent, Dr Abdelmaksoud, to provide medical services at Kwinana Medical Centre for a period of four years commencing on the date Dr Abdelmaksoud became entitled to an Australian registered medical practitioner number.
(b)Dr Abdelmaksoud was granted an Australian registered medical practitioner number on or about 19 February 2019 and she provided medical services under the 2017 Contract from 6 March 2019.
(c)On 24 September 2019 Dr Abdelmaksoud incorporated the first respondent, Ola Medical Pty Ltd (Ola Medical) and on 16 August 2021 Newbase Nominees and Ola Medical executed a new agreement (2021 Contract) for Ola Medical, through Dr Abdelmaksoud or another suitably qualified medical practitioner, to provide medical services at Kwinana Medical Centre for a period of four years.
(d)Dr Abdelmaksoud and Ola Medical provided medical services pursuant to the 2021 Contract during the period from 16 August 2021 to 6 December 2021 but the number of hours of medical services provided was fewer than the number of hours required by the 2021 Contract, and no medical services have been provided by Ola Medical, either by Dr Abdelmaksoud or another suitably qualified practitioner, since 6 December 2021.
(e)The respondents made representations prior to the execution of the 2021 Contract that were misleading or deceptive or likely to mislead or deceive, in contravention of s 18 of the Australian Consumer Law, set out in Sch 2 of the Competition and Consumer Act 2010 (Cth).
(f)Ola Medical breached the 2021 Contract.
The main effect of the proposed amendments as set out in the Re-Amended Statement of Claim is to include an additional claim that Dr Abdelmaksoud breached the 2017 Contract.
RELEVANT PRINCIPLES RELATING TO THE AMENDMENT OF PLEADINGS
The applicant requires leave to file the Re-Amended Statement of Claim, pursuant to r 16.53 of the Federal Court Rules 2011 (Cth) (Federal Court Rules), which applies to this proceeding as a result of r 1.06(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth): see also, Bhalla v Woolworths Group Pty Ltd [2024] FedCFamC2G 652. The applicant is permitted to apply for leave to amend a pleading including adding a new claim for relief, or a new foundation in law for a claim for relief that arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief: r 16.53(2) of the Federal Court Rules.
In deciding whether to grant leave to the applicant to further amend its statement of claim, the Court should have regard to case management principles, including the overarching purpose of the Court’s civil procedure and practice provisions, as set out in s 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), which relevantly provides:
(1)The overarching purpose of the civil practice and procedure provisions, in relation to the Federal Circuit and Family Court of Australia (Division 2), is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
(a)the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
The Court is also mindful of cases addressing case management principles such as Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (Aon Risk), the principles of which were summarised in Tamaya Resources Limited (in liq) v Deloitte Touche Tohmatsu (A Firm), in the matter of Tamara Resources Limited (in liq) [2015] FCA 1098, where Gleeson J said at [127]:
The principles articulated by the High Court in Aon apply to matters in this Court: Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 (“Cement Australia”) at [43]. Relevant matters the Court is to consider include:
(1)The nature and importance of the amendment to the party applying for it: Aon at [102];
(2)The extent of the delay and the costs associated with the amendment: Aon at [102];
(3)The prejudice that might be assumed to follow from the amendment, and that which is shown: Aon at [5], [100] and [102];
(4)The explanation for any delay in applying for that leave: Aon at [108]; and
(5)The parties’ choices to date in the litigation and the consequences of those choices: Aon at [112] and Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 (“Luck”) at [44];
(6)The detriment to other litigants in the Court: Aon at [93], [95] and [114] and Luck at [44]; and
(7)Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification: Aon at [5], [24] and [30].
In Caason Investments Pty Ltd v Cao (2015) 236 FCR 322; [2015] FCAFC 94, Gilmour and Foster JJ said at [19]-[21] (emphasis added):
19.The power of the Court to grant or refuse leave must be exercised in the 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: s 37M(3) of the FCA Act and the Federal Court Rules 2011 (Cth) (FCR): Bowen Energy Ltd v 2KD Drilling Pty Ltd [2012] FCA 275 at [8], Australian Competition and Consumer Commission v Jutsen (No 2) [2010] FCA 982 at [12]-[13]; Suzlon Energy Ltd v Bangad (2011) 196 FCR 259 at [19]; University of Sydney v ResMed Ltd (No 5) [2012] FCA 232 at [14]. The applicants submit that by refusing to allow the Rejected Amendments, the primary judge mistook the task that she had to perform under rr 8.21 and 16.51 of the FCR.
20.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 and to avoid a multiplicity of proceedings: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [14] (citing Dwyer v O’Mullen (1887) 13 VLR 933 at 939-40) and [71]. 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 v Frog (1974) 48 ALJR 481 at 482; 4 ALR 615 at 618, citing Cropper v Smith (1884) 26 Ch D 700 at 710-711.
21.Leave to amend should be granted unless the proposed amendment is futile, such that the issue sought to be added is unlikely to succeed, the amendment is likely to be struck out or would cause substantial prejudice or injustice to the opposing party in a way that cannot be compensated by costs: Research in Motion Ltd v Samsung Electronics Australia Pty Ltd (2009) 176 FCR 66 AT [21]-[22]; Ron Medich Properties Pty Ltd v Bentley-Smythe Pty Ltd [2010] FCA 494 at [8]. Rule 16.21 of the FCR identifies the grounds on which pleadings may be stuck out.
THE EVIDENCE AND SUBMISSIONS OF THE PARTIES
Evidence before the Court
The only evidence before the Court for the purposes of the application in a proceeding was a copy of the 2017 Contract, which was marked as Exhibit 1, and a copy of the 2021 Contract, which was marked as Exhibit 2. The Court also had before it the Amended Statement of Claim and the proposed Re-Amended Statement of Claim, as well as the application in a proceeding and the submissions of both parties.
Newbase Nominees’ submissions
Newbase Nominees’ submissions focused on one of the substantive issues that would arise if the Court allows the amendments.
Newbase Nominees submitted that the 2017 Contract and the 2021 Contract both have effect as contracts between different parties, but even if the parties were the same, there could be two contracts between the same parties. In advancing this submission, Newbase Nominees relied on Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41 (Manasseh).
In Manasseh, McLure J said at [21]:
A binding and enforceable agreement to vary an existing agreement can alter the existing agreement without affecting its existence or, alternatively, it can terminate and replace the existing contract. Whether or not a variation involves the termination and replacement of the existing contract depends on the objectively determined intention of the parties: Federal Commissioner of Taxation v Sara Lee Household and Body Care (Australia) Ltd[2000] HCA 35; (2000) 201 CLR 520; Dan v Barclays Australia Ltd (1983) 57 ALJR 442, 448 - 449.
Also in Manesseh, Buss JA said at [78]-[82]:
78.The relevant principles to be applied in determining whether an agreement made by the parties to an existing contract varies the existing contract or terminates and replaces the existing contract are well established.
79.In Federal Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520, Gleeson CJ, Gaudron, McHugh and Hayne JJ said:
When the parties to an existing contract enter into a further contract by which they vary the original contract, then, by hypothesis, they have made two contracts. For one reason or another, it may be material to determine whether the effect of the second contract is to bring an end to the first contract and replace it with the second, or whether the effect is to leave the first contract standing, subject to the alteration. For example, something may turn upon the place, or the time, or the form, of the contract, and it may therefore be necessary to decide whether the original contract subsists [22].
See also Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 [19] (Gleeson CJ, Gaudron & Gummow JJ).
80.In Sara Lee and Concut reference was made to Tallerman & Co Pty Ltd v Nathan's Merchandise (Vic) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93.
81.In Tallerman, Taylor J accepted that where the parties to an existing contract enter into another contract:
(a)the earlier contract might be rescinded altogether, the determining factor being the intention of the parties disclosed by the later agreement;
(b)partial rescission is a variation, not the destruction, of the contractual relationship between the parties; and
(c) the earlier contract may be varied by way of:
(i)partial rescission with or without the substitution of new terms for those rescinded; and
(ii) the addition of new terms with or without any partial rescission at all (144).
See also Concut [19].
82.In Tallerman, Kitto J accepted in essence the propositions set out at [81] (a) and (b), and added that while, ‘in strict logic’ a variation may be a new contract, ‘the discharge of an old contract is a matter of intention’ (135). See also Concut [19].
Newbase Nominees submitted that the 2017 Contract is common cause between the parties, the amendments raise the issue of the construction of the 2017 Contract objectively determined by the intention of the parties to the 2017 Contract in the context of the subsequent contract between different parties.
Newbase Nominees submitted that the amendment should be allowed with the respondents given an opportunity to plead a defence and file any further evidence upon which they seek to rely.
In his oral submissions, Counsel for Newbase Nominees submitted that Newbase Nominees has an arguable case that the 2017 Contract had not been terminated because of cl 18 which provides that:
This agreement may only be altered in writing signed by each party.
Counsel for Newbase Nominees noted that the 2021 Contract was between different parties to the 2017 Contract. Counsel for Newbase Nominees submitted that the obligations under the 2017 Contract and 2021 Contract could be satisfied concurrently and acknowledged that Newbase Nominees would be unable to recover damages from breach of the 2017 Contract if the work had been performed by another person under the 2021 Contract.
Counsel for Newbase Nominees submitted that Aon Risk does not stand for any proposition that you cannot amend pleadings unless you do so early on in the proceedings, but rather suggests that the closer you get to the date listed for trial, the higher level of scrutiny that should be applied in determining whether or not the amendments should be allowed. Counsel for Newbase Nominees also submitted that the proposed amendments relate to facts that are effectively common facts between the parties and that there is an argument in relation to legal principles in respect of what happens in relation to a prior agreement when a subsequent agreement, although between different parties, comes into play. Counsel for Newbase Nominees also submitted that there is no evidence of specific prejudice before the Court and trial dates have not yet been set in this matter.
In his reply submissions, Counsel for Newbase Nominees submitted that there was no obligation to provide an explanation, citing Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [2009] WASC 299 (Attorney-General of Botswana).
The respondents’ submissions
The respondents submitted that the application in a proceeding should be dismissed because the proposed amendments are futile and, if they had appeared in the original pleading, would have been liable to be struck out.
The respondents submitted that the proposed amendments are futile or are liable to be struck out for not disclosing a reasonable cause of action. The scope of the medical services to be provided under both the 2017 Contract and the 2021 Contract were the same and under both contracts the doctor providing the medical services was Dr Abdelmakoud. The respondents submitted that it cannot be the case that there was some obligation upon Dr Abdelmakoud to continue to provide services under the 2017 Contract, being at least 38 hours per week, and under the 2021 Contract, being at least 38 hours per week. The respondents submitted that the 2021 Contract contains the entire contractual arrangement between the parties, as evidence from its terms and an ‘entire agreement’ clause. The two contracts between different parties relate to the same services, provide different remuneration and impose different obligations. The respondents submitted that it is clear the parties intended to rescind their old contractual relationship and replace it with a new one. The contracts cannot operate concurrently.
The respondents further submitted that the proposed amendments are liable to be struck out as embarrassing because the facts that gave rise to the misleading and deceptive conduct claim are inconsistent with the proposed claim for the breach of the 2017 Contract. As the basis for its misleading or deceptive conduct claim, Newbase Nominees pleads that Dr Abdelmaksoud represented to Newbase Nominees that she would provide medical services that she was providing under the 2017 Contract through a medical corporation under the 2021 Contract, Newbase Nominees entered into the 2021 Contract in reliance on that representation, and if not for the representation, Newbase Nominees would have required Dr Abdelmaksoud to continue to provide services under the 2017 Contract. The respondents submitted that the misleading or deceptive conduct claim is based upon the 2017 Contract having come to an end and having been replaced by the 2021 Contract, however, the breach of the 2017 Contract requires the 2017 Contract to be on foot, and only one of those can be true. The respondents submitted that a party must not plead inconsistent allegations of fact or inconsistent claims except as alternatives and a party is prohibited from pleading an inconsistent set of facts in the alternative where one of those sets of facts must be known to be false. A pleading that contains inconsistent allegations is embarrassing and liable to be struck out and therefore the new plea should not be allowed.
The respondents submitted that the Court should otherwise exercise its discretion to refuse the application in circumstances where Newbase Nominees has a duty to prosecute the proceeding diligently and has had a sufficient opportunity to plead its case. The amendments are based on information which has been within Newbase Nominees’ knowledge since the commencement of the proceedings and no explanation or justification has been given as to why the amendments are now being sought.
In her oral submissions, Counsel for the respondents highlighted some of the similarities and differences between the 2017 Contract and the 2021 Contract and submitted that it is plain from the subject matter of, and the express terms of, the 2021 Contract that the parties intended for that contract to replace the prior contractual arrangement between the parties. Counsel for the respondents also submitted that this position was consistent with Newbase Nominees’ pleaded misleading or deceptive conduct case, including that there was detrimental reliance on representations by entering into the 2021 Contract and abandoning the 2017 Contract.
Counsel for the respondents submitted that it is not apparent the basis upon which Newbase Nominees contends the 2017 Contract has continuing force or effect and there are only two real possibilities:
(a)The first is that the 2021 Contract was between separate parties and therefore had no consequence upon the 2017 Contract and the two contracts operate separately and in parallel with each other. Counsel for the respondents submitted that this cannot be the case because the two contracts related to the same services to be provided by the same person albeit in the 2021 Contract they were to be provided through a corporate vehicle, Ola Medical. Having regard to the terms and conditions of the contracts, Counsel for the respondents submitted that the 2021 Contract replaced the 2017 Contract and brought it to an end.
(b)The second is that the 2021 Contract somehow varied and collaterally accompanies the 2017 Contract without affecting its existence and the obligations imposed upon Dr Abelmaksoud to provide those services also continue under the 2017 Contract. Counsel for the respondents submitted that this could not be the case because the two contracts are between different parties. Counsel for the respondents submitted that the authorities referred to in Newbase Nominees’ submissions relate to subsequent agreements between the same parties and are not applicable in this case given that there are different parties to the second contract. In any event, whether a new contract replaces an existing contract depends on the objectively determined intention of the parties disclosed by the later agreement, and it was plainly the intention of the parties to replace the 2017 Contract with the 2021 Contract. Counsel for the respondents also submitted that any continuing obligation under the 2017 Contract upon Dr Abdelmaksoud to provide those services in a personal capacity would be inconsistent with the terms of the 2021 Contract.
Counsel for the respondents referred to the proposed paragraph 23 of the Re-Amended Statement of Claim which says:
Further and in the alternative by engaging in the conduct pleaded in paragraphs 15 to 17A above, Dr Ola acted in breach of the 2017 Contract.
Counsel for the respondents submitted that it is unclear whether the phrase ‘further and in the alternative’ relates to the misleading and deceptive conduct claim or the breach of the 2021 Contract claim or to a finding of particular facts. Further, Newbase Nominees would also need to plead the basis on which it contends the 2017 Contract continues in force or effect after the 2021 Contract came into force and who it is said is bound by that contract and how those obligations arise in order to give rise to a breach. That is not clear from the amendments as advanced.
Counsel for the respondents noted that no explanation had been provided, or any evidence put on to give an explanation for why the proposed amendments have only been advanced now and not earlier. Counsel for the respondents also submitted that if the amendment is allowed it is going to bring into factual circumstances around negotiation of the 2021 Contract and not simply legal argument that ought to be allowed through and resolved at trial.
CONSIDERATION OF THE APPLICATION IN A PROCEEDING
Having considered the proposed amendments as outlined in the Re-Amended Statement of Claim, the relevant principles and the submissions advanced by both parties, I am satisfied that it is appropriate to allow Newbase Nominees to amend its statement of claim in the terms of the Re-Amended Statement of Claim.
I do not consider that case management principles require the Court to refuse the proposed amendments and I make the following observations about the case management principles in the present case:
(a)The application for leave to amend the statement of claim is brought at an advanced stage of the proceeding, but not so late in the proceeding that the delay in seeking to amend the statement of claim weighs significantly against the grant of leave. The original statement of claim was filed on 12 June 2023, the Amended Statement of Claim was filed on 26 February 2024 and the respondents filed a Defence on 16 May 2024. The parties have filed evidence in relation to the substantive application, but submissions have not yet been filed in relation to the substantive application and the matter has not yet been listed for final hearing. There may be some delay in listing this matter for hearing as a result of allowing the amendments, as the respondents will need to be granted an opportunity to file an amended defence and further evidence should they wish to do so. However, any further delay is likely to be relatively short and there is no evidence that a short delay in listing this matter for final hearing would be prejudicial to either party.
(b)The 2017 Contract is already referred to in the existing pleadings and evidence. The effect of the proposed amendments is to plead a new cause of action, namely, breach of the 2017 Contract, arising substantially from facts that are already pleaded. The respondents have not advanced evidence that they will face any significant prejudice as a result of the proposed amendments, although Counsel for the respondents did suggest that the respondents may need to advance further evidence. I am not satisfied that the respondents would face any significant prejudice that could not be addressed with an appropriate costs order.
(c)There is no reason to consider that allowing the amendments will have any material impact on the efficient use of the Court’s judicial and administrative resources, the efficient disposal of the Court’s overall caseload or the disposal of all proceedings before the Court in a timely manner. There is therefore no reason to believe that other litigants before the Court, not party to this proceeding, will be disadvantaged as a result of allowing the proposed amendments.
The absence of any explanation for the delay in seeking to make the proposed amendments is troubling. I do not consider that Attorney-General of Botswana assists Newbase Nominees in this regard. That case relates to a late application for security for costs, which was refused, and is not directly relevant to the issues presently before the Court.
There are two authorities referred to by the parties in their submissions that are relevant to whether an explanation for the delay is required. In Aon Risk, Gummow, Hayne, Crennan, Kiefel and Bell JJ said at [103]:
Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, and explanation will be called for.
Their Honours proceeded to find that an explanation was required in that case, where the amendments were sought very late in the proceeding.
In Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261; [2010] FCAFC 101 (Cement Australia), there was no evidence filed to explain the delay but the trial judge accepted the explanation given by Counsel, which appears to be that there was an error of judgement in preparing the earlier pleading, and on appeal no fault was found with this finding: see Cement Australia at [46]-[56].
That no explanation at all has been offered in the present case, either by way of affidavit or by Counsel, weighs against the grant of leave to amend the statement of claim. The failure to offer an explanation is also discourteous to the respondents and to the Court. However, the failure to offer an explanation is not the only factor for me to consider and needs to be considered in conjunction with the other matters to which I have already referred.
I now turn to consider whether leave to further amend the statement of claim should be refused on the basis that the proposed amendments are liable to be struck out as futile or embarrassing.
The proposed amendments raise a claim that is at least arguable. Based on the way that the parties have argued the case on the application in a proceeding, it appears that if the amendments are allowed, a question may arise for the Court’s determination as to the effect of the 2021 Contract between Newbase Nominees and Ola Medical on the 2017 Contract between Newbase Nominees and Dr Abdelmaksoud, including whether the 2021 Contract could have the effect of terminating the 2017 Contract and, if so, whether that was the intention of the parties. That is potentially a complex question and it is not in the interests of the administration of justice to determine that issue at a preliminary stage of this proceeding without having heard evidence. It is sufficient for present purposes that the claim proposed to be advanced by Newbase Nominees is reasonably arguable. If the 2017 Contract continued to have force and effect beyond the execution of the 2021 Contract, then the allegation that the 2017 Contract was breached by Dr Abdelmaksoud is also reasonably arguable. I do not accept that the proposed amendments would be liable to be struck out as disclosing no reasonably arguable cause of action.
While the proposed pleading is not perfect, I do not consider that it is embarrassing, as submitted by the respondents, such that it would be liable to be struck out. As I understand the respondents’ concerns, the alleged embarrassment arises from two issues. First, the lack of clarity in relation to the meaning of the words ‘further or in the alternative’ and, second, in relation to perceived inconsistencies between Newbase Nominees asserting that the 2017 Contract remains on foot and in asserting that Newbase Nominees relied on representations to its detriment in entering the 2021 Contract rather than continuing to require Dr Abdelmaksoud to perform services under the 2017 Contract.
I do not consider that the words ‘further or in the alternative’ are sufficiently vague as to justify refusing leave to amend, particularly in circumstances where there are only two other causes of action that could potentially be seen as the alternatives, namely breach of the 2021 Contract and misleading and deceptive conduct, and the words ‘further or in the alternative’ can readily be understood as referring to both of the existing causes of action.
In relation to the perceived inconsistency in pleaded facts, while I can understand why that is said to be an inconsistency based on the respondents’ view of the effect of the 2021 Contract on the 2017 Contract, I can also see that it may not necessarily be an inconsistency if the position of Newbase Nominees in relation to the two contracts is accepted. It would not be appropriate to refuse to grant leave on the basis of this potential inconsistency.
I do not consider that the failure to plead the basis on which the 2017 Contract continues to have effect requires that leave to further amend the statement of claim be refused. As I understand the submissions advanced by the parties, this will largely be a question of law, rather than a question of fact.
Taking into account all of the matters referred to above, on balance, I am persuaded that it is appropriate to exercise my discretion to allow Newbase Nominees to further amend its statement of claim.
CONCLUSION
Leave is granted to Newbase Nominees to amend its statement of claim in the terms of the Re-Amended Statement of Claim dated 16 October 2024.
I will hear further from the parties about any appropriate costs order and any further directions that should be made to progress this matter to hearing.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Ladhams. Associate:
Dated: 22 November 2024
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