O'Malley Nominees Pty Ltd v Shawtec Pty Ltd - [2009] WADC 171

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: O'MALLEY NOMINEES PTY LTD -v- SHAWTEC PTY LTD & ORS [2009] WADC 171

CORAM: PRINCIPAL REGISTRAR GETHING

HEARD: 15 OCTOBER & 2 NOVEMBER 2009

DELIVERED : 11 NOVEMBER 2009

FILE NO/S: CIV 1163 of 2004

BETWEEN: O'MALLEY NOMINEES PTY LTD (ACN 008 782 821)
Plaintiff
AND
SHAWTEC PTY LTD (ACN 070 514 966)
First Defendant
MICHAEL JOHN SHAW
LAURENCE DAVID SHAW
Second Defendants

Catchwords:

Practice and procedure - Leave to amend writ and statement of claim - Allowed in part on discretionary grounds

Legislation:

Nil

Result:

Application allowed in part

Representation:

Counsel:

Plaintiff:     Mr A J N Aristei
First Defendant             :     Mr A R MacPherson
Second Defendants       :     Mr A R MacPherson

Solicitors:

Plaintiff:     Vogt Graham Lawyers
First Defendant             :     Hotchkin Hanly
Second Defendants       :     Hotchkin Hanly

Case(s) referred to in judgment(s):

ABB Service Pty Ltd (formerly known as ABB Engineering Construction Pty Ltd) v Hetherington [2001] WASCA 235
Agius v New South Wales [2001] NSWCA 371
Aon Risk Services Australia Ltd v Australian National University (2009) 258 ALR 14
Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301
Baldry v Jackson [1976] 2 NSWLR 415
Barclay Mowlem Construction Ltd v Dampier Port Authority & Anor (2006) 33 WAR 82
Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No5) (1997) 18 WAR 334
Commonwealth v Verwayen (1990) 170 CLR 394
Cropper v Smith (1884) 26 Ch D 700
Day v William Hill (Park Lane) Ltd [1949] 1 KB 632
Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431
Eshelby v Federated European Bank Ltd [1932] 1 KB 254, at 259-263
Frank Jasper Pty Ltd & Anor v Deloitte Touche Tohmatsu (A Firm) [2006] WASC 24
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Hooker Corporation v Commonwealth (1986) 65 ACTR 32
Hughes v St Barbara Mines Ltd [No 3] [2008] WASC 220
Kimberley Downs Pty Ltd v Western Australia, unreported; SCt WA; Library No 6414
Macmahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271
Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd [1992] 1 Qd R 91
May v Thomas [2008] WASCA 215
Morgan v Banning (1999) 20 WAR 474
Neilson & Anor v City of Swan [2006] WASCA 94
O'Malley Nominees Pty Ltd v Shawtec Pty Ltd & Ors [2007] WADC 88
O'Malley Nominees Pty Ltd v Shawtec Pty Ltd & Ors [2008] WADC 115
Permanent Mortgages Pty Ltd v Vandenbergh [2009] WASCA 156
Pollard v Endale Pty Ltd [2009] WASCA 189
Renowden v McMullin (1970) 123 CLR 584
Servcorp (Aust) Pty Ltd v Abgarus Pty Ltd (1995) 38 NSWLR 281
Sinclair v James [1894] 3 Ch 554
Sneade v Wotherton Barytes & Lead Mining Co Ltd [1904] 1 KB 295
Southern Wine Corporation Pty Ltd (In Liq) v Frankland River Olive Co Ltd & Anor [2005] WASCA 236
Staley v Pivot Group Pty Ltd [2009] WASC 204
State of Queensland v J L Holdings (1997) 189 CLR 146
Stone James (a firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Tristram v Hyundai Automotive Distributors Australia Pty Ltd & Anor [2005] WASCA 168
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514
Water Authority v AIL Holdings (1992) 10 WAR 233
Wigan v Edwards (1973) 47 ALJR 586
Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290
Youlden Enterprises Pty Ltd v Heath Solutions (WA) Pty Ltd & Ors (2006) 33 WAR 1

PRINCIPAL REGISTRAR GETHING: By application dated 13 May 2009 the plaintiff seeks to make significant amendments to its statement of claim. At an early stage in the application, the defendants took the point that the amendments went beyond the scope of the indorsement to the writ of summons. The plaintiff responded with a further application, dated 11 August 2009, seeking leave to amend the writ.
In support of its applications, the plaintiff filed an affidavit of one of its directors, John Goldthorp, sworn 3 September 2009. In opposition to the applications, the defendants filed an affidavit by the first‑named second defendant, Michael John Shaw, sworn 10 August 2009.

History of the action

In opposition to the application, the defendants place some weight on the delays in bringing the application. In this context it is appropriate that I review the history of the action in some detail.
The action was commenced by writ of summons filed 24 March 2003 in the Supreme Court. The indorsement sets out a claim for possession of certain premises in Osborne Park as a result of a breach by the first defendant of the covenant to pay outgoings. A number of status conferences were held in the Supreme Court without any substantial progress being made.
By chamber summons dated 13 November 2003, the plaintiff sought to have the action remitted to the District Court. The defendant's then solicitor, Conal O'Toole, swore an affidavit dated 13 November 2003 in support of the application in which he stated, among other things:
"4.The Writ herein was served on 24 March 2003 seeking possession of premises located at 24 Guthrie Street, Osborne Park (the Leased Premises) pursuant to notices of re‑entry served on the 4^th day of March 2003.
5.The First Defendant refused to vacate the leased premises and despite services of the Writ remained in possession until 30 June 2003.
6.The Writ being a writ of possession was thereby rendered nugatory save for the claim for payment with outgoings amounting to $22,922.33 which remained outstanding. These claims are disputed by the Defendants.
7.I have been instructed by Mr John Stewart Goldthorp, one of the directors of O'Malley Nominees Pty Ltd that he anticipates there will be a claim for damages for breaches of the Defendants' obligations under the lease that amount to approximately $50,000. The final amount of the claim is not yet available."
On 21 November 2003 the plaintiff's chamber summons came on for hearing before Justice Anderson. An order was made by consent to remitting the action to the District Court pursuant to District Court of Western Australia Act 1969 (WA) ("DCA") s 73(1)(a).
On 13 April 2004 the plaintiff changed solicitors to Bruce Havilah & Associates ("BHA").
The first mention in the District Court was in a Registrar's directions hearing on 2 June 2004. No statement of claim had been filed by that stage. The close of pleadings milestone was extended on a number of occasions at subsequent directions hearings. On 18 November 2004, the Court made orders in terms of a minute signed by the parties. The operative part of the order was a springing order against the plaintiff unless it filed its statement of claim by 9 December 2004.
The statement of claim was filed on 13 December 2004, the Court having extended the time limit in the springing order at a directions hearing on 22 December 2004. The statement of claim pleaded breaches of covenants to pay rent and outgoings. It also pleaded breaches of other covenants, including the covenant to yield up premises at the expiration of the lease in good order. The total amount of damages claimed appear on the face of the claim to be in the order of $70,000.
By notice of appeal dated 22 December 2004, the defendants appealed from the decision of the Registrar on 22 December 2004 extending the time within which the plaintiff had to file its statement of claim to 13 December 2004. This appeal was discontinued at the first mention on 12 January 2005.
At directions hearings on 28 February 2005 and 18 April 2005 the close of pleadings milestone was extended. At a directions hearing on 24 May 2005, I ordered the defendants to file and serve their defence and counterclaim by 3 June 2005. The defence, set off and counterclaim was filed on 7 June 2005.
By chamber summons filed 25 October 2005 the plaintiff sought answers to its request for further and better particulars of the defence and counterclaim, as well as to strike out the defence and counterclaim. That application was ultimately determined on 3 February 2006. Parts of the defence and counterclaim were struck out with the defendants having leave to file and serve an amended pleading.
No amended pleading was filed in accordance with this leave. By chamber summons dated 8 May 2006 the plaintiff sought a springing order to compel the defendants to file an amended pleading. This application was adjourned sine die when it came on for hearing on 25 May 2006.
By application dated 31 October 2006 the defendants applied for leave to amend their defence and counterclaim. There was detailed conferral about the application as set out in affidavits filed by the parties. This conferral was also protracted and ultimately more than 10 appearances were required to determine the application. Registrar Kingsley heard the application substantively on 19 April 2007 and gave reasons for decision on 30 May 2007, reported as O'Malley Nominees Pty Ltd v Shawtec Pty Ltd& Ors [2007] WADC 88. The learned Registrar struck out parts of the defence and counterclaim, gave leave for the defendants to file an amended pleading and listed the application for further mention.
For a further hearing on 18 September 2007, the first‑named second defendant, Mr Shaw, filed a detailed affidavit. After argument on 18 September 2007, the application was adjourned to 26 October 2007. It was then further adjourned by consent order. The application was ultimately re‑listed for a special appointment on 21 February 2008 in accordance with the parties' unavailable dates. This hearing was once again vacated by consent.
By notice dated 8 February 2008, the plaintiff changed its solicitors to Vogt Graham Lawyers.
Nothing further occurred so the Court listed the action for a directions hearing. This came on for hearing before me on 23 April 2008. I made orders programming the chamber summons dated 1 November 2006 for further hearing and set a timetable for discovery. The application was ultimately heard again on 22 May 2008 by Registrar Kingsley, who issued reasons for judgment on 21 August 2008. This is reported as O'Malley Nominees Pty Ltd v Shawtec Pty Ltd& Ors [2008] WADC 115 ("O'Malley Nominees (No 2)").
Consent orders were subsequently made on 7 October 2008:
(a)that the defendants' minute of proposed amended defence, set‑off and counterclaim filed and dated 31 July 2007 stand as the defence, set‑off and counterclaim in the action with service to be dispensed with;
(b)that the plaintiff file and serve any reply and defence to the amended defence, set‑off and counterclaim on or before 6 October 2008;
(c)setting a timetable for inspection and discovery;
(d)dealing with costs; and
(e)listing a further a directions hearing.
Following two further directions hearings, the plaintiff's reply and to defence to counterclaim was filed on 12 December 2008.
The action was entered for trial on 30 January 2009. In the certificate of this date, the plaintiff's solicitor certified that the matter was "in all respects ready for trial".
A pre‑trial conference was listed for 15 April 2009 by letter from the Court dated 4 February 2009. Subsequently, the defendants wrote to the Court, copied to the plaintiff's solicitors, stating there were several interlocutory issues that needed to be dealt with prior to the pre‑trial conference. They requested the action to be listed for a directions hearing. This occurred and the directions hearing took place on 13 March 2009.
At this directions hearing, consent orders were made setting a timetable for the plaintiff to file and serve any minute of its proposed amended amendment to the statement of claim. A timetable was put in place for objections and the pre‑trial conference relisted.
The applications the subject of the present decision were subsequently filed.

Issues for determination

The issues for determination may conveniently be divided into those relating to the amendments to the indorsement and those relating to the amendments to the statement of claim. I deal with the issue of discretion at the end of these reasons.
The defendant takes issue with the amendments to the indorsement on the writ on two broad grounds:
(a)the amendments seek to add causes of action which arose after the issue of the writ, 24 March 2003; and
(b)the amendments seek to add new causes of action outside the scope of the current indorsement.
The plaintiff adds the following further issues:
(a)that the remittal to the District Court reset the date of the writ;
(b)that the failure of the defendant to make objections to the current statement of claim pleading the claims now sought to be added to the indorsement means that it cannot now complain about these amendments.

Writ issues – summary of amendments

The indorsement in the writ is in somewhat unusual terms. In its current form, it comprises some 15 numbered paragraphs along with a statement of the relief sought over three A4 pages. Eight paragraphs are sought to be inserted, comprising a further three A4 pages.
In its original form, the cause of action set out in the indorsement relates to breach of a lease initially dated 1 July 1991, but subsequently extended until 1 July 2003. There appear to be two leases, one for units 4 and 5 24 Guthrie Street, Osborne Park, and one for Unit 6 at the same address. The lessee is the first defendant. The second defendants are said to have guaranteed the performance by the first defendant of its obligations under the lease.
The indorsement continues that by notice of default served 22 January 2003 the plaintiff demanded payment of the arrears of outgoings comprising just over $25,000 in relation to the three units. The first defendant failed to pay the outgoings when they fell due. The plaintiff then delivered notices of re‑entry to the first defendant but the first defendant failed to vacate and yield up the premises.
For present purposes, it is useful to set out the relief claimed which is as follows:
"AND THE PLAINTIFF CLAIMS IN RELATION TO UNITS 4 AND 5:
A.Possession of units 4 and 5, 24 Guthrie Street, Osborne Park;
B.$12,935.13 for arrears of outgoings;
C.Rent or alternatively mesne profits to date of serving the capital Writ;
D.Mesne profits from the date of service of the Writ to possession of the premises being delivered to the Plaintiff;
E.Damages for breach of Contract in respect of rent and outgoings for the unexpired term of Lease;"
The statement of the relief sought in relation to unit 6 is in similar terms.
The amendments seek to add the following claims:
(a)an alternate claim by the plaintiff that it is entitled to terminate the lease of units 4 and 5 and recover possession as the first defendant breached a covenant in the lease to the effect that it would comply with all relevant laws relating to the use of the units, the first defendant breaching this by non‑compliance with cl 4.2.4.2 of the City of Stirling's District Planning Scheme No. 2 (proposed par 16);
(b)a similar claim in relation as in par (a) in relation to unit 6 (proposed par 17);
(c)further or alternatively, a claim that the plaintiff is entitled to terminate the lease of units 4 and 5 and recover possession as the first defendant breached a covenant in the lease to use the premises for purposes "limited to the activities of a showroom‑office and a warehouse for the manufacturing of office furniture", the allegation being the first defendant wrongfully used the premises predominantly for the carrying on of a retail shop (proposed par 18);
(d)a similar claim as set out in par (c) for unit 6 (proposed par 19);
(e)a further or alternate claim that the plaintiff was entitled to terminate the leases on the ground that breaches of the covenants referred to in par (a) to par (d) above constituted the breach of essential terms of, or alternatively constituted a repudiation of, the respective leases (proposed par 20);
(f)a claim that the plaintiff incurred loss or damage as a result of its lawful termination of the leases including loss of benefits that would have otherwise derived from the performance of the first defendant's obligation under the lease, specifically the covenants to yield up the leased premises at the expiration of the term in good order, paint the leased premises during the last three months of the term and maintain the leased premises in good and substantial conditions (proposed par 21);
(g)a claim that the first defendant engaged in unconscionable conduct in contravention of Trade Practices Act 1974 (Cth) s 51AC in relation to the leases for units 4 and 5 and unit 6 between October 2002 and 1 July 2003 (proposed par 22); and
(h)a claim that it has incurred loss of damages as a result of breaches of the covenants to yield up the leased premises at the expiration of the term in good order, paint the leased premises during the last three months of the renewed term and maintain these premises in good and substantial repair (proposed par 23).
The following further relief was sought to be added in relation to Units 4 and 5, with similar relief being sought for Unit 6:
"f.Compensatory damages arising from the First Defendant's wrongful repudiation or alternatively breaches of essential terms of the Lease for Units 4 and 5 which resulted in the lawful termination of the said Lease either on 4 March 2003 … or on the date of issuance of this Writ.
g.Further or alternatively, damages pursuant to Section 82 or alternatively Section 87 of the Trade Practices Act 1974 (Cth);
h.Declaratory relief pursuant to Section 87 of the Trade Practices Act 1974 (Cth) to the effect that the Lease for Units 4 and 5 was validly terminated on 4 March or alternatively 24 March 2003 on the basis of the subsequent conduct pleaded in par 22 herein;
i.Further or alternatively, damages for breach of the covenant as referred to in par 23 herein."

Writ issues – accrual of the causes of action

The defendants take the point that the amendments to the writ seek to add causes of action which accrued after the date on which the writ was issued, namely 24 March 2003. This does not affect the amendments sought in proposed pars 16 to 20 which assert alternative bases justifying the plaintiff's termination of the lease. It does not affect the claim set out in proposed par 21 as that claim is for damages for the plaintiff not having had the benefit of certain covenants during the period following the termination of the lease, but prior to its contractual expiration date. The timing issue does affect the unconscionable conduct claim in proposed par 22 as that is said to arise from conduct over the period October 2002 to 1 July 2003. The timing issue also affects the proposed par 23 as that relates to damages for breaches of covenants when the premises were yielded up at the end of the lease, being 30 June 2003.
It is well established that a cause of action must be complete as at the date of issue of the writ: Wigan v Edwards (1973) 47 ALJR 586, at 596; Water Authority v AIL Holdings (1992) 10 WAR 233, at 234; Eshelby v Federated European Bank Ltd [1932] 1 KB 254, at 259 - 263, 268.
The cause of action for breach of covenants when the lease was yielded up at the expiration of the lease cannot logically arise until the lease expires. As at 24 March 2003, the time for the first defendant to have complied with these obligations had not then arisen. It could have complied with them during the period 25 March 2003 to 30 June 2003. Indeed, the covenant to paint the premises in the last three months of the term was not even operative as at 24 March 2003, the last three months commencing on 1 April 2003. This conclusion is consistent with the decision in Servcorp (Aust) Pty Ltd v Abgarus Pty Ltd (1995) 38 NSWLR 281, at 283 where it was held that a lessor's claim for each instalment of rent has to be regarded as a separate cause of action for the purposes of determining whether it falls within the facts set out in the indorsement.

The cause of action in unconscionable conduct as described in the indorsement extends beyond 24 March 2003 to 1 July 2003. It cannot be complete before 24 March 2003.
I am conscious of the authorities to the effect that if there is some doubt as to the date on which the cause of action accrued, the appropriate course is to leave the matter to the trial Judge: Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514, at 533; Morgan v Banning (1999) 20 WAR 474, 486. However, I am of the view that there is no doubt with the amendments sought.
It follows that the amendments in pars 22 and 23 and the relief in pars f, g, h and i of both statements of relief cannot be allowed.

Writ issues - effect of the remittal

The plaintiff's alternate argument is that the remittal of the action to the District Court in November 2003 effectively restarted the action for limitation purposes. The remittal as pursuant to DCA s 73(1)(a). This section was repealed with effect from 1 May 2005. At November 2003 it provided:
"73. When an action or matter is brought in the Supreme Court that might have been brought in the Court without the consent of the defendant
(a) the defendant may, at any time, apply to the Supreme Court or a Judge thereof for an order remitting the action or matter to the Court sitting at such place as the order specifies, and the Supreme Court or Judge thereof shall make an order accordingly, unless it or he considers that under the circumstances of the case it is advisable that the action or matter should be tried in the Supreme Court; or
(b)the Supreme Court or a Judge thereof, without any such application, may make such an order, if it or he thinks fit."
The section speaks in terms of the existing action being remitted, not of a new action being commenced. No new writ was issued. This is significant as limitation provisions are generally concerned with the date of issue of the writ rather than any subsequent proceedings: Morgan v Banning (supra) at 476, 482 - 483.
I do not consider that it is even arguable that a remittal pursuant to DCA s 73 restarted the limitation period, or even reset the date of issue of the writ for the purposes of determining what amendments may be made to it. This conclusion is consistent with the decision in Sneade v Wotherton Barytes & Lead Mining Co Ltd [1904] 1 KB 295, referred to in Morgan v Banningat 480 - 481.

Writ issues – scope

Although the proposed amendments setting out further grounds on which its is said that the termination was justified occurred prior to the issue of the writ, the defendant has taken issue with whether they fall within the scope of indorsement on the writ. These are the amendments in proposed pars 16 through 21 and the relief stated in par f.
The indorsement on a statement of claim is to comprise "a concise statement of the nature of the claim made, and of the relief or remedy required in the action": Rules of the Supreme Court 1971 (WA) ("RSC") O 6 r 1(1). The circumstances in which an indorsement may be amended are set out in RSC O 21 r 5, of which r 5(1), (2) and (5) are relevant for present purposes:
"5. Amendment of writ or pleading with leave
(1)Subject to —
(a) Order 18 Rules 6, 7 and 8;
(b) Order 20 Rule 19(2) to (5); and
(c) the following provisions of this Rule,
the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as the court may direct.
(2)Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.
…
(5)An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."
The principles relating to the application of RSC O 6 r 1 and O 21 r 5 have been dealt with on a number of recent occasions by the Full Court and Court of Appeal. They may be summarised as follows:
(a)an indorsement is not intended to be in the nature of a pleading but only a summary of the nature of the claim: Renowden v McMullin (1970) 123 CLR 584 at 595; ABB Service Pty Ltd (formerly known as ABB Engineering Construction Pty Ltd) v Hetherington [2001] WASCA 235 at [9]; Tristram v Hyundai Automotive Distributors Australia Pty Ltd & Anor [2005] WASCA 168 at [16];
(b)RSC O 6 r 1(1) does not require a plaintiff to plead in the indorsement all of the material facts giving rise to a cause of action: Tristram (supra), at [22]; ABB Service Pty Ltd v Hethrington (supra), at [25] - [26];
(c)an indorsement is not a pleading and it should not be read narrowly: Stone James (a firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 at 239; Tristram at [26];
(d)an indorsement provides notice to the defendant of the nature of the plaintiff's claim and the relief sought in the action, and does so by enabling the defendant to know, with finality, what fact or facts are said to give rise to the action against him: ABB (supra) at [10]; Tristram at [16]; Morgan v Banning at 485;
(e)provided a writ is not a nullity, amendments can be made to an indorsement, even a defective indorsement, on the writ if the terms of the writ are wide enough to encompass the proposed amendments as they particularise, clarify, re-label, add to, expand or modify a cause of action already instituted: Morgan v Banning at 486; ABB at [9]; Tristram at [16];
(f)the reference to a "cause of action" in O 21 r 5 is to "the basket of facts which give rise to the right to approach the court for relief, rather than as the description of the right to sue by reference to the old forms of action": Morgan v Banning at 476, also 484;
(g)whether or not the cause of action in question can be said to arise out of the same, or substantially the same, facts as an existing cause of action is essentially a matter of impression based on the degree of overlap: Dye v Griffin Coal Mining Co Pty Ltd (1998) 19 WAR 431 at 434; Hughes v St Barbara Mines Ltd [No 3] [2008] WASC 220 at [111].
In my view, the amendments which seek to add further breaches of covenants said to justify the termination of the lease fall within the same "basket of facts" as that set out in the current indorsement. They add to, expand or modify the existing cause of action. The amendments "can fairly be said to arise out of substantially the same facts as the old cause of action": Dye (supra) at 434. This conclusion enlivens the discretion in RSC O 21 r 5(1) to grant leave to amend. I will return to the issue of how this discretion should be exercised at the conclusion of these reasons.

Writ issues – effect of existing pleading

The plaintiff then sought to rely on the point that the plea in the existing statement of claim relating to:
(a)yielding up possession of the premises the expiration of the term in good order; and
(b)painting the leased premises in the last three months of the leased term,
could also be said to arise after the issue of the writ, 24 March 2003.
The defendants have not brought on an application to strike out the relevant portions of the existing statement of claim on this point. Having not taken issue with this aspect of the statement of claim to date, the plaintiff argues, the defendants ought to be estopped from doing so in relation to the amendments now proposed, or at least this ought to be a factor in the exercise of any discretion.
The rule that a writ cannot be amended to introduce a new case of action which arose after the date of the writ is one of procedure: Wigan (supra) at 592 ‑ 593. A defendant can consent to the addition of such a cause of action: Wigan at 596.
The plaintiff may have a basis for challenging a future application by the defendants for leave to strike out the relevant paragraphs in the current filed version of the statement of claim on the ground of delay, general discretion or some form of estoppel: Commonwealth v Verwayen (1990) 170 CLR 394; Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd (2005) 30 WAR 290, at 303 ‑ 310.
However, the fact that the defendants have not sought to strike out the existing pleadings on the ground that some allegations are outside the scope and timing of the writ, does not impact on the legal question of whether it is arguable that the causes of action now sought to be added in the present application are outside the scope or timing of the writ.
Neither can I see how this point could have any weight to the issue of discretion. The defendants are entitled to make tactical choices as to the issues they will take and the issues they will leave. Indeed, for the costs of commercial litigation to remain proportionate to the amounts in dispute, parties are encouraged to make careful choices as to which issues to leave (especially technical ones) and which issues to take.
There is no evidence before me to the effect that the defendants or their solicitors ever represented to the plaintiff prior to the expiration of the relevant limitation period that the defendants would not take issue with the scope or timing of the writ should the plaintiff seek to plead further breaches of the leases. In the absence of this evidence, the defendants' decision not to strike out the current pleading cannot be given any weight against them in the discretion as to whether or not leave to amend ought to be granted.

Writ issues – summary of findings

In relation to the proposed amendments to the writ, I am not prepared to allow the amendments set out in pars 22 and 23 of the body of the indorsement, and g, h and i of the statement of relief. There is a basis for the discretion to grant leave for the amendments proposed in pars 16 to 21 and par f of the statement of relief. I will deal with the amendments proposed to the statement of claim and then consider the issue of discretion as a whole.

Statement of claim – summary of amendments

The amendments fall into seven categories. The first category are those which seek to refer to the terms of a sub-lease between Ravenscroft Nominees Pty Ltd (a prior lessee of the premises) and the first defendant. The case the plaintiff seeks to plead is that the deed of renewal of the sub‑lease incorporated the terms of both the original lease (as currently pleaded) and the initial sub‑lease. The amendments are to pars 10, 11, 12, 15 (first par) ("Sub‑Lease Amendments").
The second category is to add in breach of cl 3 of the sub‑lease. This is the obligation to use Units 4 and 5 for a showroom/office/warehouse. The amendments are to pars 15(ix) and 26B ("Sub‑Lease Breach Amendments").
The third category is to add further breaches of the original leases in relation to the obligation to maintain the premises. These amendments are to pars 15(viii), 16(viii)) and 26 ("Maintenance Amendments"). The breach is said to occur prior to the premises being yielded up on or before 1 July 2003.
The fourth is to add a breach of an obligation to comply with all relevant laws (par 15(iii), 16(iii), 26A, 26B and 26C, 28). The relevant breach goes to the use of the premises. The plaintiff also seeks to plead an agreement as to use of Unit 6 said to have been entered into in September 2000. This is in pars 16(ix) and (x). I will refer to these amendments as the "Breach of Use Amendments".
The fifth category concerns the vacation of the premises on 30 June 2003. Existing par 24 dealing with the right to re‑enter for breach is removed and re‑pleaded. Paragraph 25 is amended to plead the vacation and steps to mitigate. Paragraphs 31A, 31B, 31C and 31D are added dealing with the basis of the termination on or about 4 March 2003. Paragraph 32 is amended to plead some matters arising after termination. Paragraph 6 of the prayer for relief is also amended ("Termination Amendments").
The sixth category is a claim for unconscionable conduct, set out in pars 34, to 38, along with relief in par 7 and 8 of the prayer for relief ("Unconscionable Conduct Amendments").
The final category comprises a number of other typographical or minor amendments. These include consequential amendments which make it clear that the references to the currently pleaded obligations are to the terms of the original leases. The particulars of rectification are amended as to matters of detail, and some further items added. There are also some miscellaneous amendments which seek to make what is pleaded clearer or more specific, or to change cross‑referencing. I do not propose to deal with these amendments specifically at this stage given the way in which I have ultimately disposed of the applications.

Statement of claim – general principles relating to amendments

The starting point when considering an application for leave to amend is that the Court will not grant leave to a party to make an amendment which does not disclose a reasonable cause of action: Sinclair v James [1894] 3 Ch 554 at 557. Neither will the court grant leave to make an amendment which could be struck out as defective on any of the grounds set out in RSC O 20 r 19(1)(b) to (d): Hooker Corporation v Commonwealth (1986) 65 ACTR 32 at 38.
The principles relating to pleadings challenges are conveniently summarised by Master Newnes (as his Honour then was) in Frank Jasper Pty Ltd & Anor v Deloitte ToucheTohmatsu (A Firm) [2006] WASC 24 at [11] ‑ [13], in the following terms:
"In determining the adequacy of a pleading it is fundamental that a party is entitled to a statement of the opponent's case sufficiently clear to allow the party a fair opportunity to meet it: Gould & Birbeck & Bacon v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490 at 517; Dare v Pulham (1982) 148 CLR 658 at 664. A pleading may therefore by struck out where it is vague, ambiguous or pleaded at too great a level of generality so as to leave the other party in doubt as to how to respond to the pleading: Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 413; Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J.
The application of those principles, and the rules as to pleading contained on O 20 of the Rules of the Supreme 1971, in any particular case invariably involves matters of judgment and degree. The approach to be taken to objections to pleadings, or proposed pleadings, must be directed to the attainment of the objectives set out in O 1 r 4B. Such an approach requires a degree of flexibility that may not always be consistent with the practices of earlier times. In that connection, in my respectful view, the comments of Lockhart J in Australian Competition & Consumer Commission v Golden West Pty Ltd & Geraldton Telecasters Pty Ltd [1997] FCA 792 are apposite. His Honour said:
'It is important that I say something about motions to strike out statements of claim in the conduct of modern litigation. Today, courts are playing an increasingly active role in case management. Motions to strike out pleadings are matters of practice and procedure. In its role of case management, courts devise various procedures to overcome deficiencies in pleadings other than by simply ordering that the offending paragraphs be struck out. Sometimes it is appropriate to strike them out, sometimes not. On some occasions it is better for the court to direct the applicant, whose statement of claim is under challenge, to furnish particulars or to file and serve affidavits to show that there really are facts which can be proved and which, if proved, would support the general statements made in the statement of claim. This was the course which I took in Trade Practices Commission v Australian Iron and Steel Pty Ltd (1990) 22 FCR 305, a practice which other judges adopt from time to time. This is not, of course, intended to be a substitute for a defective pleading in every case because, as is well known, pleadings must assert basic or constitutive facts, not the evidence by which they are to be proved. But case management is a sensible and flexible thing. It must not be unduly circumscribed.'
The question of whether a pleading is so defective that it should be struck out is not, therefore, to be answered by any mechanical application of the rules of pleadings. It is generally to be answered by whether or not the pleading serves the fundamental objective of pleadings and whether any significant deficiencies in it can adequately be overcome by the provisions of particulars or by some other means. While it is necessary that a pleading set out with reasonable clarity and detail the case that the other party must meet, the focus must be on whether the pleadings is sufficient for the fair and proper disposition of the case, not whether it complies meticulously with the rules of pleading."
Where the pleading is sought to be struck out on the basis that it discloses no reasonable cause of action, great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal; General Steel Industries Inc v Commissioner for Railways (NSW)(1964) 112 CLR 125 at 130. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out: Kimberley Downs Pty Ltd v Western Australia, unreported; SCt of WA; Library No 6414; 25 August 1986; Neilson & Anor v City of Swan [2006] WASCA 94 at [18].
In applying these principles, it is important that I note the comments of his Honour the Chief Justice on the function of pleadings and the approach which the Court should take to the resolution of interlocutory disputes. In the decision in Barclay Mowlem Construction Ltd v Dampier Port Authority & Anor (2006) 33 WAR 82, his Honour states (at p 84):
"In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained."

Statement of claim – Sub-Lease Amendments

The primary objection taken to the Sub‑Lease Amendments is that they are "demonstrably incorrect" from the face of the relevant document referred to in par 15 of the statement of claim. The document, described as "Deed of Renewal", is a deed dated 7 May 2001, and is annexed to the affidavit of Mr Shaw sworn 10 August 2009.
As a general rule, when considering whether a pleading discloses a reasonable cause of action, all the facts alleged in the statement of claim must be accepted as true: Kimberley Downs (supra); Neilson (supra) at [18]. No evidence is admissible on an application of this kind: RSC O 20 r 19(2); Southern Wine Corporation Pty Ltd (In Liq) v Frankland River Olive Co Ltd & Anor [2005] WASCA 236, at [51].

Parties can refer to documents in their pleading, and incorporate by reference. If they do, RSC O 26 r 8(2) provides:
"Any party to a cause or matter shall be entitled at any time to serve a notice on the other party in whose pleading or affidavits reference is made to any document requiring him to produce that document for inspection by the party giving the notice."
The purpose of this rule is to put the party requesting the document in the same position or advantage as if the document had been fully set out in the pleading: Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd [1992] 1 Qd R 91 at 92, 93, 97 and 98. Consequently, in assessing whether a pleading discloses a reasonable cause of action the Court may refer to documents mentioned in the pleading: Southern Wine Corporation (supra) at [51]; Day v William Hill (Park Lane) Ltd [1949] 1 KB 632 at 639. In Day (supra) Singleton LJ stated (at 639):
"I am not sure that there was any necessity for the affidavit sworn by the defendant which merely exhibited the documents referred to in the statement of claim, since if documents are referred to in a pleading they become part of the pleading and it is open to the court to read them."
There is thus technically no need to exhibit the relevant document, removing a potential inconsistency with RSC O 20 r 19(2).
On the facts of Day, a client sued his bookmaker on the basis of an account stated. The document in which it was alleged that the account was stated was produced. Upon examination by the court, it became apparent that the document was a weekly account with a balance carried forward and not an account stated in the strict legal sense of that word. The Court of Appeal struck out the statement of claim as disclosing no cause of action. This case is authority for the proposition that if an allegation that expressly purports to derive from a document is not supported by what is contained in the document the allegation is liable to be struck out.
Care needs to be taken in the application of this principle or else the line between a summary judgment application and a pleadings challenge will be blurred. The caution which is exercised before a claim is struck out as disclosing no reasonable case of action is thus of particular importance in this context.
The relevant clause in the deed dated 7 May 2001 is in the following terms:
"This is to confirm the acceptable on renewal of your existing sub lease with all the terms and conditions applying from the existing lease for the period commencing 1/7/01 to 1/7/03."
The plea sought to be supported from this paragraph is at par 10 (with the proposed amendments noted):
"Pursuant to a deed dated 7 May 2001 (and stamped on 3 July 2001), the First Defendant exercised its right under the Sub‑Lease for units 4 and 5 (referred to in the previous paragraph herein) by renewing the term of the Original Lease for units 4 and 5 for a further period from 1 July 2001 to 1 July 2003 ("the Deed of Renewal for units 4 and 5") which deed expressly or alternatively necessarily incorporated the terms of the said Sub-Lease for units 4 and 5 and the terms of the Original Leas of Units 4 and 5. In point of law, the execution of the said Deed ["thereby" – deleted] also effected an assignment of the rights and obligations of Ravenscroft Nominess Pty Ltd under the Original Lease for units 4 and 5 and under the Sub‑Lease for units 4 and 5 to the First Defendant for that renewed term."
In my view the position taken in the amendments to par 10 is an arguable one from the face of the document set out in par 72 above. The relevant text refers to both the lease and the sub‑lease, but does so in a somewhat ambiguous manner. I am not persuaded that the pleading is not supported by the relevant portion of the deed. It is an issue which should appropriately be determined by the trial Judge.
The defendant also suggested in submissions that the amendment may be an abuse of process, citing: Agius v New South Wales [2001] NSWCA 371 at [24]. For the same reasons as set out in the preceding paragraph, I am not persuaded that there is an abuse of process.
The issue then is one of discretion, to which I return at the end of these reasons.

Statement of claim – Sub-Lease Breach Amendments

The second category of amendment is the Sub‑Lease Breach Amendments. If the plaintiff is not permitted to amend to make the Sub‑Lease Amendments, then this plea will also fall away. If the Sub‑Lease Amendments are permitted, then the next objection taken by the defendants to the Sub‑Lease Breach Amendments is that the plea is not a material fact of any cause of action mentioned in the indorsement. The defendants further submit the plea is inconsistent with the terms of the Head Lease and does not, in its terms, have the meaning contended for.
If I allow the plaintiff to amend the writ to include the additional bases for termination in pars 16 to 19 of the proposed amended indorsement, then the Sub‑Lease Breach Amendments are clearly supported by the indorsement.
If not, the issue arises as to whether the Sub‑Lease Breach Amendments could nonetheless be supported by the indorsement in its current unamended form.
The indorsement on the writ "marks out the perimeter within which a plaintiff may frame the statement of claim": ABB, at [7]; Tristram [16]. In this regard, RSC O 20 r 2(2) provides:
"A statement of claim must not contain any allegation or claim in respect of a cause of action unless that cause of action is mentioned in the writ or arises from facts which are the same as, or include or form part of, the facts giving rise to a cause of action so mentioned."
A pleading in a statement of claim or a proposed amendment which exceeds the indorsement should be struck out, or the amendment refused, unless the indorsement is amended: Stone James (supra), at 238; ABB at [8]; Tristram [16]. However, and as already noted, an indorsement is not a pleading and it should not be read narrowly.
I am of the view that the Sub‑Lease Breach Amendments arise from facts which are the same as, or include or form part of, the facts giving rise to the causes of action set out in the indorsement in its unamended form. The amendments set out an alternate ground for terminating the lease of the same kind – breach of lease covenant – and at the same time as the termination currently set out in the indorsement.
The next objections are that the Sub-Lease Breach Amendments are inconsistent with the terms of the Head Lease and that the relevant clause, in its terms, does not have the meaning contended for. For the reasons set out in relation to the Sub-Lease Amendments, I do not consider that this is an issue which should be determined in a pleadings dispute. If the amendments are allowed, the defendants can raise their concerns in an amended defence
As the Breach of Use Amendments fall within RSC O 20 r 2(2), whether or not the indorsement is amended, the issue becomes one of discretion.

Statement of claim – Maintenance Amendments

The defendants submit that the Maintenance Amendments do not seek to plead material facts to any cause of action set out in the indorsement. The issue here whether the statement of claim can include a pleading of a cause of action that arose after the issue of the writ. I have already determined that the indorsement is not able to be amended to include claims for unconscionable conduct and breaches arising after the issue of the writ. The issue is whether the Maintenance Amendments could nonetheless be supported by the current writ.
In Water Authority (supra) the plaintiff unsuccessfully sought to amend the statement of claim to have a cause of action which accrued after the writ added. The plaintiff claimed water charges from the defendant. The writ was issued on 24 May 1989 claiming charges up to 28 July 1988. The plaintiff sought to amend the statement of claim to an instalment due in July 1989. Acting Master Hawkins declined the application, commenting (at 235):
"Whilst it may be true that the obligation to pay the instalments arose out of the same agreement that the plaintiff relied upon when the writ was first issued, the failure to make the payment on a date subsequent to the writ being issued is not a fact that forms part of the facts giving rise to the cause of action contained within the writ as originally issued. The further failure to make the further instalment is a 'similar' fact, not the 'same' fact."
In doing so, the learned Acting Master followed the decision of the NSW Court of Appeal in Baldry v Jackson [1976] 2 NSWLR 415.
One issue for determination was whether RSC O 20 r 10 allows a party to plead subsequent breaches. It provides:
"Subject to Rules 8(1) and 11, a party may in any pleading plead any matter which has arisen at any time, whether before or since the issue of the writ."
The learned Acting Master held that the reference to a "matter" in this rule is in distinction to a "cause of action": Water Authority at 235. Consequently, RSC O 20 r 10 could not be used as a basis to add a cause of action accruing after the date of the writ.
Applying these principles to this case, the breach in relation to the Maintenance Amendments is at the time of yielding up the premises (proposed amended statement of claim, par 26). The cause of action thus arises after the issue of the writ. Using the same approach as adopted in Water Authority, these breaches do not arise "from facts which are the same as, include or form part of the facts giving rise to" the breaches set out in the indorsement relied on to support the right to terminate, as required by RSC O 20 r 2(2). This may seem a harsh result as the remainder of par 26, in its unamended form, pleads a breach of the covenant to yield up the premises on good order and to paint the premises in the last three months. However, as already noted, the defendants have not sought to strike out these pleas, so, although technically defective, they remain.
As the Maintenance Amendments do not fall within RSC O 20 r 2(2), they should not be allowed, and no issue of discretion arises.

Statement of Claim – Breach of Use Amendments

The defendant's primary challenge to the breach of use amendments is that these amendments fall outside the scope of the writ.
As set out above, I am of the view that the amendments to the indorsement to add the breach of use claim (proposed pars 16 to 20) fall within RSC O 21 r 5(1) and thus the power to amend is enlivened.
If I am wrong this, or decide not to allow the writ to be amended on discretionary grounds, the issue arises as to Breach of Use Amendments could be supported on the writ in its unamended form. For the reasons set out in relation to the Sub‑Lease Breach Amendments, I am of the view that the Breach of Use Amendments arise from facts which are the same as, or include or form part of, the facts giving rise to the causes of action set out in the indorsement in its unamended form.
As the Breach of Use Amendments fall within RSC O 20 r 2(2), the power to amend is enlivened and the issue becomes one of discretion.
The defendants raise further specific issues with the agreement as to use of Unit 6 said to have been entered into in September 2000. This agreement is sought to be added into par 16 which sets out the relevant covenants in the lease for unit 6 which the plaintiff relies upon. Pleaded in this way it is embarrassing. However, I am not persuaded that the substance of the plea would not disclose a cause of action. Subject to the issue of discretion, I would have given the plaintiff the opportunity to plead these matters are a separate paragraph.

Statement of Claim – Termination Amendments

As to the fifth category, Termination Amendments, it is convenient to analyse these paragraph by paragraph. In general terms, the defendants submit that the Termination Amendments seek to plead causes of action which arise after the date of the writ, are "demonstrably inconsistent" with the facts and otherwise do not establish causes of action.
The defendant does not raise any specific objections to the amendment by which proposed par 31A(i) is inserted.
In relation to proposed par 31A(ii), the defendants' objection is that the plaintiff pleads breaches of a term or covenant pleaded at par 24 of the statement of claim, which paragraph does not plead term or covenant which can be breached. Rather, that paragraph pleads an express covenant that the plaintiff was entitled to re-enter into possession of the premises in the event that there was any unpaid rent or other monies payable seven days after issue of a notice of default.
The proposed amended par 31A(ii) is as follows:
"By reasons of the matters pleaded in the previous sub‑paragraphs herein, the First Defendant has committed breaches of the essential term or covenant pleaded in par 24 herein of the said leases comprised in the Deed of Renewal of units 4 and 5 and the Deed of Renewal of unit 6 respectively, thereby entitling the Plaintiff to re-enter and terminate the said leases, or alternatively has thereby repudiated its obligation under the said leases."
It seems to me, that the concerns of the defendants could easily be met by changing the reference to par 24 to a reference to earlier paragraphs pleading the breach which is said to give rise to the right to re‑enter pursuant to the term proposed to be pleaded in par 24.
The defendants then assert that par 31A(ii) is irrelevant in the absence of a pleading that the plaintiff has re‑entered the premises. In this regard, the defendants contend that the plea in par 31B of termination by notice of re‑entry on 4 March 2003 is demonstratively inconsistent with certain facts. Those facts are:
"22.1.1Tax invoices issues by the Plaintiff for monthly rent under the lease for units 4 and 5 in March, April, May and June 2003;
22.1.2the plaintiff's letter of 7 March 2003 confirming receipt of the March 2003 rent;
22.1.3the plaintiff's subsequent receipt and application of the monies from the First Defendant for April, May and June 2003 rent;
22.1.4correspondence from the Plaintiff to the First Defendant on 19 March 2003 requesting the First Defendant comply with the Lease in relation to issuance and white-ant certificate;
22.1.5the Plaintiff's Notice of Breach of the Lease of units 4 and 5 on 20 May 2003."
At pars 67 to 70 above I discussed the extent to which documentary evidence can be examined in a pleadings challenge. Neither par 31A nor par 31B refers to any document. This takes the situation outside the principles in Southern Wine Corporation, Mantaray (supra) and Day discussed above. The present application is not a summary judgment application, so it is not an opportunity to consider the merits of the claim. In my view, the concerns raised by the defendants are appropriately concerns which they may plead in their defence.
The defendant does not raise any specific objections with par 31C(i).
In relation to par 31C(ii), the plea sought to be included is that the plaintiff is entitled to terminate by reason of the breach of regulatory obligations or the breach of the covenants as to the use of the premises. I have earlier determined that, subject to discretionary considerations, there is the power to amend to include the Breach of Use Amendments. The same reasoning applies to the plea in par 31C(ii).
As to par 31D, the amendment raises a claim that the plaintiff has lost the benefit of the leases as a result of the first defendant's repudiation or alternatively breaches entitling termination of the leases. It contains a plea that the plaintiff is entitled to recover damages equivalent to or based on the loss of the benefit of the performance of any covenants required to be performed under the leases prior to or at the expiry of the terms of leases and any monies payable by reason of the breaches under the leases that occurred prior to the date of determination.
The defendants assert that this is inconsistent with the pleading that the first defendant vacated the premises in any event on 30 June 2003.
The plaintiff's argument appears to be that had the first defendant complied with the termination processes in the relevant leases, the first defendant would have yielded up possession at some stage in March 2003. Once that possession was yielded up, the first defendant would then not have been in a position to perform the covenants which took effect at the expiration of the lease term. The two specific covenants were the covenant to re‑paint the premises in the last three months and the covenant to yield up the premises in good order.
This plea is in somewhat convoluted terms. It seems to have been pleaded in this way to crystallise the plaintiff's losses at a point in time prior to the issue of the writ. Although the pleading is somewhat convoluted, I am not persuaded that it ought to be struck out as disclosing no reasonable cause of action.
The defendants also take issue with the amendments to par 32 of the statement of claim. This is a claim for loss of rent between the date at which the lease was terminated and the dates on which each of the units were subsequently re‑let. The amendments seek to clarify the circumstances of the termination and to add a plea that the reason why the plaintiff was unable to re‑let the property was by reason of the first defendant's breach of the covenant to yield up the premises in good order.
The complaint is that the alleged breaches of covenants in relation to yielding up the premises cannot have accrued prior to the issue of the writ.
To my mind, the proposed amendments cure any limitation issue rather than exacerbate it. The amendments make it clear that the termination date was 4 March 2003 or alternatively on or about 24 March 2003, that is, prior to the issue of the writ. Although the paragraph refers to facts occurring after the date of issue of the writ, it does so in the context of establishing the plaintiff's damages for the refusal to vacate pursuant to the termination provisions in the deed. This is a legitimate application of RSC O 20 r 10 which I have referred to earlier (see par 88 above).
I am thus of the view that the Termination Amendments do not breach the technical rules of pleading (with one exception that may be cured). The issue is one of discretion.

Statement of Claim – Unconscionable Conduct Amendments

The arguments that were pressed by the defendants in relation to the Unconscionable Conduct Amendments were that they are not supported by the indorsement in its current form, both as to timing and scope, and do not identify any losses suffered. My earlier finding on the writ is that I am not satisfied that the amendments to introduce this cause of action into the writ fall within O 21 r 5. The issue remains as to whether they are supported by the indorsement in its current form.
As to timing, the Unconscionable Conduct Amendments refer to conduct over the period October 2002 to 17 March 2004. To the extent that the pleading relates to conduct in the period after 24 March 2003, it falls outside RSC O 20 r 2(2) for the reasons I discussed in relation to the Maintenance Amendments. The plea in its current form is thus defective.
As to scope, assuming the Unconscionable Conduct Amendments were limited to facts arising prior to 24 March 2003, the residual issue is whether could be supported by the current indorsement. On this issue, I am not satisfied that these amendments are "in respect of a cause of action [which is] mentioned in the writ or [which] arise from facts which are the same as, or include or form part of, the facts giving rise to a cause of action so mentioned" as required by RSC O 20 r 2(2). There is no mention in the current indorsement of any issues concerning the doors or roller doors in the premises, any conduct in 2002, any correspondence relating to the extension, the ACCC complaint or correspondence in March 2003.

In coming to this conclusion, I note that the power to amend the indorsement is in wider terms than the limitation which the indorsement places on the statement of claim. As to the former, RSC O 21 r 5(5) allows an amendment "notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed". By contrast, RSC O 20 r 2(2) provides that a statement of claim must not contain any allegation or claim "in respect of a cause of action unless that cause of action is mentioned in the writ or arises from facts which are the same as, or include or form part of, the facts giving rise to a cause of action so mentioned" (my emphasis in each case). The regime in the RSC seems to be that there is wide power to amend the indorsement, but once the indorsement is set, its scope must be given effect to. In a usual case, any harshness or injustice which may follow from a literal reading of RSC O 20 r 2(2) can be dealt with by amendment to the indorsement.
As to the complaint that no loss is particularised, if I were otherwise of the view that the Unconscionable Conduct Amendments are permissible, I would deal with the issue of the failure to particularise the loss by way of an order to provide particulars of damage.

Discretion – Issues

From the reasons so far, my discretion is enlivened in relation to whether to allow:
(a)in the indorsement, the amendments to pars 16 to 21 and par f of the statement of relief;
(b)the Sub-Lease Amendments;
(c)the Sub-Lease Breach Amendments;
(d)the Breach of Use Amendments; and
(f)the Termination Amendments.
I do not consider that my discretion is enlivened in relation to the Maintenance Amendments and the Unconscionable Conduct Amendments.
As the issue of discretion relates to the two applications as a whole, the comments which follow would be equally applicable if am wrong in relation to the issues on which I have found that my discretion is not enlivened.

Discretion – legal framework

The discretion to allow amendments is set out in RSC O 21 r 5. It provides that "the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as the Court may direct".
What may be described as the traditional approach to the exercise of discretion in relation to pleadings amendments is summarised by Newnes AJA in May v Thomas [2008] WASCA 215 in the following terms (at [33] ‑ [34):
"The relevant principles to be applied on an application to amend a pleading are well-known. In general, a party should be permitted to amend their pleading so that the court may decide all matters in issue between the parties, unless the amendment would cause an injustice to the other party which could not be adequately remedied, for instance by an order for costs: Cropper v Smith (1884) 26 Ch D 700, 710; Shannon v Lee Chun (1912) 15 CLR 257, 260 - 261; Clough v Frog (1974) 4 ALR 615, 618; The State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, 154.
The party seeking the amendment bears the burden of persuading the court that the amendment will not cause irremediable prejudice to the other party: Hancock Shipping Co Ltd v Kawasaki Heavy Industries Ltd [1992] 1 WLR 1025, 1030; McKenzie v Commonwealth of Australia [2001] VSC 361 [22] ‑ [23]; Burk v Commonwealth of Australia (No 3) [2004] VSC 210. However, the party opposing the amendment ordinarily bears the evidential onus of adducing evidence in relation to the prejudice, at least where the proof of that prejudice lies in the hands of that party; the non-existence of prejudice is difficult to prove, so that in practice in the latter circumstances an evidential burden is borne by the party resisting the amendment: Hancock Shipping Co Ltd (1030). But it is not sufficient for a party to rely on prejudice which results from an unreasonable act or omission on the part of that party: Steward v North Metropolitan Tramways Co (1886) 16 QBD 556, 559 ‑ 560; Wilson v Grimwade [1995] 2 VR 628, 632."
A significant issue in determining the present applications is the extent to which this approach must now be refined in the light of the recent decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 258 ALR 14. In Aon (supra) all members of the Court held that in exercising the general discretion to allow amendments to pleadings in Court Procedure Rules 2006 (ACT) ("ACT Rules") r 502, the Court is to seek the objectives of case management set out in ACT Rules r 21 (at pars [36], [89], [133]-[134], [157]). ACT Rules r 502 is similar in effect to RSC O 21 r 5. The objectives of case management set out in ACT Rules r 21 are substantially the same as those set out in RSC O 1 r 4A and 4B, which are in the following terms:
"4A. Elimination of delays
The practice, procedure and interlocutory processes of the Court shall have as their goal the elimination of any lapse of time from the date of initiation of proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues bona fide in contention between the parties and the preparation of the case for trial.
4B. System of case flow management
(1)Actions, causes and matters in the Court will, to the extent that the resources of the Court permit, be managed and supervised in accordance with a system of positive case flow management with the objects of —
(a)promoting the just determination of litigation;
(b)disposing efficiently of the business of the Court;
(c)maximising the efficient use of available judicial and administrative resources; and
(d)facilitating the timely disposal of business at a cost affordable by parties.
(2)These Rules are to be construed and applied and the processes and procedures of the Court conducted so as best to ensure the attainment of the objects referred to in paragraph (1)."
By parity of reasoning, in exercising the discretion in RSC O 21 r 5, I should seek the attainment of the objectives in RSC O 1 r 4A and 4B.
The majority in Aon made the following comments on ACT Rules r 21 which are relevant to the interpretation of RSC O 1 r 4A and 4B (at [98], [102]):
"Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a 'just resolution' is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
…
The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. While r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment."
The majority placed emphasis on whether the party seeking the amendment has had a sufficient opportunity to identify the issues they seek to agitate (at [112] – emphasis in original):
"A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate."
The overarching issue in the exercise of the discretion to grant leave to amend is to balance the competing risks of injustice in the context of maintaining public confidence in the legal system as a whole. Four factors emerge from the decided cases:
(a)the reasons for delay in making the application;
(b)the prejudice to the plaintiff if leave is not granted;
(c)the prejudice to the defendant if leave is granted; and
(d)the impact on the public interest if leave is granted.
See generally: Aon, State of Queensland v J L Holdings (1997) 189 CLR 146; Wiltrading (supra), Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd(No5) (1997) 18 WAR 334, at 345; Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323. Each of these factors is considered in detail below.
In balancing these factors, a recurring theme from the decided cases is the need for the Court to strive for proportionality. This principle is described in District Court Circular to Practitioners CIV 2008/2, Commercial List, as follows:
"That principle may be generally expressed in terms of requiring the Court to deal with cases, so far as practicable, in ways which are proportionate:
(a)       to the importance of the issues involved;
(b)       to the value of the subject matter involved;
(c)       to the complexity of the issues; and
(d)       to the financial position of each party;
consistently with the overriding obligation of the Court to deal justly with its cases."
His Honour the Chief Justice comments in the need for proportionality in in Youlden Enterprises Pty Ltd v Heath Solutions (WA) Pty Ltd & Ors (2006) 33 WAR 1 at [2]:
"In many cases, the time and expense involved in the consideration and resolution of the interlocutory dispute is entirely disproportionate to its significance to the just and effective resolution of the case as a whole by mediation or trial."
Kenneth Martin J makes a comment to similar effect in Staley v Pivot Group Pty Ltd [2009] WASC 204, at [5]:
"At pars 2 to 8 of their written submissions dated 18 June 2009, the plaintiffs set out certain orthodox legal principles relevant to the importance of pleadings which may be uncontroversially accepted. Those orthodox pleading principles now need, however, to be interpreted in light of the principles of modern case flow management, which underlie the existence of the Commercial and Managed Cases List, as it is administered in this court. These new principles envisage that parties and their advisors will pursue litigation sensibly and efficiently and will strive to keep interlocutory disputes to a minimum. The guiding principle of proportionality will also operate as a 'brake' against extravagant or unnecessary requests for documents, particulars or the raising of arcane pleading points - which have bedevilled commercial litigation for too long, to the detriment of the justice system."
The reference to the Supreme Courts Commercial and Managed Causes List is apposite to the District Court's Commercial List. There are similar comments in Macmahon Contractors Pty Ltd v Woodside Energy Ltd [2008] WASC 271, at [11] - [26].

Discretion – reasons for delay

This first, and perhaps most critical, factor is the reason why the party has not sought the relevant order in the past. To quote the majority in Aon (at [103] – footnotes omitted, also [98]):
["103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in JL Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case."
The importance of an explanation for the delay has also been emphasised by the Supreme Court: see generally Pollard v Endale Pty Ltd [2009] WASCA 189 at [43]; Wiltrading at 315 ‑ 316; Tony Sadler (supra) at 336; Morgan v Banning at 487 ‑ 488.
Where there is a recent catalyst for the application, the Court is more likely to grant leave, there having been no prior opportunity to raise the issue. This seems to have been a significant factor in the grant of leave in J L Holdings (supra) (at 154) and a significant factor against the grant of leave in Aon (at [51] ‑ [54], [106], [131]). In the words of Justice Heydon in Aon (at [131]): "There was nothing to indicate that whatever was seen as relevant had not been available earlier if diligence had been employed".
Given the importance of delay it is appropriate that I quote the salient parts of the affidavit of Mr Goldthorpe on which the plaintiff relies:
"8.In May 2004, a Statement of Claim was drafted by my Previous solicitors. To the best of my knowledge and recollection, no statement of evidence was completed in relation to the various facts and events that have occurred in this matter by my Previous solicitors. Over the ensuring months, changes were made to the draft Statement of Claim.
9.I was not personally aware of any requirement to prepare an amended indorsement of claim in relation to the Writ of summons that had been earlier lodged by Messrs Conal O'Toole. Nor did I sight any indorsement of claim during my conferences and correspondence with my Previous solicitors. The Statement of Claim herein was based upon the draft that had been prepared by my Previous solicitors in May 2004 and settled by my present counsel (and filed in December 2004).
10.The Statement of Claim raised various issues in relation to breaches of covenants of the lease agreements which are the subject of the dispute in these proceedings, The Statement of Claim also sought relief by way of termination damages (as the issue of possession of the leased premises was no longer practically relevant as the first Defendant had vacated on or about 30 June 2003).
11.To the best of my knowledge, recollection and belief, I raised the type of matters that have been made the subject of the Minute of amended Statement of Claim with Bruce Havilah, principal of my Previous solicitors. I was not told by my Previous solicitors that these matters had not specifically been raised in the Statement of Claim and therefore assumed that they had been so raised.
12During my recent preparation of this matter for trial (during the process of advising on evidence), I was informed by my present solicitors (or their counsel) that a substantial part of the matters now sought to be included in an amended Statement of Claim were not included."
In essence, the reason for the delay was due to an error by, or mis‑communication with, the plaintiff's solicitors in not seeking to amend the statement of claim earlier. It is not the plaintiff's case that it could not have made the application at an earlier stage due to some factor external to the plaintiff. The facts arose at the same time as the facts currently pleaded. Mr Goldthrope does not depose to any facts being discovered at a later stage. Indeed, it seems that Mr Goldthrope was aware of sufficient facts to instruct the plaintiff's solicitors at some earlier stage to make the amendments now sought. Thus, it cannot be said that due to some factor external to the plaintiff (and its advisers) the plaintiff did not have the opportunity to seek the amendments at an earlier stage. The existence of such a factor is usually a significant factor in favour of the grant of leave as it means that the party seeking leave has not had an opportunity to seek the amendment at an earlier stage.
Given that the statement of claim has been on the court file now for well over four years, I am of the view that the plaintiff has had sufficient opportunity to make the amendments sought at an earlier stage.
However, in exercising the discretion in this case, I am conscious that "the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases": Cropper v Smith (1884) 26 Ch D 700, at 710 ‑ 711. The fact that there has been an oversight by the plaintiff's solicitors, or perhaps a miscommunication between the plaintiff's officers and its solicitors, is a factor in favour of the grant of leave. This is not a case where the party seeking the amendment has made "a late and deliberate tactical change in the direction of its conduct of the litigation", as was the case in Aon (at [24]).

Discretion - prejudice to the plaintiff

The second factor is the prejudice to the party seeking the amendment if the amendment is not granted: see generally: Wiltrading at [314] – [317]. This may require a detailed analysis of the specific grounds of prejudice: Wiltrading (at [314] – [317]).
In looking at the prejudice to the parties, the Court will examine the nature and importance of the amendment to the parties: Aon at [102]. Where the proposed amendments do not extend in any material way the factual ambit of the action, that will be a factor weighing in favour of the grant of leave: Permanent Mortgages Pty Ltd v Vandenbergh [2009] WASCA 156 at [21]. It will also weigh in favour of the amendment if it will enable the "litigation to be fought out on the true facts": Stone James at 241. In JL Holdings weight was given to the fact that the point sought to be raised by the amended pleading could not be avoided at trial as it was apparent on the face of certain documents: at 154 , also Aon at [28].
It may be that in some cases the issue of prejudice is difficult to ascertain in the absence of a full trial. In such a case, it may be appropriate to leave the issues for the trial Judge to determine: Wiltrading (at 313 ‑ 315). On this issue, Wheeler JA in Morgan v Banning made the following comments (at 486):
"At least in a clear case, the court should refuse to allow the addition of a new cause of action … There may of course be circumstances where it is not clear how the amendments relate to the original cause of action and in such a case, it may be preferable that the issue be left for trial, just as the issue may be left for trial where it is not clear from the pleadings whether an action is time barred. If there is no new cause of action in that sense, but is rather a re-labelling, addition, modification or clarification of an existing cause of action raised in the indorsement, O21 r5(5) is applicable. When the discretion is exercised in that case, it is of course to be remembered that the effect of a refusal to permit amendment may be that a plaintiff will be unable to bring an issue before the court at all, and questions of justice to the plaintiff, delay, reasons for delay, prejudice to the defendant or other persons, possible abuse of process, among others, will be relevant."

The prejudice to the plaintiff if the amendments are not allowed is that it will not be able to pursue its claims relating to the termination of the leases in the form it wants. New causes of actions for breaches of the lease accruing as at 23 March 2003 or 30 June 2003 are now statute barred: Limitation Act 2005 (WA) s 13. The claim for unconscionable conduct pursuant to the Trade Practices Act 1974 (Cth) is likewise subject to a six year limitation period: s 82(2). However, the plaintiff still has a claim. The prejudice goes to the extent.
The losses claimed by the plaintiff claims are:
(a)loss of rent from the date of termination until the expiry of the lease (less any rent which may have been paid);
(b)damages to put the leased premises in the condition they would have been in had the obligations to paint the premises in the last three months and yield up the premises in good order been complied with; and
(c)loss of rent for the period between the expiration of the lease and when the premises could be re-let after the rectification work was done.
The claims in relation to breach of use adds another basis for termination. It is a basis that does not seem to have been relied on at the time. Counsel for the plaintiff was not able to describe for me any additional damages that could be claimed as a result of this breach.
The claim in relation to the obligation to maintain repeats the issue in relation to the state of the premises or yielding up in good order, an issue that will be dealt within the current pleadings. Again no additional damages appear to flow from this breach.
This leaves the unconscionable conduct claim. This claim provides an additional basis for terminating the lease. Again counsel was not able to describe for me any additional damages that could be claimed as a result of this claim.
With one caveat, this leads me to conclude that the amendments seek to embellish the existing claims, as opposed to raising new sources of loss. The caveat is that some of the Termination Amendments seek to clarify the basis of the claims currently pleaded. These amendments may be necessary to ensure that the causes of action currently pleaded can be with optimally dealt with at trial.
It seems to me that one practical way in which proportionate justice will be achieved is by limiting the issues that the parties are able to litigate. Perfect justice in the sense of litigating all of the issues that all of the parties want to litigate may simply be unaffordable given the magnitude of the losses claimed and the delays to date [italics my emphasis]. Here, to allow the case to proceed to trial on the issues currently in the statement of claim ‑ subject to dealing with the caveat set out in the previous paragraph – will still allow the plaintiff to be able to claim its actual losses on a number of different bases. The injustice to the plaintiff of not allowing the amendments is only one at the margins. To not allow the plaintiff to make the Termination Amendments in one form or another would seem to punish the plaintiff for the apparent error by, or mis‑communication with, its solicitors.

Discretion – prejudice to the defendant

The general principles relating to prejudice set out above are applicable to the party opposing the amendment. The defendants have not identified any specific prejudice they will suffer if all the amendments sought are allowed. The affidavit of Mr Shaw sworn 10 August 2009 is silent on this point.
There is a further significant issue, namely delay. It is now generally accepted that "justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants": Aon at [100]. It is not just personal litigants who feel this stress; corporations and those who work in them are also subject to the pressures of litigation: Aon at [100].
In the words of Justice Heydon, commercial litigation has significant claims to expedition (Aon at [137]):
"… Those claims rest on the idea that a failure to resolve commercial disputes speedily is injurious to commerce, and hence injurious to the public interest… Commercial life depends on the timely and just payment of money. Prosperity depends on the velocity of its circulation. Those who claim to be entitled to money should know, as soon as possible, whether they will be paid. Those against whom the entitlement is asserted should know, as soon as possible, whether they will have to pay. In each case that is because it is important that both the claimants and those resisting claims are able to order their affairs. How they order their affairs affects how their creditors, their debtors, their suppliers, their customers, their employees, and, in the case of companies, their actual and potential shareholders, order their affairs. The courts are thus an important aspect of the institutional framework of commerce. The efficiency or inefficiency of the courts has a bearing on the health or sickness of commerce."
In the present case, there have been considerable delays already by both sides. The chronology set out at the beginning of these reasons reveals unexplained delays by both parties. The action has been in progress for some six and a half years. By the time the action goes to trial at some stage in early 2010, the events in dispute will be seven years old. The impact of the effluxion of time will inevitably undermine the quality of the evidence witnesses are able to give. There have been over 40 interlocutory hearings in the District Court. The Court file consists of some 104 filed documents and formal court documents. The solicitor‑claim costs must have run into many tens of thousands of dollars, probably in excess of the $70,000 or so in damages claimed by the plaintiff.
Some two years of the elapsed time was due to the plaintiff's endeavours to strike out the defence and counter claim. There were in excess of 10 hearings on that application, along with multiple affidavits and numerous sets of written submissions.
One effect of allowing the plaintiff to substantially amend the statement of claim is that the defence and counterclaim will need to be substantially redrafted. There is a real risk that much of the work undertaken to finalise the defence and counterclaim will be wasted. There is the further issue of more cost and delay.
One response is to give the defendants the costs of the amendments, perhaps on a solicitor-client basis. However, the decision in Aon makes it clear that costs orders may not be sufficient to ameliorate the effects of delay. The defendants are "entitled to the timely and efficient resolution of the action against them": Pollard (supra) at [43]. See also: Attorney‑General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301 at [80].

Discretion – public interest considerations

The fourth factor is the public interest in the proper and efficient administration of justice. In Aon the Court affirmed that the public interest in the administration of justice, reflected in provisions such as ACT Rule 21 (and RSC O 1 r 4A and r 4B) is an important consideration in the exercise of judicial discretions. In the words of the Chief Justice (at [24], [30], also [93], [133]):
"… Undue delay can undermine confidence in the rule of law. To that extent its avoidance, based upon a proper regard for the interests of the parties, transcends those interests. Another factor which relates to the interests of the parties but transcends them is the waste of public resources and the inefficiency occasioned by the need to revisit interlocutory processes, vacate trial dates, or adjourn trials either because of non-compliance with court timetables or, as in this case, because of a late and deliberate tactical change by one party in the direction of its conduct of the litigation. These are matters which, even under the Australian versions of the Judicature Act system, unaffected by the sequelae of the civil procedure reforms of 1998 in the United Kingdom, are to be regarded as both relevant and mandatory considerations in the exercise of the discretion conferred by rules such as r 502.
…

It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, JL Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes."

The same concern was expressed by the Full Court of the Supreme Court in Christmas Island Resort (No5) (supra) at 345:
"Access to justice is a critical factor in the functioning of a fair society. Court resources, both in terms of time and facilities are scarce and shrinking. This makes even more important for a court to ensure that public resources are applied in the best and most efficient means possible. The way in which parties to a dispute seek access to the public resources that the courts represent must be closely monitored….It is a question of balancing the private interests of the parties against the broader public interest considerations involved in the administration of justice."
Similar comments are also made in Pollard (at [24]), Attorney‑General of Botswana (supra) (at [80]), Wiltrading (at 316) and Tony Sadler (at 333 ‑ 334).
The issue of impact on the public interest falls into sharpest focus when the proposed exercise of discretion would imperil trial dates. This is a very significant factor, as if the allocated trial dates are vacated, it usually means that the trial dates are not able to be allocated to another party awaiting trial dates. This was a significant point of distinction between the facts in JL Holdings – where there was six months to trial (146 CLR at 154) – and Aon – where the amendment was sought three days into the four week trial. However, this action has not been allocated trial dates
Another aspect relevant to the public interest is "the need to revisit interlocutory processes": Aon at [24]. Aligned to this is whether the Court resources used in prior interlocutory processes would be wasted by the grant of the application.
In the present case, the Court has expended a considerable amount of the community's resources in the course of the present litigation. As noted, there have already been over 40 interlocutory appearances in the District Court. Allowing amendments that may waste the work done in settling the defence and counterclaim waste not only the time of the defendants, but the time of the Court. Given the delays and costs incurred by the parties to date weighted against the amounts in issue, there is a real potential for a loss of public confidence in the legal system - specifically the District Court's Commercial List- if the court accedes to this application in its entirety.

Discretion – application

The difficult challenge is how to give effect to the general principles laid down in Aon and the other authorities which I have cited, in particular how best to set the balance between the private interests of the parties and the broader public interest considerations involved in the administration of justice, particularly that of proportionality.
With one caveat which I will refer to shortly, it seems to me that the balance in this case is to be achieved by:
(a)denying the plaintiff leave to amend the indorsement and statement of claim in the terms sought;
(b)allowing the plaintiff to make limited amendments to the statement of claim to allow the causes of action currently set out in the statement of claim to be optimally pleaded (being more or less the Termination Amendments).
"Limits may be placed upon re-pleading, when delay and cost are taken into account": Aon (at [98], [102]). An order in the terms proposed minimises the prejudice to the plaintiff as it allows the plaintiff to plead its current case at its strongest. The order seeks to avoid punishing the plaintiff for the apparent error by, or mis-communication with, its solicitors. Disallowing the wider amendments does not prejudice the plaintiff by precluding it from recovering a type of loss which it cannot recover under the statement of claim as presently pleaded. "It… cannot be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs": Aon at [98]. The plaintiff can achieve substantial justice without the amendments in their full form.
I am satisfied that the plaintiff has had ample opportunity in the past to make an application to amend the writ and statement of claim in the terms now sought to include the further causes of action. No external catalyst has been cited for the amendments being made at this late stage. There is no injustice by reason of the denial of an opportunity to amend.
Amendments of the kind outlined minimise the prejudice to the defendants as responding to them should not cause wholesale changes to be made to the defence and counterclaim, thereby avoiding wasting the effort made to date to settle that document. An order for costs thrown away together with close case management oversight should adequately deal with the actual prejudice of further costs and the potential prejudice of further delay.
The caveat is that if the defendants at some later stage seek to strike out the parts of the pleadings in the statement of claim as filed on the ground that they plead causes of action arising after the date of issue of the writ or otherwise fall outside the scope of the indorsement, then the careful balance of the risks of an injustice, and the preservation of confidence in the court, sought to be achieved in the orders proposed may be undone. As I have already noted, a defendant can consent to causes of action which arose after the issue of the writ being included in the statement of claim. Further, and again as noted, the plaintiff may have good grounds to oppose such an application on the ground of delay, general discretion or some form of estoppel (see par 50 above). However, in my view, balancing the risks of injustice requires something more. RSC O 21 r 5 empowers me to allow the plaintiff to amend its statement of claim "on such terms as to costs or otherwise as may be just and in such manner (if any) as the Court may direct". To avoid the careful balance being undone, the plaintiff should have liberty to apply in relation to the order disallowing wider amendments if the defendants bring an application to strike out parts of the initial statement of claim as filed.
Limited amendments of the kind proposed will also avoid the resources of the court which went into settling the defence and counterclaim from being wasted. This approach will also serve to minimise any loss of confidence in the court as a result of acceding to an application of the kind made over four years after the statement of claim was filed and some six years into the life of the action.
The plaintiff should file and serve a further draft minute of proposed amended statement of claim within a short period. The intent of the amendments is to allow the plaintiff to optimally plead the current causes of action. The amendments:
(a)may include the Termination Amendments (subject to any refinement necessitated by the remaining paragraphs);
(b)may include any further minor, clarifying or typographical amendments;
(c)should not seek to introduce any further or alternate breaches nor any claim in unconscionable conduct; and
(d)as the reason for introducing the sub-lease issues was to raise the term as to use, should not include any of the Sub-Lease Amendments, nor Sub‑Lease Breach Amendments.
The action will be moved to docket management. I will convene a directions hearing after the defendant has had time to consider the further minute. At that time I will set a timetable for filing the amended defence and counterclaim. At this hearing I also propose to set a timetable for a mediation conference and to allocate trial dates.
I will hear from counsel as to costs.