Palatium Pty Ltd v Koren Holdings Pty Ltd

[2012] WASC 414

PALATIUM PTY LTD -v- KOREN HOLDINGS PTY LTD [2012] WASC 414

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2012] WASC 414
Case No:	COR:37/2012	Heard:	23 OCTOBER 2012
Coram:	MASTER SANDERSON	Delivered:	9/11/12
No of pages:	7	Judgment Part:	1 of 1
Result:	Application dismissed
Category:	B
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Parties:	PALATIUM PTY LTD ANITA ENGLISH KOREN HOLDINGS PTY LTD GEMMA KOREN RICHARDSON NATALIE RANGSIMA ARMITAGE JAMES AUSTIN DE BAUGHN MARY ELIZABETH HEALEY SIMON JEREMY FITZGERALD
Catchwords:	Practice and procedure Application for leave to amend statement of claim Turns on own facts
Legislation:	Corporations Act 2001 (Cth) Rules of the Supreme Court 1971 (WA)
Case References:	Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Hancock Family Memorial Foundation Ltd v Fieldhouse (2005) 30 WAR 398

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : PALATIUM PTY LTD -v- KOREN HOLDINGS PTY LTD [2012] WASC 414 CORAM : MASTER SANDERSON HEARD : 23 OCTOBER 2012 DELIVERED : 9 NOVEMBER 2012 FILE NO/S : COR 37 of 2012 BETWEEN : PALATIUM PTY LTD

First Plaintiff

ANITA ENGLISH
Second Plaintiff

AND

KOREN HOLDINGS PTY LTD
First Defendant

GEMMA KOREN RICHARDSON
Second Defendant

NATALIE RANGSIMA ARMITAGE
Third Defendant

JAMES AUSTIN DE BAUGHN
Fourth Defendant

MARY ELIZABETH HEALEY
Fifth Defendant

SIMON JEREMY FITZGERALD
Sixth Defendant

(Page 2)

Catchwords:

Practice and procedure - Application for leave to amend statement of claim - Turns on own facts

Legislation:

Corporations Act 2001 (Cth)

Rules of the Supreme Court 1971 (WA)

Result:

Application dismissed

Category: B

Representation:

Counsel:

First Plaintiff : Mr H Kremer
Second Plaintiff : Mr H Kremer
First Defendant : Ms E Hensler
Second Defendant : Ms E Hensler
Third Defendant : Ms E Hensler
Fourth Defendant : Ms E Hensler
Fifth Defendant : Ms E Hensler
Sixth Defendant : Ms E Hensler

Solicitors:

First Plaintiff : H Kremer & Co
Second Plaintiff : H Kremer & Co
First Defendant : Norton Rose Australia
Second Defendant : Norton Rose Australia
Third Defendant : Norton Rose Australia
Fourth Defendant : Norton Rose Australia
Fifth Defendant : Norton Rose Australia
Sixth Defendant : Norton Rose Australia

(Page 3)

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

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Hancock Family Memorial Foundation Ltd v Fieldhouse (2005) 30 WAR 398


(Page 4)

1 MASTER SANDERSON: This is the plaintiffs' application to amend a statement of claim in terms of a minute of re-amended statement of claim filed 23 October 2012. This matter has a checkered and unhappy history and it is necessary to detail that history in considering the present application.

2 These proceedings were commenced by way of originating process under the Corporations Act 2001 (Cth) on 16 March 2012. The action should not have been commenced in that way. It should have been commenced by writ. True it is, certain relief sought is under the Corporations Act but this is essentially a contract matter. Affidavits in support of the plaintiffs' application were filed with the originating process.

3 On the first return date of the originating process, orders were made for filing of pleadings prior to the filing of any further evidence. The plaintiffs filed their statement of claim on 23 April 2012. The defence and counterclaim was filed on 2 May 2012. The plaintiffs then filed an amended statement of claim on 14 May 2012. The amendments made were relatively minor - only two paragraphs were involved. An amended defence and counterclaim was filed on 1 June 2012 and the reply and defence to counterclaim were filed on 15 June 2012. That would mean pursuant to O 20 r 20 of the Rules of the Supreme Court 1971 (WA) the pleadings closed on 29 June 2012.

4 The plaintiffs then filed further evidence in support of the application on 14 May 2012. The defendants filed their affidavits in opposition on 3 July 2012. The plaintiffs' responsive affidavits were filed on 18 July 2012. So far, so good. The matter had progressed at an admirable pace.

5 The parties had discussions as to minutes for directions on the basis it was ready to entered for trial. On 7 August 2012 it came to me for directions. I understood, as did counsel for the defendants that it was only then necessary to make trial directions. However, counsel for the plaintiffs indicated he intended to make what he described as 'minor' amendments to the statement of claim. He sought general leave to file an amended pleading. I directed a copy of the proposed amended pleading be provided to the defendants' solicitors and adjourned the matter. On 4 September 2012 the plaintiffs filed a minute of re-amended statement of claim which made significant amendments to the pleading. The defendants objected. They maintained the new pleading significantly changed the case which was put against them. They also maintain the pleading was defective. When the matter next came before me, I

(Page 5)

programmed the application for leave to amend the statement of claim in terms of the minute provided by the plaintiffs through to a special appointment. The usual orders were made with respect to submissions. Without notice to anyone, the plaintiffs' solicitors prepared a document entitled 'Minute of Re-amended Statement of Claim' which bears a date of 18 October 2012 (the minute). According to counsel who appeared at the special appointment and who is the solicitor for the plaintiffs, a copy of the minute was dispatched by express post to the court on 18 October 2012. It seems a copy was also provided to the defendants' solicitors. I had not seen a copy of the minute prior to the commencement of the special appointment.

6 The defendants object to leave being given to the plaintiffs to amend their pleading and they object to the form of the minute. It is convenient to deal first with the form of the proposed pleading. It is the defendants' position, the original claim raised only two issues. They were:

1. Whether the resolutions passed by the first defendant adopting a new constitution were validly passed. This in turn depended on whether the first defendant had a constitution, who the directors of the first defendant were and what requirements for the convening of a meeting were.

2. Whether the first plaintiff purchased a share in the first defendant and was thereby entitled to beneficial ownership in one of eight designated sites in Lot 400 and a share in common with each of the remaining investors in two remaining designated sites.

7 The defendants now say that there are 11 separate issues raised in the new pleading. It is said the plaintiffs now allege:

1. they were unaware that the first defendant had a constitution (par 7 of the minute);

2. the proposal submitted to investors was submitted either by the first defendant and the second defendant or by the second defendant alone (par 8 of the minute);

3. the first defendant purchased the property in question as trustee for a syndicate of investors (par 10.1 of the minute);

4. the proposal contained certain express representations and implied representations (par 10, par 12 of the minute);

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5. the proposal was for the plaintiffs to purchase purple titles or for a purchase of a undivided eighth share and interest as a tenant in common in the property (par 10.5 of the minute);

6. there was a compromise and settlement of an unsecured debt owed by Paradise Valley Holdings Pty Ltd to the second plaintiff's husband which was assigned to the second plaintiff on 6 October 2011 (par 15.3 of the minute);

7. the first plaintiff agreed to compromise and settle an unsecured debt owed by Paradise Valley Holdings Pty Ltd to the first plaintiff on 6 October 2011 (par 15.4 of the minute);

8. the notice given by the second defendant at the meeting of the first defendant was insufficient for a number of reasons (par 21 of the minute);

9. new issues in respect of the constitution adopted at the meeting of shareholders as being contrary to the provisions of the proposal are pleaded (par 27.1 of the minute);

10. substantial injustice has been caused to the plaintiffs because of the alleged failure to provide purple titles and in adopting the constitution (par 34 of the minute); and

11. the constitution adopted by the second defendant purports to limit and restrict the defendants' liability under any costs orders made in the proceedings in favour of the plaintiffs (par 34.3 of the minute).

8 This analysis of the original version of the statement of claim and of the minute is taken almost verbatim from the defendants' submissions. It suggests that counsel has an understanding of what is actually pleaded. If that is so, she is well ahead of me. The proposed pleading is in my view incomprehensible. Quoting a paragraph at random may illustrate the point. Paragraph 11A is in the following terms:

In or around April 2011 RLE (Ramon Lawrence English a director of the first plaintiff and husband of the second plaintiff) acting on behalf of Paradise Valley Holdings Pty Ltd, the first plaintiff and for himself and the second plaintiff entered into an agreement with the second defendant on behalf of Koren and herself alternatively on her own behalf and with the second defendant on behalf of Koren and herself alternatively on her own behalf herself and her said husband as the only directors and shareholders of Koren.

(Page 7)

9 It is unnecessary to go any further. Leave could not be given to amend the statement of claim in the form of the minute. If amendment is to be allowed the new statement of claim must clearly set out the material facts upon which the claim is based. That might assist a resolution of the dispute. The present minute simply does not do what a pleading should do.

10 That then leads to the question of whether it is now too late to amend the statement of claim. Counsel for the defendants quite rightly referred to the High Court decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175. However it must be borne in mind that proceedings in this matter were only issued in March of this year - some eight months ago. To have a case such as this which does seem to be of some complexity ready for hearing inside 12 months is remarkable. Moreover, if I was to refuse leave to amend I would affectively be striking out the plaintiffs' claim. Based upon the extensive amendments foreshadowed in the minute the plaintiffs could not go to trial on the statement of claim as it stands at the moment. In Hancock Family Memorial Foundation Ltd v Fieldhouse (2005) 30 WAR 398, the Court of Appeal held a delay of eight years in formulating a statement of claim was acceptable. To affectively strike out an action after only eight months would not be in the interests of justice.

11 The plaintiffs should have leave to bring in a fresh minute. The solicitors for the plaintiffs should understand from these reasons the fresh minute needs to comply with the rules of pleading and be clear. If the minute is not acceptable there is no guarantee further leave to bring in another minute will be granted.

12 For the present, leave to amend in terms of the minute of 18 October 2012 will be refused. The plaintiffs should pay the defendants' costs of the application including reserved costs.