Pastina Pty Ltd v Hosanna Excelsis One Universal Church Incorporated - [2019] SADC 190

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PASTINA PTY LTD v HOSANNA EXCELSIS ONE UNIVERSAL CHURCH INCORPORATED
[2019] SADC 190
Reasons for Decision of His Honour Judge Slattery
13 December 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS
ESTOPPEL - ESTOPPEL BY JUDGMENT - ANSHUN ESTOPPEL
On 3 September 2019 the action was set for trial to commence on 11 December 2019.
On 26 November 2019, the defendant sought permission to withdraw an admission made in its defence filed in 2018.
Whether, and if so on what basis, leave should be given to the defendant to withdraw the admission.
Held:
Application dismissed with costs.
District Court Supplementary Rules Generally; Retail and Commercial Leases Act 1995 s 12, s 19, s 20, s 20B, s 26, s 33, referred to.
Juno Pharmaceuticals Pty Ltd v Millennium Pharmaceuticals Inc [2019] FCA 526; PPG Development Pty Ltd v Capitanio [2016] SASC 169; 126 SASR 307; Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59; AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; Diakou Nominees Pty Ltd v Gouger Street Pty Ltd [2017] SASC 72, discussed.

PASTINA PTY LTD v HOSANNA EXCELSIS ONE UNIVERSAL CHURCH INCORPORATED
[2019] SADC 190

On 3 September 2019, this action was set for trial to commence on 11 December 2019. The action has been judge-managed since that time. The Supplementary Rules have governed the steps to be taken prior to the trial commencing.
By application filed 26 November 2019, the defendant seeks the following orders:
1. An order permitting the Defendant to amend Paragraphs 7 and 10 of its Defence as per those paragraphs underlined and annexed to the Affidavit of Brendan Peter Connell dated 26 November 2019 and referred to as “Annexure A”.
2.That this application be made specially returnable to the next available date before a Judge;
3.Costs; and
4.Such further or other orders or directions as this Court deems fit.
The application is supported by a solicitor’s affidavit of Brendan Peter Connell sworn 26 November 2019, paragraphs 2-12 of which read as follows:
2.The within proceedings were commenced on 2 March 2018.
3.A defence and counterclaim were filed on 11 April 2018.
4.Response to defence was filed on 24 May 2018 and a defence to the counterclaim filed on the same day.
5.The defendant’s original solicitor was Andrew Jones who closed his practice at which point the defendants instructed Belperio Clark who filed a notice of acting in June 2019.
6.The solicitor acting on behalf of the defendants left the firm on 30 September 2019 and I commenced with the firm on 1 October 2019 and have handled the file since then.
7.The documents relating to the action are extensive and I read them over the next few weeks and discussed my views with my colleagues and with counsel for the defendant.
8.I reached the view that the defence was flawed and required amendment and obtained instructions to apply to amend the defence in the form annexed hereto and marked “Annexure A”.
9.This matter is listed for trial in this court commencing Wednesday 11^th of December 2019.
10.Given the relative proximity of the trial I ask that this application be made specially returnable since it relates to an amendment to the pleadings.
11.If this matter has been allocated to a Judge of the Court for hearing on the 11^th December 2019 then I respectfully request that this application be made returnable before that Judge.
12.If the matter has not already been allocated then I request that it be returned before a Judge of the Court or alternatively a Master.
The proposed defence seeks to withdraw an admission made in the defence filed on 11 April 2018 that the Retail and Commercial Leases Act 1995 (the ‘RCLA’) applied to a lease between the plaintiff as lessor and the defendant as lessee. The pleading of the plaintiff was that the RCLA applied. Whether the Act applied is a question of mixed fact and law and is ultimately a matter for me as the trial judge. The defendant pleads a counterclaim. Paragraph 19 of the defence pleads ‘the defendant relies upon the matters pleaded in its counterclaim.’ This is not a typical plea where it is intended that such a plea is put in the alternative so that, for example, the plea would usually seek, in the alternative, to set off so much of the counterclaim as is sufficient to satisfy the plaintiff’s claim.
On this application, there was no proposed amendment to paragraph 19 of the defence or of the counterclaim upon which reliance continued to be placed by the defendant. The counterclaim relies substantially upon the operation of the RCLA to ground the defendant’s alleged rights and claims which, if successful, would be set off against the plaintiff’s claim. From the outset, this was a substantive inconsistency in the approach of the defendant.
I heard the defendant’s application on 29 November 2019. At the time, I informed the parties that the defendant’s application was dismissed and that I would later publish my reasons. These are those reasons.
The plaintiff as lessor is the owner of a premise at 277-278 South Terrace, Adelaide. By a lease for a term of five years commencing 1 May 2010, the plaintiff leased those premises to the defendant for the rental prescribed by that agreement. On 25 September 2010, this lease was varied to include a further leasehold area. The plaintiff contends and the defendant admits that on and from 25 September 2010 the lease comprised the two areas. The plaintiff contends that the defendant entered into ‘… possession of the leased premises on 25 September 2010 …’[1] The defendant denies this contention and alleges that it entered into possession on 1 May 2010.
[1] Statement of claim at para 2; counterclaim at para 6.
In its pleadings, the plaintiff avers that the RCLA applies, given that the lease came to an end on 30 April 2015, and as such the defendant became a holding over tenant and did so for greater than six months; under the RCLA, a further five-year term operates. Apart from its admission about the application of the RCLA, the defendant denies those averments and that if such an obligation arises, contends that it is wrong at law and that the plaintiff is estopped from asserting a new lease. There is no particularity of this estoppel plea and no application has been made for the provision of further particulars.
These contentions and responses set the ground for this application. The defendant’s defence admits the application of the RCLA but pleads that even though it was a holding over tenant, under s 20B of the RCLA and the settled common law no new five-year lease arose. It is not necessary to canvass the balance of the Statement of Claim because it does not inform this decision.
I have earlier mentioned the counterclaim of the defendants. It pleads that the plaintiff has, inter alia, breached ss 19, 12, 26 and 33 of the RCLA and, in part, these breaches form a basis of the counterclaim in the amount of $102,758.
In its application, the defendant now seeks to withdraw its admission about the application of the RCLA to the subject lease. It first contends that a primary consideration which potentially overwhelms other considerations is that, if it is correct, then the amended plea may defeat the plaintiff’s claim for unpaid rent in the sum of $365,742.77. This is because if the defendant was only a tenant at will at the time it abandoned the leased premises, then the claim of the plaintiff would be limited to one month’s rental. I consider that this is only one possible effect of a successful application and does not properly address a range of other issues of merit that weigh in the balance of the exercise of the Court’s discretion (even accepting the best position for the defendant). My task is to weigh all considerations in the balance and then to arrive at a decision; that is not a narrow process.
The second contention was that in the lease itself, under clause 1.1.19 ‘Permitted Use’, the defendant was not permitted to operate a retail shop. That clause provides as follows:
1.1.19 ‘Permitted Use’ means the use to which the Lessee shall put the Demised Premises being the use mire particularly described in Item 2 of annexure A;
Item 2 of Annexure A of the lease defines the permitted use and provides as follows:
Community Church and Education but excluding the sale of goods to the public by retail, the provision of services to the public and the negotiation with the public for the supply of services.
As so often is the case, merely because a particular use is prescribed within a lease does not logically mean that other forms of activity have not been carried on upon the leased premises.
The defendant then contends that absent the amendment, the plaintiff might be paid almost half a million dollars to which it was not entitled, ‘… in truth and justice …’ I found it difficult to make much of this submission except that the defendant contends that it is a matter to be weighed in the balance of the interests of justice. Many litigants have been ordered to make payment of amounts of money to others which in their own sense of ‘truth and justice’ they should not have to pay. That is why the Court is called upon to objectively consider the relevant facts, apply settled principles of law and to reach a decision.
For all of these reasons, the defendant contends that it is clearly and obviously in the interests of justice that the amendment be allowed. It contends that there is no reason to suppose that any such amendment will result in an adjournment of the trial. The plaintiff strongly contests this assertion which is made by the defendant without any supporting affidavit material apart from a cursory assertion by the solicitor Mr Connell that this would be the position.
On the application for permission to withdraw an admission from a defence under 6DCCR 158,[2] both parties rely upon the decision of Besanko J in Juno Pharmaceuticals Pty Ltd v Millennium Pharmaceuticals Inc (‘Juno’).[3] In that case, Juno commenced proceedings concerning allegations of breach of a number of patents against the defendant Millennium. Millennium brought a cross-claim that alleged Juno’s generic products infringed certain patents. Juno defended the cross-claim however, in doing so, made admissions. It sought to withdraw those admissions. At [2], his Honour said:
[t]he catalyst for Juno’s change of position is an opinion Juno has obtained from an expert it retained in relation to the invalidity issues to the effect that Juno’s admission(s) is wrong or likely to be wrong.
[2] 6DCCR 158 - Withdrawal of admissions
A party may not withdraw an admission without the Court's permission.
[3] [2019] FCA 526, 26 April 2019.
The proceedings were commenced on 10 August 2018. On 24 September 2018, the trial date in the proceedings was set for 22 July 2019. The application to withdraw the admission was commenced on 5 March 2019.
The parties rely upon that which fell from Besanko J at [38] as follows:
The overriding consideration in determining whether to grant leave to withdraw an admission is the interests of justice. In determining where the balance lies, a number of matters which overlap and interact are relevant. They are the circumstances in which the admission came to be made, the strength of the case now advanced that the admission is or may well be incorrect, whether the applicant has done all he or she could do to establish that the admission is incorrect, whether the applicant has acted in a transparent and straightforward fashion, any delay in making the application to withdraw the admission, the significance of the admission to the respective cases of the parties, prejudice to the applicant if the admission is not withdrawn and to the respondent if it is, general prejudice to the applicant and the respondent and finally, case management principles as discussed in AON Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 and embodied in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). …
I shall consider this passage in detail later in these reasons.
The plaintiff relied upon the decision of Doyle J in PPG Development Pty Ltd v Capitanio (‘PPG Development’).[4] In that case, a trial was conducted in the Magistrates Court. The third scheduled hearing was adjourned for a period of about six to eight weeks. The trial hearing had commenced, the plaintiff had closed its case and the defendant had opened its case. The defendant then sought an adjournment of the trial to locate a witness.
[4] [2016] SASC 169; 126 SASR 307.
Then on the date of the resumed trial and without any prior notice, an application was made by counsel for the defendant who appeared for the first time, for leave to amend the defendant’s defence in order to provide to the defendant a substantive answer to the whole of the plaintiff’s claims. If the order was granted, it was accepted that it would be necessary to adjourn the trial, to amend pleadings, to require witnesses to give their evidence again and in the large, for there to be a rehearsal of the whole trial. The amendment was allowed by the Magistrate, the trial was adjourned again and between the date of the allowance of the amendment and the next trial date, the plaintiff brought an appeal against those orders to the Supreme Court. Doyle J allowed the appeal, discharged the order of the Magistrate and the matter was remitted for further hearing.
In his judgment, Doyle J considered the nature and importance of the amendment. His Honour accepted that, as is contended here by the defendant, the proposed new defence provided almost a complete defence to the claim of the plaintiffs. His Honour accepted, as I do here, that the question is at least reasonably arguable. Doyle J decided that the discretion to allow the amendment had miscarried inter alia because the Magistrate failed to properly take into account the prejudice suffered by the plaintiff in allowing such a late amendment, which would again require an adjournment of the trial in the circumstances as above described.
In the case at bar, in relation to the stage of the litigation and the impact of the disruption caused by the proposed amendment, the defendant contends that different from the facts in PPG Developments, there would be no adjournment of the trial because there is ample time for the point to be put in issue. It contends that it is a straightforward point of interpretation given that it turns entirely upon the permitted use of the lease. I consider that the question of the effect of the permitted use under the lease is not necessarily a point about which this whole matter will turn. This Court is quite familiar with circumstances where a leased premise is put to a use outside of the permitted use. Such issues come to a head generally when, for example, a lessor attempts to exercise rights because of a refusal by a lessee to comply with the lessor’s insistence upon such permitted use.
I am unable to accept the otherwise unsupported submission of the defendant that there would not be a need to adjourn the trial because there is ample time to meet the more narrow point sought to be put in issue. I do not accept that the relevant issues are as narrow as the defendant contends. The trial is some ten days away. I accept that if the defendant is permitted to make the amendment there will be a significant amount of work to be done in amending pleadings, filing further pleadings and making further disclosure. For example, the plaintiff will need to reassess its pleadings in relation to the counterclaim, which is not pleaded in the alternative and from the outset, there was no application for its amendment. I will discuss those matters later in these reasons.
In relation to delay generally, the defendant submits that the delay is a result partly at least of ‘fresh eyes’ of the solicitor for the defendant who took over the matter in 2019. The question of ‘fresh eyes’ was a matter addressed by Doyle J in PPG Development at [70]. There his Honour said:
… Certainly the courts should not be too willing to permit amendments simply because they are the product of further or more detailed consideration being given to an issue by a party's legal representative, or the product of a fresh set of eyes. As to this last consideration, while a relevant consideration, the retention of new counsel should not operate to reset the litigation clock or otherwise give the party in question a licence to amend. To so hold would be to undermine the approach required by Aon Risk Services.
In its submissions, the plaintiff contended that the application is too late. First, the plaintiff contends that under 6DCCR131(4), after the action has been listed for trial, no interlocutory application can be made without the permission of the Court and that permission will only be granted if the Court is satisfied that special circumstances justify the grant of permission. No permission was sought, no special circumstances were identified and it should be refused. On the question of withdrawal of admissions, the plaintiff also relied upon the decision of Besanko J in Juno at [38]. The plaintiff made particular reference to the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (‘Aon’),[5] which was considered in detail in the decision of the Full Court of the Supreme Court of South Australia in Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59, particularly by Bleby J at [46]. A number of considerations discussed by Bleby J in his Honour’s decision arise for consideration on the question of the withdrawal of admission, as discussed by Besanko J in Juno.
[5] [2009] HCA 27; (2009) 239 CLR 175.
The plaintiff contends that this application has been made on the eve of trial upon a position for which the defendant has aggressively contended since the commencement of the proceedings. From as early as 28 February 2018, the defendant contended that the plaintiff had not appropriately dealt with bond money and lodged it with the appropriate government authority. It threatened an action under the RCLA and gave notice to the plaintiff that it would seek indemnity costs if successful on the action.
One of the defendant’s principal contentions has continually been that the RCLA applied to the defendant’s lease with the plaintiff. On 24 July 2019, a solicitor for the defendant swore an affidavit that was filed in Court in which he deposed that he had reviewed the pleadings in the matter and he had retained counsel to give advice. A directions hearing was held on 29 July 2019 and one of the orders made concerned the filing of any answering experts’ reports by 30 August 2019. The matter was then to proceed to a listings conference which was held on 3 September 2019 and the trial date of 11 December 2019 was set. No pleadings issues were raised in the course of those attendances. The fixing of the trial date occurred some months after the review of pleadings made by the solicitor and after the retainer of counsel.
The defendant did not make its application until late November and it has not given any explanation about why this issue was not identified earlier. The defendant has not filed any affidavit material explaining this chronology and these developments. If a trial date is lost as a result of this application, then it is apparent that public resources will be wasted for the obvious reasons that another trial could have been run on that date.

On the need to revisit interlocutory processes, the plaintiff contends that if the application is granted and the defendant is permitted to now deny that the RCLA has application, it would be necessary for the plaintiff to amend its pleading in order to plead material facts in support of its case that the RCLA does in fact apply. There would then need to be further amended pleadings in response from the defendant. It may then be necessary for the plaintiff to file a fresh reply to the defendant’s defence alleging, for example, matters of issue estoppel.
The plaintiff contends that in those circumstances, it would be necessary to revisit interlocutory processes, particularly about disclosure and the gathering of further evidence by use of, for example, applications for non-party disclosure to obtain necessary evidence to respond to the defendant’s defence.
It would then be necessary to consider whether the trial date would be lost. The plaintiff contends that it could not be ready for trial in those circumstances at least for a number of months. In summary, the plaintiff contends that it will need a broad cross-section of further disclosure before it could properly plead a reply to any such amended defence, directed in the main to the conduct of the defendant of shop premises within the leased area. It contends that as a matter of fact the defendant was operating a retail shop.
Another consideration is whether there has been a satisfactory reason given for the delay in applying. There has been no affidavit evidence put forward apart from Mr Connell deposing that he became solicitor on file in the firm of Belpario Clark and reviewed the matter in about October 2019. It was after his review that this application was commenced.
The plaintiff contends that the defendant has failed to put forward any affidavit from an officer of the defendant providing any explanation about the attitude taken by the defendant on the application of the RCLA. There is no evidence before the Court about any reasons for or the timing of the change of attitude on the issue. This, for example, is to be compared with the material before Besanko J in Juno where a Dr Robertson had expressed an opinion which led to the change of view of the defendant Millennium Pharmaceuticals. Having considered that evidence, his Honour decided that there was a considerable body of evidence against that opinion and there was evidence about the way the parties had proceeded in light of the admissions made. Although his Honour could not make much of that point in the matter before him, in the case at bar, there is no evidence before the Court which explains the original position of the defendant and explains how the attitude of the defendant has changed. The significance of the discussion of Besanko J at [42] in Juno is that here, the defendant continues to press the counterclaim in its current form, which relies upon the application of the RCLA.
On the issue of undermining confidence in the administration of justice, the plaintiff points to the fact that after contending in open correspondence on 23 April 2018, that the plaintiff’s claim for a five-year lease must fail, the defendant then took an application for summary judgment which succeeded in first instance before a Magistrate. The plaintiff appealed and succeeded on appeal.[6] The plaintiff contended that the appeal decision of Doyle J is binding upon me as trial Judge. His Honour was there deciding whether an argument that s 20B of the RCLA applied to the lease as a result of the holding over that commenced on 1 May 2015 and that none of the exceptions to the extending effect of s 20B(2) had application, was sufficiently arguable to prevent summary judgment being ordered against the plaintiff on the relevant aspect of its claim.[7] That is the ratio of that decision.
[6] Pastina Pty Ltd v Hosanna Excelsis One Universal Church Inc [2019] SASC 18.
[7] See [66] of the judgment of Doyle J.
The plaintiff argues that the defendant took the strategic decision to make its application for summary judgment under the application of the RCLA, succeeded at first instance and failed on appeal. It was prepared to delay the matter coming to trial by that application but now seeks to reverse its own decision and contend that the RCLA has no application at all. If it is successful, it will have then made another decision which inevitably delays the trial for a further period which would undermine the interests of justice. Those submissions were also made in support of the contention of the plaintiff that the defendant has not acted in a transparent and straightforward manner. The plaintiff contends that the defendant has ‘… stridently asserted its righteous position in the litigation …’ whilst relying upon the application of the RCLA, taken the application for summary judgment but now wishes to change that position and to disclaim any application of RCLA. It has been reviewing the issues under the pleadings since July without identifying any of the issues that it was reviewing, of the advice that it would seek or any particular aspect of the pleadings upon which it was seeking advice. It then changed its view and brought this application at the very last minute.
The plaintiff also contends that factually there is sufficient evidence before the Court to at least justify the assertion in any pleading that it would make in response that a retail shop was being conducted from the premises. The plaintiff points to a number of documents which are contained in the book of documents[8] used by the plaintiff in support of its opposition to the application. The first is page 64: this is an email from the defendant to the plaintiff referring to the shop premises. The second at pages 66-68 of this bundle concerning the disposition of services within the building for the conducting of a business from a shop and in particular the conduct of a business called the ‘Outreach Shop’. Reference was then made to page 65, which is an email between the defendant and the plaintiff dated 29 February 2016 making reference to the ‘shop’ (of the defendant). Pages 60-62 of the bundle are printouts of the webpages from the website maintained by the defendant that contain links to its bridal shop business conducted on the premises and page 59 of the same bundle is a printout of the historical webpage of the defendant disclosing its bridal shop business. At pages 60-62 of the bundle, reference is made to two ‘Hosanna’ shops. The first is called ‘Beautiful Bride on South’ and the second is called ‘Beautiful Things on South’. A reasonable inference arises that two different types of business are dealt with in these shops. It may be one shop divided into two areas, but the point is still the same. None of these matters have been addressed by the defendant in its submissions or in its affidavit material.
[8] FDN 29.
The plaintiff then submitted that however these shops commenced and in whatever form, there is sufficient evidence to form a view that, at least by 2016 or perhaps earlier, the premises were used as a retail shop. There was the outward appearance of a retail shop that invited the negotiation of retail business from the public. This aspect of a retail business is put in contention by the defendant and Mr Hoile informed me from the bar table that he was instructed the defendant offers clothes and services for sale to the public but there is no sale, because a purchaser is asked to make a donation. There was no affidavit evidence to this effect before the Court. It was not clear to me then how this arrangement could operate in the background of the Commonwealth taxation arrangements, but that is likely a matter for another day. I will assume that the defendant is a charitable organisation. It will have books of account in relation to the shop and it will need to have made records of the donations. One issue is how those sales were recorded. All of these will need to be disclosed, examined and instructions taken. There may need to be expert evidence on them. The important issue is that a factual controversy surrounds these arrangements and it will require resolution if the amendment is allowed. For all of these reasons, I formed the view that the trial of the action will inevitably need to be adjourned to give sufficient time to pursue those matters. These factual disputes lead to the necessity for there to be further pleadings on the plaintiff’s part; the plaintiff would wish to plead out why it was a retail shop and the defendant would then be called upon to plead why, for example (and if this is its case), it was not a retail shop. This would become a factual dispute to be resolved at trial.
The plaintiff submitted on the question of the historical narrative and the permitted use that it does not matter how a shop started off; it may well be a shop in some portions of its life under the terms of the lease. Reliance was placed on the decision of Stanley J in Diakou Nominees Pty Ltd v Gouger Street Pty Ltd.[9] The plaintiff submitted that if the amendment were allowed, there would be a significant dispute between the parties as to whether this was a retail shop. This would be after the amendment of the pleadings, further disclosure and perhaps disclosure from non-parties to the proceedings. That also raises, for example, the application of s 12(5) of the RCLA and whether, if it was a retail and commercial lease, a disclosure statement was given. There is no evidence before me on that topic.
[9] [2017] SASC 72 at [46].
The plaintiff submitted that the defendant was taking an inconsistent position because it made no application to amend its counterclaim which relied upon the operation of those sections of the RCLA that I earlier described. No thought appears to have been given to the difficulties raised by this position and the failure to include a plea that the pleaded counterclaim is as an alternative plea. In its submissions in reply, the defendant said that these pleadings in the counterclaim would need to be deleted so as to expunge any reference to the RCLA. It was difficult to understand this submission because it would only be necessary to plead a set off of the counterclaim, as part of an alternative case to a defence. The defendant appears not to have given any thought to this possibility.
The plaintiff would also seek to plead in its reply a bar to the defendant under the principles of issue estoppel or Anshun estoppel and that the defendant is estopped from asserting that it is not a retail shop. Two matters are identified. The first is the conduct of the defendant before the Magistrate and on appeal. The second, the factual issue surrounding the actual trading in the shop and, inter alia, this will require a survey of the actual customers of the shops. All of this would require the pleading of particulars and that in turn would require further disclosure including, for example, about all of the transactions undertaken at the shops and then the testing of those transactions in evidence. All of those matters would have to be run to ground before another trial could be held. It is impossible to predict how long it would take to chase up each or a sufficient number of persons with whom the shops have dealt to identify the nature of the business being conducted at the shops.
The plaintiff also criticised the fact that in his affidavit, the solicitor Mr Connell did not substantially deal with the issue of delay and that consistent with the description given by Mr Hoile, it was only a cursory discussion about delay. Mr Connell’s firm became solicitors in June 2019 and it was around that time Mr Hoile was retained as counsel. It was not until later that ‘fresh eyes’ were brought to the task and a decision was made to seek permission to withdraw the admission. There was no information deposed to about that decision. That information was before Besanko J in Juno, where his Honour was able to assess it, upon its merits. I refer in particular to the discussion of his Honour at [40] et seq. The plaintiff informed me that the first intimation of any application for withdrawal of an admission was the Friday 22 November 2019 through a letter sent after hours informing the plaintiff’s solicitors that the application would be brought. There was no explanation about why that decision was made so late and so close (14 days) prior to the date for trial.
In summary, the position of the plaintiff is that if the application is allowed, it will be necessary to significantly replead the plaintiff’s case, to raise matters in reply or alternatively in a fresh statement of claim to address the matters now relied upon by the defendant, to gather further evidence concerning the conduct of the “shops”, to seek and obtain further disclosure and including non-party disclosure, and then to consider all of the evidence afresh in light of the position on the pleadings.
That will require a review of the pleadings, the gathering of evidence and further applications to the Court. All of that will necessitate an adjournment of the trial. I consider that the plaintiff is correct in this submission. As earlier explained, the defendant has not yet given any attention to the question of the counterclaim and the existing counterclaim had been included as part of the proposed further pleading in error. Counsel indicated that it would be necessary to amend the counterclaim but was unable to inform me into what form. No leave was sought to file a proposed further counterclaim.
I turn then to the relevant considerations about whether leave should be given to withdraw an admission. I will address the considerations raised by Besanko J in [38] of his Honour’s judgment in Juno. On the question of the balance of interests, the first issue for consideration is the circumstances in which the admission came to be made. There is no evidence on the point. All I am told is that a former solicitor was acting at the time the admission was made. However, as I have earlier indicated, the defendant has aggressively put its case on the RCLA both within its pleadings and on its application for summary judgment. The second is the strength of the case now advanced that the admission is or may well be incorrect. As I have indicated, the admission is in relation to an allegation of mixed fact and law. I will not decide in this application whether or not the admission is correct. It may well be incorrect, but I have not heard full submissions on the point. This in turn raises questions of fact that require resolution. On the plaintiff’s case, the questions of fact will include the conduct of the shops in the premises. The next consideration is whether the defendant has done all it could to establish that the admission is incorrect. There is no evidence on the point. There is no evidence about how the admission came to be made, what was done and there is no evidence similar to the evidence before Besanko J. There is only a cursory affidavit of Mr Connell which does not address any of these issues.
The next consideration is whether the applicant has acted in a transparent and straightforward fashion. The applicant has not acted in a transparent and straightforward fashion because it has strenuously put its case on the basis of the application of the RCLA but now, 14 days before trial, it has decided that it wants to change direction completely and allege that the RCLA has no application to the factual circumstances of the case. This will excite applications for further and better pleadings, for amended statements of claim, defences, replies and the possibility of a rejoinder. There will be applications for further and better disclosure and most likely non-party disclosure.
The next consideration is the delay in making the application to withdraw the admission. There is no evidence about why there has been a delay since at least June of 2019 to November 2019 about making an application to withdraw the admission. I consider that there is no proper explanation for that delay.
The next consideration is the significance of the admission to the respective cases of the parties. The defendant contended that the admission is significant and similar submissions were made by the plaintiff. However, as I have already indicated, the question of whether or not the Act applies is a question of mixed fact and law which will be resolved by me as the trial Judge. I accept that the admission is significant for both sides. The next consideration is the prejudice to the defendant if the admission is not withdrawn and to the plaintiff if it is. There will be significant prejudice to the plaintiff in costs and other difficulties if the admission is withdrawn. The defendant claims significant monetary prejudice if it is not withdrawn. The defendant puts its case that, in effect, the plaintiff must succeed if it is not unable to withdraw the admission. However, as I have earlier said, this is a question of mixed fact and law and is a matter for the trial Judge. The same comments apply in relation to aspects of general prejudice.
The final consideration is the case management principles as discussed in Aon. I have earlier discussed these and I consider that there has been undue delay in making the application, there will be wasted public resources in granting the amendment, it will be necessary to revisit interlocutory processes and there will be significant inefficiencies arising from that process; the trial date must be vacated; there has been no explanation of any satisfactory reason for the delay in applying; the point raised by the amendment is potentially a matter that will be raised at trial in any event on the question of the application of the Act. There will be strain and uncertainty imposed on litigants and the further delay will undermine confidence in the administration of civil justice. I consider also that significant additional costs are likely to be incurred.
In the exercise of my discretion and notwithstanding all of the submissions put by the defendant, I am satisfied that the appropriate exercise of my discretion is to dismiss the application of the defendant.
At the time that I informed the parties of my decision, I gave leave to the defendant to bring the application. I did so because on the facts before me and in light of the position of the defendant, the application required ventilation before the Court about the urgent considerations that are peculiar to this application. As well and in a general sense the Court should be slow to shut out a party in the position of this defendant.
My orders are as follows:
1Under 6 DCCR 131 (4) and (5), leave is granted to the defendant to bring the application to amend its defence (FDN 24).
2The application is to be marked ‘specially returnable’.
3The defendant’s application is dismissed.
4Order that the plaintiff have the costs for the application with a certificate for counsel including senior counsel.