DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PATELIS v SANDER & ORS (No 3)
[2021] SADC 146
Judgment of his Honour Judge Burnett
15 December 2021
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - PARTICULAR PLEADINGS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - OTHER MATTERS
The respondent has sought leave to file an amended defence and leave to file cross claims against the interested parties, Tolis & Co and Mr Munt. This application was heard following determination of a related application in which the respondent sought the production by the applicant of certain privileged material on the basis that the applicant had waived privilege to that material. The privileged material related to the conduct and advice given by Tolis & Co and Mr Munt to the applicant.
On 21 May 2021, I ruled that there had been no waiver of privilege by the applicant. The respondent then proceeded with this interlocutory application.
The applicant does not oppose the amendment of the defence, although Tolis & Co and Mr Munt both oppose leave being granted to file the cross claims.
Held:
1. The respondent is granted leave to file the proposed amended defence. The Court is required to rule on the relief sought on the pleaded case of the parties. Banque Commerciale SA (en liq) v Akhil Holdings Ltd, (1991) 169 CLR 279 and Kien Dan Luu Pty Ltd v AMP Society Ltd (1999) 75 SASR 345 applied. If the parties raise no objection, then the pleadings define the dispute to be determined by the Court.
2. There is a proper basis for the pleaded cross claim against Tolis & Co. It is not merely speculative. The normal discretionary principles set out in Aon Risk Services Australia Ltd v ANU, [2009] HCA 27; (2009) 239 CLR 175 and Channel Seven Adelaide Pty Ltd v Manock, [2010] SASCFC 59 do not suggest that leave should be refused. Any prejudice suffered by Tolis & Co in defending the cross claim because it cannot use the privileged material of the applicant is relevant to a stay application rather than the application for leave to amend: Arnold Bloch Leibler (a firm) v Slater & Gordon Limited [2020] FCA 1496 referred to.
3. Leave to bring a cross claim against Mr Munt is refused because there was not a reasonable basis for the allegations made as to the advice given by Mr Munt. No reasonable inference could be drawn as to the substance of the advice given by Mr Munt: Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors [2020] SASC 161 applied.
4. The mere fact that advice has been received from Mr Munt and that following receipt of that advice the administrators of the applicant elected not to make Nationwide a named defendant in the action, nor make claims against Nationwide, does not give rise to a reasonable inference as to the substance of that advice: Bennett v Chief Executive Officer of the…
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- AGLC
- Patelis v Sander (No 3) [2021] SADC 146
- Case
- [2021] SADC 146
- Decision Date
CaseChat Overview and Summary
The court was tasked with determining whether the respondent's proposed amendments to the defence were justified and whether the cross-claim against Tolis & Co and Mr Munt were properly based. The key legal issue was whether the amendments to the pleadings were appropriate and whether the cross-claims were supported by a reasonable basis.
The court granted the respondent leave to amend their defence, finding that the pleadings sufficiently defined the dispute to be determined. The court also allowed the cross-claim against Tolis & Co, as it was not speculative but based on a proper foundation. However, the court refused leave to bring a cross-claim against Mr Munt, as there was no reasonable basis for the allegations regarding the advice given by him. The court emphasised that the mere receipt of advice and subsequent actions by the administrators did not create a reasonable inference about the substance of the advice provided by Mr Munt.
The court's decision allows the respondent to proceed with their amended defence and cross-claim against Tolis & Co, while disallowing the cross-claim against Mr Munt. This ruling clarifies the scope of permissible amendments to pleadings and the standards required for cross-claims in civil proceedings.
Orders
Orders of the court
Held:
1. The respondent is granted leave to file the proposed amended defence. The Court is required to rule on the relief sought on the pleaded case of the parties. Banque Commerciale SA (en liq) v Akhil Holdings Ltd, (1991) 169 CLR 279 and Kien Dan Luu Pty Ltd v AMP Society Ltd (1999) 75 SASR 345 applied. If the parties raise no objection, then the pleadings define the dispute to be determined by the Court.
2. There is a proper basis for the pleaded cross claim against Tolis & Co. It is not merely speculative. The normal discretionary principles set out in Aon Risk Services Australia Ltd v ANU, [2009] HCA 27; (2009) 239 CLR 175 and Channel Seven Adelaide Pty Ltd v Manock, [2010] SASCFC 59 do not suggest that leave should be refused. Any prejudice suffered by Tolis & Co in defending the cross claim because it cannot use the privileged material of the applicant is relevant to a stay application rather than the application for leave to amend: Arnold Bloch Leibler (a firm) v Slater & Gordon Limited [2020] FCA 1496 referred to.
3. Leave to bring a cross claim against Mr Munt is refused because there was not a reasonable basis for the allegations made as to the advice given by Mr Munt. No reasonable inference could be drawn as to the substance of the advice given by Mr Munt: Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors [2020] SASC 161 applied.
4. The mere fact that advice has been received from Mr Munt and that following receipt of that advice the administrators of the applicant elected not to make Nationwide a named defendant in the action, nor make claims against Nationwide, does not give rise to a reasonable inference as to the substance of that advice: Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237; (2004) 140 FCR 101, Adelaide Steamship Co Ltd v Spalvins [1998] FCA 144; (1998) 81 FCR 360 applied.
5. The pleading of a question of law in the statement of claim or the making of submissions as to the law in other interlocutory arguments do not give rise to a reasonable inference as to the substance of the advice given by Mr Munt. This was not a case where there were reasonable alternative competing hypotheses and the evidence adduced at trial would determine which hypothesis was to be accepted. In the present case, even if the cross respondent did not adduce any further evidence at trial, the hypothesis advanced by the respondent was merely speculative and lacking in foundation such that it did not form a proper basis for the pleading: Adelaide Brighton Cement Ltd v Hallett Concrete Pty Ltd & Ors (No 2) [2021] SASC 56 referred to.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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