Permanent Custodians Ltd v Adzioski
[2013] NSWSC 804
•18 June 2013
Supreme Court
New South Wales
Medium Neutral Citation: Permanent Custodians Ltd v Adzioski [2013] NSWSC 804 Hearing dates: 18 June 2013 Decision date: 18 June 2013 Jurisdiction: Common Law Before: Davies J Decision: First and Second Defendants' applications to serve amended cross-claims in the form requested refused.
Catchwords: PROCEDURE - amendment - late application to amend cross-claims to introduce new causes of action - application made one month prior to date for hearing - matter fixed for hearing months earlier - no explanation for why application not made at earlier time - application refused Legislation Cited: Australian Securities And Investments Commission Act 2001 (Cth)
Civil Procedure Act 2005
Contracts Review Act 1980Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Commonwealth Bank of Australia v Susan Hannaford Pty Ltd (No. 2) [2013] NSWSC 574Category: Interlocutory applications Parties: Iden Loan Services Pty Ltd (Plaintiff)
Pavle Adzioski (First Defendant)
Blaga Adzioski (Second Defendant)Representation: Counsel:
A Cheshire (Plaintiff)
R Jefferis (First Defendant)
J Merkel (Second Defendant)
Solicitors:
McLachlan Thorpe Partners (Plaintiff)
Brennan Legal (First Defendant)
Northern Suburbs Lawyers (Second Defendant)
File Number(s): 2009/292000
Judgment
This is an application by both Defendants to file amended cross-claims. It was necessary for amended cross-claims to be filed because a few months ago, by arrangements made between Permanent Custodians (the former Plaintiff), Iden Loan Services (the former Third Defendant), Deutsche Corporation and Anthony Jones (former cross-defendants to a cross-claim filed by Iden), Iden took an assignment of the Plaintiff's cause of action against the First and Second Defendants, and abandoned its cross-claim against Deutsche and Mr Jones. (Later references in this judgment to Mr Jones are references both to Deutsche and to Mr Jones.) The existing cross claims that had been filed in September 2011 by the First and Second Defendants named Permanent as the cross-defendant. Iden now needed to be substituted for Permanent in those cross-claims.
I was provided with a proposed cross-claim by the Second Defendant. I am told by Mr Jefferis for the First Defendant that he would seek to file a cross-claim in the same form.
The cross-claims that are sought to be filed, however, go well beyond the formal amendments to the names of the parties. They purport to introduce new causes of action which are said to arise now because Iden, as the 0Plaintiff in the proceedings, has its conscience bound by reason of its acts and omissions at the time of the making of the loan.
The first time that there was a suggestion that cross-claims would need to go beyond formal amendments was on 28 May 2013. The basis was said to be new documents that had been obtained from Iden. I directed that proposed drafts of the cross-claims be served on Iden by 4 June and that any further evidence regarding the proposed amendments were to be filed and served by 14 June. In fact, no evidence in relation to the amendments has been filed. I have simply been informed of certain matters from the bar table.
Whilst s 64 of the Civil Procedure Act 2005 gives a wide discretion to the Court to allow any amendments that are needed so that the real issues can be determined, it is necessary in deciding any application for amendment to have regard to s 58 CPA for the purposes of determining what are the dictates of justice in the particular case. In considering an amendment the Court must have regard to the provisions of ss 56 and 57 of the Act and may have regard to a number of matters enumerated in s 58.
One of those matters is the degree of expedition with which the respective parties have approached the proceedings. Another matter is whether, in a situation where there has been a lack of expedition in approaching proceedings, that lack of expedition has arisen from circumstances beyond the control of the respective parties. I recently discussed the principles in relation to applications for amendment at a late stage in Commonwealth Bank of Australia v Susan Hannaford Pty Ltd (No. 2) [2013] NSWSC 574.
It has variously been suggested that the need for the proposed amendments arises from the service by Iden of its evidence in the proceedings in March and by the service of an affidavit by Mr Jones in recent times. When I asked Ms Merkel, who appears for Mrs Adzioski, to identify the parts of her client's proposed cross-claim that flowed from the late service of Mr Jones' affidavit, she directed my attention only to paragraph 26. That causes me to make reference to the form of the cross-claims which were filed on 15 September last year.
Those cross-claims were against Permanent only. They raised matters under the Contracts Review Act 1980 and matters of unconscionability arising from the Australian Securities And Investments Commission Act 2001 (Cth).
The pleadings set out at some length matters that involved Mr Jones and Iden and concerned acts and omissions of Mr Jones and Iden and the state of knowledge of those parties. By reason of those matters, it was asserted that those acts, omissions and the knowledge were attributable to the Permanent in the circumstances because of the relationship between the Permanent and those parties. No cross-claim was sought to be brought against either Iden or Mr Jones at that time or at any time up until the matter was raised on 28 May.
Although it is entirely understandable that the existing cross-claims by the First and Second Defendants would need to be amended by reason of Iden's new role in the proceedings, cross-claims going beyond formal matters should not be permitted to be brought at this late stage.
These proceedings were set down for hearing on 9 October last year for hearing this year on 22 July. The proceedings therefore are due to be heard in a little over a month. The proposed cross-claims introduce new causes of action, in particular in relation to paras 2 to 5, paras 36 to 48 and paras 52 to 56 although the claim made in paras 52 to 56 might be thought to be a mere expansion of the unconscionability claim already alleged against Permanent Custodians.
It seems to me that the material that was contained in those new areas of the proposed cross-claims was always material that was able to be brought in cross-claims against Iden. The only explanation for not having brought cross-claims against Iden previously was that Iden now has its own conscience bound and that, in any event, forensic decisions were made previously in the conduct of the case. If these amendments are now allowed to be permitted there is a very strong chance that the matter will not properly be ready for trial on 22 July.
I further have regard to the fact that throughout the course of the preparation of these proceedings, which commenced as long ago as 13 January 2009, there have been lengthy delays on the part of the Defendants in complying with directions made by the Court. The absence of an adequate explanation of why these amendments are now necessary and could not have been brought at an earlier time causes me to be of the view that the application to amend in the form proposed should not be permitted.
I have regard also to what was said in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at 951. In that regard I note the Second Defendant's submission that no prejudice will be occasioned by the proposed amendments. I reject that submission. The introduction of new causes of action against a party a month before a hearing creates presumptive prejudice. Aon suggests that focusing on matters of prejudice and whether such prejudice can be compensated in costs is not the correct approach. Parties are bound by forensic decisions they take or are taken on their behalf by their legal advisers.
Accordingly, the application to amend the cross-claims in the form requested is refused. Leave will be given to the Defendants to amend the cross-claims only to make formal changes given Iden's new position as Plaintiff in the proceedings.
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Decision last updated: 26 June 2013
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