Reliance Capital Pty Ltd v Caratti [No 10] - [2024] WASC 69

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RELIANCE CAPITAL PTY LTD -v- CARATTI [No 10] [2024] WASC 69
CORAM:   LUNDBERG J
HEARD:   14 FEBRUARY 2024 AND 1 MARCH 2024
DELIVERED          :   14 MARCH 2024
FILE NO/S:   CIV 3136 of 2019
BETWEEN:   RELIANCE CAPITAL PTY LTD
Plaintiff
AND
ALLEN BRUCE CARATTI
First Defendant
TINA MICHELLE BAZZO
Second Defendant

Catchwords:

Practice and procedure - Further application made during the course of the trial to amend the defence in CIV 3136 of 2019 - Amendment similar in substance to matters the subject of previous applications and rulings - Amendment refused - Turns on own facts

Legislation:

Nil

Result:

Application to amend defence refused.

Category: B

Representation:

Counsel:

Plaintiff	:	R J S French & A J Tharby
First Defendant	:	Dr J T Schoombee (14 February 2024 only) & A P Rumsley
Second Defendant	:	Dr J T Schoombee (14 February 2024 only) & A P Rumsley

Solicitors:

Plaintiff	:	Bennett
First Defendant	:	Alan Rumsley
Second Defendant	:	Alan Rumsley

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

Reliance Capital Pty Ltd v Caratti [No 6] [2024] WASC 21
Reliance Capital Pty Ltd v Caratti [No 7] [2024] WASC 33

LUNDBERG J:

On 14 February 2024, during the course of the trial of the two actions, the defendants mounted a fresh application to amend their defence in CIV 3136 of 2019. As with the previous similar applications, the plaintiff opposed the amendment. I received written submissions from the parties on the issue and heard argument in relation to the proposed amendment on 1 March 2024, and reserved my decision. In my view, the amendment should be refused, for the reasons explained below.
The amendment is contained in the defendants' Minute of Proposed Re-Amended Defence dated 14 February 2024. The Minute seeks to introduce the following paragraph into the defence:
[40]The Defendants say further that the Plaintiff has not pleaded any extension of the term of the Loan Agreement beyond 29 February 2016 in paragraphs 1 to 39 of its Statement of Claim (the term to 29 February 2016) and that any claim by it is limited to that term, including to items of claim in annexure A with dates falling within the term to 29 February 2016 and interest continuing to run on such items.
The application was supported by a concise outline of submissions dated 14 February 2024. I also received an outline of submissions from the plaintiff, dated 23 February 2024.
The proposed amendment essentially revisits the matters which were the subject of my earlier reasons delivered on 5 February 2024 and 13 February 2024, which had been the subject of argument during (what has now, regrettably, become) the first phase of the trial. I refer to Reliance Capital Pty Ltd v Caratti [No 6][1] and Reliance Capital Pty Ltd v Caratti [No 7].[2] As much ink has been spilt on this subject already, I will confine my discussion concerning the latest proposed amendment to only what is necessary and I will incorporate into the present reasons the substance of my earlier reasons (including the background set out therein, the relevant principles, and the various definitions), without repeating them.
[1] Reliance Capital Pty Ltd v Caratti [No 6] [2024] WASC 21.
[2] Reliance Capital Pty Ltd v Caratti [No 7] [2024] WASC 33.
In simple terms, the proposed amendment would operate to permit the defendants to assert that the plaintiff cannot validly pursue claims in respect of the costs and expenses (and concomitant interest amounts) said to have been incurred in respect of the Loan Agreement after 29 February 2016.[3] The plaintiff has explained that the overall effect of the defence, if allowed, would be to permit the defendants to challenge approximately $125,000 of the plaintiff's claim, plus any associated interest.[4]
[3] Defendants' outline of submissions dated 14 February 2024, [12] and [13].
[4] Plaintiff's outline of submissions dated 23 February 2024, [24].
The defendants wish to assert, through this amendment, that the term of the Loan Agreement came to an end on 29 February 2016 on the basis that the plaintiff has failed to plead any extension of the Loan Agreement thereafter. The defendants emphasise that the plaintiff has had the opportunity to amend its pleading, and chosen not to do so. The defendants submit they are entitled to restrict the plaintiff to the claims in the statement of claim, noting that an amendment is not strictly required to permit this.[5]
[5] Defendants' outline of submissions dated 14 February 2024, [5].
As to the late discovery issue which I dealt with in my earlier reasons, the defendants point out that the plaintiff itself failed to discover the documents in question. The defendants say they should not be punished (and it would be unfair to do so) for discovering the documents itself and then identifying the significance of the documents shortly before trial.[6]
[6] Defendants' outline of submissions dated 14 February 2024, [8] – [9].
In opposing the amendment, the plaintiffs complain that the defendants are now 'for a third time apply[ing] to introduce a new issue into the proceedings, namely the plaintiff not pleading an extension of the Anketell Loan'.[7] Further, the plaintiff submits that the 'substance of the proposed amendment has been previously raised by the defendants and refused by the Court' and 'the defendants do not identify any change of circumstances that would warrant a different result', and note that the 'further passage of time and subsequent events should weigh further against allowing the amendment'.[8]
[7] Plaintiff's outline of submissions dated 23 February 2024, [1].
[8] Plaintiff's outline of submissions dated 23 February 2024, [2].
As I have previously observed, the claim against the defendants (in their capacity as guarantors) is in respect of the liabilities and obligations which arose under the Loan Agreement dated 18 November 2013. That Loan Agreement was subsequently assigned by the original financier to the plaintiff in February 2016. The amounts claimed against the defendants run from the initial advance in February 2016 (being the assignment date) through to December 2019, with a claim for daily interest thereafter at $2,587.60 per day. All of this is detailed in the annexure to the ASOC, which also includes amounts received by the plaintiff to the credit of the borrower (and the guarantors) in September 2017.
Accordingly, the pleaded claim against the defendants is, and always has been, for amounts due to be paid under the Loan Agreement, which the plaintiff alleges were not paid, stretching well beyond February 2016.
Yet no defence or contention had been raised in this regard by the defendants until the first day of trial, being 29 January 2024. This appears to have been as a result of the defendants' appreciating the significance of certain documents which the defendants had discovered in November 2023 (but which the plaintiff had not discovered). The contention as to the invalid extension was also not the subject of the defendants' opening submissions filed ahead of trial.
The defence filed by the defendants addressed the assignment of the Loan Agreement, and its extension beyond 31 October 2015, in a very specific manner, as I noted in my earlier reasons. Specifically, the defendants have for some time pleaded that the extension of the term of the Loan Agreement beyond 31 October 2015 would have discharged the guarantee unless the defendants consented to the assignment to the plaintiff. It is then pleaded that consent was in fact given, but only by reason of a representation alleged to have been made by Mr Masel for the plaintiff, being the Enforcement Representation. These matters are dealt with by the plaintiff in its reply, but not addressed by the defendants' rejoinder.
As I explained in my earlier reasons, issues of cost, delay and prejudice are relevant features to consider when assessing whether an arguable amendment should be allowed.[9] I remain of the view that the litigation has reached a point that it would be highly prejudicial to the plaintiff to permit the defendants to raise this new issue. That remains the case even though the amendment was sought on the last day of the first phase of the trial (14 February 2024) and the trial has been adjourned part heard, to reconvene on 15 March 2024. The break in the trial should not be an invitation to mount further amendments, or to re-argue those which have in effect been dealt with.
[9] Reliance Capital Pty Ltd v Caratti [No 6] [17] – [20] and Reliance Capital Pty Ltd v Caratti [No 7] [48] - [54].
In any event, the pleading of the new point on the part of the defendants would require the plaintiff to be granted a proper opportunity to plead a response thereto, based on the factual course of events stretching beyond February 2016, which would have undoubtedly required, on my assessment, a further adjournment of the trial, the provision of further evidence and an inefficient use of both court time and judicial time. The inability to conclude the trial in the original 10 days allocated (extended to 12 days by the Court) has already meant a degree of disruption has been experienced to the Court's timetable and planning. Further disruptions should obviously be avoided, or at least minimised to the extent possible.
Allowing a further amendment of the nature proposed would, in my view, preclude any prospect of the trial finishing in the remaining 5 ½ days which have been allocated (between 15 March 2024 and 27 March 2024) inevitably pushing the matter well beyond May 2024. It is relevant to observe that the actions had originally been allocated trial dates commencing on 6 November 2023, which were vacated in October 2023.
I will therefore refuse the amendment to insert the new [40] to the defence, for the following reasons, in summary:
(a)the proposed amendment is substantially similar to the previous amendment sought by the defendants, which the Court has refused and there is no good reason for the subject matter to be re-opened;
(b)the proposed amendment would introduce a new issue into the proceedings at a very late stage of the proceedings;
(c)the defendants had a reasonable opportunity prior to the trial, given the state of the pleadings prior to the trial, to raise this point and plead it out, to avoid surprise to the plaintiff, but did not do so (and the defendants have always had possession of the documents which appear to have underpinned the raising of the issue on the eve of trial);
(d)the defendants have failed to provide a cogent explanation for not raising the issue earlier, other than to say that the significance of the issue did not become apparent until late in the day; and
(e)if the issue is allowed to be run by the defendants, the plaintiff will require an opportunity to plead to it, lead further evidence on the issue, and I reasonably expect (based on the course of the proceedings to date) further interlocutory applications to arise thereafter, all of which would be antithetical to the objects stated in paragraphs (b), (c) and (d) of Order 1 r 4B RSC, and require a relisting of the trial beyond May 2024.
I will order that the defendants' application to amend the defence in CIV 3136, filed on 14 February 2024, is dismissed and that the defendants pay the plaintiff's costs of the application in any event, to be assessed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TL
Associate to the Honourable Justice Lundberg
14 MARCH 2024