Roberts Ltd v Frith-Brown

[2019] TASSC 29

[2019] TASSC 29

COURT:  SUPREME COURT OF TASMANIA

CITATION:                Roberts Ltd v Frith-Brown [2019] TASSC 29

PARTIES:  ROBERTS LIMITED (ACN 009 475 647)
  v
  FRITH-BROWN, Sanders

FRITH-BROWN, Sanders as Executor of the Estate of the late Valerie James

FILE NO/S:  765/2009 and 522/2013       
DELIVERED ON:  10 July 2019
DELIVERED AT:  Hobart
HEARING DATES:  27 and 29 May and 7 June 2019    
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Procedure – Civil procedure in State and Territory Courts – Court's supervision – Amendment – Originating process, pleadings etc – Statement of claim – Claim on an account stated – Claim for supply of services where price not agreed – Claim for supply of goods where price not agreed - Exercise of discretion – Leave to amend granted.

Bank of New South Wales v Brown [1983] HCA 1; (1983) 151 CLR 514.
Pavey and Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221.
Sale of Goods Act 1896 (Tas), ss 13 and 53.
Supreme Court Rules 2000 (Tas), r 427.
Aust Dig Procedure [1107]

REPRESENTATION:

Counsel:
             Plaintiff:  L Sealy SC and C Browne (27 and 29 May) and
  L Sealy SC and T Cox (7 June)       
             Defendants:                K Read SC and D Deller (27 May) and
  D Deller (29 May and 7 June)

Solicitors:
             Plaintiff:  Simmons Wolfhagen             

Defendants:               Fitzgerald and Browne Lawyers

Judgment Number:             [2019] TASSC 29
Number of paragraphs:    78  

Serial No 29/2019

File Nos 765/2009

522/2013

ROBERTS LIMITED v SANDERS FRITH-BROWN and SANDERS FRITH-BROWN
AS EXECUTOR OF THE ESTATE OF THE LATE VALERIE JAMES

REASONS FOR JUDGMENT  HOLT AsJ
  10 July 2019

An application to amend the statement of claim

1. The plaintiff, Roberts Limited (Roberts) has applied for leave to amend its statement of claim filed in 2014.  The defendants, being Sanders Frith-brown (Frith-Brown) and Sanders Frith-Brown as executor of the estate of the late Valerie James, oppose the making of an order granting leave.  Valerie James (James) died in 2014 after the commencement of the litigation.

2. The applicable procedural rule contained in the Supreme Court Rules 2000 is r 427. It is as follows:

   "427   Amendment of endorsement or pleadings

   (1)       At any time before judgment, the Court or a judge may grant leave to a party to amend any process or pleading in such a manner and on such terms as may be just.

   (2)       Subject to subrule (3), the pleadings may be amended as necessary for the purpose of determining the real questions in controversy between the parties.

   (2A)     The Court or judge, despite the expiry of any relevant limitation period after the day on which proceedings commenced, may grant leave under subrule (1) if it is satisfied that any other party to the proceedings would not, as a result of granting leave, be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.

   (3)       If, at the trial of a proceeding to which Division 1 of Part 14 applies, an application is made for leave to amend a pleading, the Court or judge, if the amendment would cause the postponement or adjournment of the trial, may refuse the application in order to protect the integrity of the case management system as it is implemented by these rules and to implement the requirement that trials proceed at the appointed time, notwithstanding that any injustice to another party may have been avoided by an order for costs or some other order.

   (4)       A party obtaining leave to amend a pleading, other than in the course of a trial which proceeds on the amended pleading, must amend the pleading within –

   (a)       any period fixed by the order; or

   (b)       if a period is not fixed, within 14 days of the order.

   (5)       If a party does not amend a pleading within the period required by subrule (4), the order granting leave to amend ceases to have effect on the expiration of that period, unless the Court or a judge extends the period."

3. As to how the first three subrules operate, I venture to repeat in the following paragraphs what I said in Mirkazemi v Manns [2009] TASSC 91 at [9] to [17].

4. This rule replaced Order 31 r 1 of the Rules of the Supreme Court 1965. The old rule was as follows:

   "1 The Court or a judge may, at any stage of the proceedings, allow any party to alter or amend the endorsement on his writ or his pleadings, in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties."

5. As can be seen the rule in its old form made the making of certain amendments mandatory rather than discretionary. The operation of this type of rule was explained by French CJ in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 where his Honour said at [14]:

   "There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O'Mullen [1887] Vic Law Rp 162; (1887) 13 VLR 933 in relation to O XXVIII r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it:

   'makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases – for the purpose of determining the real question in controversy between the parties – that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon.'

   The position is different where a party seeks to set up, by amendment, a new case at trial Hipgrave v Case (1885) 28 Ch D 356 at 361 per Earl Selborne LC."

6. The distinction between subrr (1) and (2) of r 427 is that subr (2) only applies to amendments which are necessary for the purpose of determining the real questions in controversy. It does not apply to other types of amendment including amendments designed to set up a new case.

7. Although, necessary amendments, like other amendments, are now discretionary the fact that the two kinds of amendment are dealt with in separate subrules indicates that different considerations apply.

8. The subr (2) type discretion was considered in Commonwealth v Verwayen [1990] HCA 39;  (1990) 170 CLR 394, where Dawson J said at 456:

   "The rules of court have always provided that leave to amend pleadings may be given for the purpose of determining the real question in controversy between the parties ... and an amendment should ordinarily be allowed if any harm arising from so doing can be compensated for by the imposition of terms upon the party asking for the amendment: ..."

9. There is no modern practice that amendments which are not necessary for the purpose of determining the real questions in controversy will generally be allowed. In Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ said at [111]–[112]:

   "An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.

   A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. ..."

10. Further, where an amendment seeks to introduce a new claim after a limitation period has expired, r 427(2A) mandates that the discretion to permit the amendment is not enlivened unless the Court or judge "... is satisfied that any other party to the proceedings would not, as a result of granting leave, be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise".

11. Sub-rule (2A) was introduced to ameliorate the rigidity inherent in the rule of practice referred to in Weldon v Neal (1887) 19 QBD 394. That rule being that new claims could not be introduced by amendment after the expiry of a limitation period except, perhaps, in very peculiar circumstances.

12. As subr (2A) is concerned with the bringing of claims after a limitation period has expired, the cases regarding the discretion to extend time under limitation legislation provide guidance as to the interpretation to be given to the rule. Upon an application for an extension of time a significant factor in the consideration is the issue of whether the delay would cost the defendant a fair trial.  Hill v IlukaCorporation Ltd [2002] TASSC 113. As to the meaning of prejudice in a limitation of actions context "the real question is whether the delay has made the chances of a fair trial unlikely". Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 550. The rule is remedial and so should be given a beneficial interpretation. I interpret the reference in the rule to prejudice in the conduct of the claim or defence to be a reference to material prejudice in the sense that by reason of the delay the chances of a fair trial have become unlikely.

The existing pleading

1. The current statement of claim, which is dated 20 February 2014, includes the following allegations.  Between 2003 and 2008 Frith-Brown and James operated a farm at Ross and between 2005 and 2008 Frith-Brown also operated a farm at Ouse.  Mr Ray Peters was the manager of the farms until about October 2007, after which Mr Peter Cush became the manager of the farms.  From 2003 Frith-Brown and James had a credit contract with Roberts, a supplier of rural goods and services, with respect to the farm at Ross.  From 2005 Frith-Brown had a credit contract with Roberts with respect to supply of goods and services to the farm at Ouse.  Each of the credit contracts contained a provision that property in goods supplied shall not pass until payment (the credit contracts have been inspected by me and contain this provision) and that payment was to be made by the end of the next calendar month following the month in which delivery occurred.  Goods and services for the farms were ordered from Roberts by the manager of the farms.  By April 2008 the debit balance on the accounts was $830,745.96.  On 2 April 2008 Frith-Brown and James agreed with Roberts that they would pay the accounts less a $200,000 credit to be provided by Roberts.  By a subsequent agreement made 7 April 2008 the starting amount payable was increased from $830,745.96 to $832,226.07.  Frith-Brown and James have not paid anything off the debit balance of the accounts.

The proposed statement of claim

1. The application to amend is the result of a number of problems pertaining to the existing pleading.  The statement of claim was filed following the issue of a writ on 6 June 2013 and so limitation of actions problems arise in respect of any claims for debts due and payable more than six years before the filing date.  Another problem with the existing statement of claim is that it contains no allegations as to the basis upon which the price of the services or goods was to be ascertained. 

2. The proposed statement of claim dated 22 May 2019 is as follows:

   "1        The Plaintiff ('Roberts') is and was at all material times a corporation registered pursuant to the provisions of the Corporations Act 2001 (Cth) and carrying on the business of (inter alia) a supplier of irrigation and rural merchandise and related services.

   2         At all material times since in or about 2005, the firstnamed defendant ('Frith-Brown') operated a farming business on and from a property situated at Ellendale Road, Ouse in Tasmania and commonly known as 'Norley'.

   3         At all material times since in or about 2003, Valerie Ruth James ('James') and Frith-Brown operated a farming business on and from a property situated at Toom’s Lake Road, Ross in Tasmania and commonly known as 'Mount Morriston'.

   4         On divers dates between 7 June 2007 and on or before 31 January 2008 Roberts at the request of Frith-Brown sold and delivered rural merchandise and supplied various related services to Frith-Brown at Norley upon credit.

   Particulars

   Particulars of the said merchandise and services exceed three folios and have previously been provided to the defendants.

   5         On divers dates between 7 June 2007 and on or before 3 March 2008 Roberts at the request of James sold and delivered rural merchandise to James at Mount Morriston upon credit.

   Particulars

   Particulars of the said merchandise exceed three folios and have previously been provided to the defendants.

   6It was a term implied by law of the agreements pursuant to which the rural merchandise and services were delivered and supplied to Frith-Brown and James as alleged in paragraphs 4 and 5 hereof that Frith-Brown and James would each pay the reasonable value thereof.

   7The aforesaid dealings between the plaintiff and Frith-Brown and James resulted in debts, claims and demands by the plaintiff of the one part and by the Frith-Brown and James of the other part each against the other.

   Particulars of Debts, Claims and Demands

   (a)Roberts claimed $830,745.96 as debts due and owing by Frith-Brown and James;

   (b)Frith-Brown claimed that within the period November 2006 to March 2008 Roberts had purported to charge Frith-Brown for goods sold and delivered and services supplied which Frith-Brown claimed Roberts had not, in fact, sold and delivered or supplied for his benefit;

   (c)Frith-Brown further claimed that Roberts had failed to carry out services in a workman like manner; and

   (d)James claimed that within the period February 2003 to April 2008 Roberts had purported to charge James for goods sold and delivered and services supplied which James claimed Roberts had not, in fact, sold and delivered or supplied for her benefit.

   8         On or about 2 April 2008 an account was stated between Roberts of the one part and Frith-Brown and James of the other part, in respect of the said debts claims and demands and the balance of the said account, namely $630,745.96 was then agreed between the parties to be jointly and severally due from Frith-Brown and James to Roberts and payable on or before 9 April 2008.

   Particulars of Account Stated

   The said account was stated and agreed and evidenced in writing and signed by each of Frith-Brown and James at the conclusion of a meeting which took place on 2 April 2008 at Mount Morriston in Tasmania between Mr Tony Roberts and Mr Colin Bell as servants or agents of Roberts and Frith-Brown and James.

   9         Frith-Brown, James and the secondnamed defendant have and each of them has failed or refused and continue to fail or refuse to pay the said sum of $630,745.96 or any part thereof.

   10       In the alternative, Roberts refers to and repeats paragraph 4 hereof and says that Frith-Brown is truly indebted to Roberts in the sum of $488,330.46 being the outstanding balance of the reasonable value of the merchandise and services supplied as aforesaid which sum has been due and payable by Frith-Brown since not later than 2 April 2008.

   11       Further, Roberts refers to and repeats paragraph 5 hereof and says that James is truly indebted to Roberts in the sum of $298,131.28 being the outstanding balance of the reasonable value of the merchandise supplied as aforesaid which sum has been due and payable by James since not later than 2 April 2008.

   12       Frith-Brown has failed or refused and continues to fail and refuse to pay the sum of $488,330.46 or any part thereof.

   13       James and the secondnamed defendant have failed or refused and continue to fail and refuse to pay the sum of $298,131.28 or any part thereof.

   AND the Plaintiff claims

   The sum of $630,745.96 as money due on an account stated.

   Alternatively, the sum of $488,330.46 against Frith-Brown, the sum of $298,131.28 against the secondnamed defendant."

The procedural history

1. In August 2008 Roberts issued two writs.  One against Frith-Brown claiming $485,886.29 for money due in respect of services and goods supplied for the farming operations at Ouse and the other against James (rather than against Frith-Brown and James) claiming $337,041 in respect of goods and services supplied in connection with the farming operations at Ross.  The actions were discontinued in August 2009 and replaced a couple of days later with a single action against Frith-Brown and James claiming instead $630,745.96 on an account stated on 2 April 2008.  On 6 June 2013 another action issued against Frith-Brown and James claiming $830,745.96 for debt and in the alternative $630,745.96 on an account stated.  In March 2014 the 2009 and 2013 actions were consolidated with the statement of claim in the consolidated proceeding being the statement of claim dated 20 February 2014 in the 2013 action.  This statement of claim is the existing statement of claim.  From time-to-time there have been unsuccessful applications to amend.  The currently proposed pleading is the fourth proposed amended version of the 2014 statement of claim and overall the eight statement of claim or proposed statement of claim.

The grounds of opposition to the amendment application

1. The defendants oppose a grant of leave to amend on the following grounds:

   (1)       A cause of action is not disclosed.

   (2)       There is a lack of clarity.

   (3)       Allowing the amendment would be prejudicial to the defendants.

   (4)       Allowing the amendment would be to permit an abuse of process.

Does the proposed statement of claim disclose any cause of action?

1. The Supreme Court Rules 2000, r 227 relevantly includes the following:

   "227     Statements in pleadings

   (1)       A pleading is to –

   (a)       …

   (b)       contain only a statement of all the material facts in summary form on which the party relies but not the evidence by which those facts are to be proved.

   (2)       …

   (3)       Every pleading is to be expressed so as to give reasonably explicit notice to any other party of all grounds of action … on which the party pleading intends to rely at the trial." 

2. Material facts are those facts necessary for the purpose of formulating a complete cause of action and if any one material fact is omitted the statement of claim is bad and the defect cannot be cured by the supply of particulars without the acquiescence of the other party.  See Bruce v Odhams Press Ltd (1936) 1 KB 697 at 712–713. The reason is that, unless otherwise agreed, a party cannot assert at trial a material fact necessary for the grant of relief if such fact has not been pleaded. See Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 a 664.

3. Where no contract exists for the supply of services and goods, for example because the price to be paid is not fixed, or for whatever reason the contract is unenforceable, the party seeking recovery must claim in indebitatus assumpsit in respect of services to recover a reasonable sum as a quantum meruit.  In the case of goods the claim is to be made under the Sale of Goods Act 1896.

1. An actionable claim in indebitatus assumpsit arises where services are supplied to and accepted by a defendant in circumstances where the remuneration has been left indeterminate by the parties.  The claim is for debt and not for damages.  The supplier could make demand for what he deserves (as a liquidated amount) and if the demand be too much the amount would be abridged in the discretion of the jury.  The action is not based on a contract or on an implied contract, but on a right to restitution based on unjust enrichment.  See Pavey and Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221.

2. Prior to the decision in Pavey and Matthews, Australian courts had regarded the right to payment for services or goods where the price had been left indeterminate as arising from an implied contract.  In the case of the supply of goods this misunderstanding appears to have been enshrined in the Sale of Goods Act 1896, s 13(2). Section 13 is as follows:

   "13      Ascertainment of price

   (1)  The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner thereby agreed, or may be determined by the course of dealing between the parties.

   (2)  Where the price is not determined in accordance with the foregoing provisions the buyer must pay a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular case."

3. It follows from the general law (in the case of the supply of services) and from the Act (in the case of the supply of goods) that where price has been left indeterminate and an action is to be brought for payment that the essential elements are firstly request (in the case of goods), secondly supply, thirdly acceptance (in the case of services) and fourthly demand (in the case of services).  In my view, these elements, with the exception of acceptance, are sufficiently encompassed in the proposed statement of claim at pars 4, 5, 7, 10, 11, 12 and 13 so as to formulate complete causes of action in debt and under the Act.

4. It might possibly be that acceptance is a fact presumed by law in favour of the plaintiff unless the presumption is rebutted by the defendants.  Suffice to say that Roberts will need to show at trial that such a presumption exists or be at risk, for want of pleading, of not being able to lead evidence as to acceptance so as to make out a cause of action in respect of the provision of services. 

5. There may also be a problem arising from the failure to plead that payment for goods was due on a date certain.  The Sale of Goods Act, s 53 provides:

   "53      Action for price

   (1)       Where under a contract of sale the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.

   (2)       Where under a contract of sale the price is payable on a day certain irrespective of delivery, and the buyer wrongfully neglects or refuses to pay such price, the seller may maintain an action for the price, although the property in the goods has not passed, and the goods have not been appropriated to the contract." 

6. Another potential problem is that the proposed statement of claim contains no plea to connect the persons ordering the services and goods with Frith-Brown and James in the event that the services and goods were ordered by farm managers (as alleged in the existing statement of claim) rather than Frith-Brown and James directly (as appears to be the claim in the proposed new plea).

7. These possible omissions were not the subject of argument before me.  It is accordingly inappropriate that I should deal with them now.  If leave to amend is granted and the proposed statement of claim filed and delivered I shall reserve leave to the defendants to apply to have the statement of claim, insofar as it concerns the supply of services and goods, struck out.

8. The complaint of the defendants, with respect to the claims for the supply of services and goods, is that the proposed pleading does not disclose causes of action because each individual order, delivery, acceptance and demand has not been pleaded.  Further, the pleading does not distinguish between claims in respect of the supply of services and the claims in respect of the supply of goods.

9. In my view, it is neither necessary nor appropriate to include in the pleading each and every transaction. So long as the transactions, in respect of which the claims are made, are encompassed in the general allegations, the detail of each individual transaction is a matter for particulars separately supplied or to be supplied.  The Supreme Court Rules, r 227(1)(a) requires a pleading to be as brief as the nature of the case allows.

10. I am conscious that it is an incidental function of pleadings to define the issues for decision.  Banque Commerciale SA (In Liq) v Akhill Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286. The delivery of particulars, without more, will not assist in defining the issues for decision as there is no fixed requirement under the Supreme Court Rules that a party must file a response to particulars.  However, the fact that particulars are needed to fill in the picture of the plaintiff's causes of action with sufficiently detailed information to put the defendants on guard as to the case to be met and to enable them to prepare for trial does not mean that a pleading, which otherwise covers the elements necessary to formulate complete causes of action, is defective.  Appropriately precise definition of the facts in dispute can be achieved by the use of case management rules.  For example, there might be an order that the plaintiff deliver particulars in the form of separate schedules in respect firstly of the claim against the first defendant for $488,330.46 and secondly in respect of the claim against the second defendant for $298,131.28.  The form of the schedules which might be ordered could include columns as follows:

    (a)       Item number.

    (b)       Date of order.

    (c)       Details of the order including the name of the person placing the order.

    (d)       Date of supply or delivery.

    (e)       Identification of the services supplied.

    (f)       Identification of the goods supplied.

    (g)       Date of demand for payment.

    (h)       Amount demanded.

    (i)        The amount, if any, paid.

    (j)        Response to whether the goods or services were ordered.

    (k)       Response admitting or disputing delivery or supply.

    (l)        Response setting out the facts relied upon if acceptance is disputed.

    (m)      Response to the quantum of the claim.

11. There is also the claim by the plaintiff for the amount due on an account stated on 2 April 2008.  The plea appears in the proposed statement of claim at pars 7, 8 and 9.  The allegations are that the plaintiff claimed $830,745.96 and that the defendants had cross-claims, with agreement being reached that the defendants would pay to the plaintiff the sum of $630,745.96.

12. The nature of a claim based on an account stated was explained in Bank of New South Wales v Brown [1983] HCA 1; (1983) 151 CLR 514 where Brennan J (as he then was) said at 535–536 (footnotes omitted):

    "An account stated may take either of two forms (per Jordan CJ in Commonwealth Dairy Produce Equalisation Committee Ltd v McCabe). The two forms are explained by Viscount Cave in Camillo Tank Steamship Co Ltd v Alexandria Engineering Works:

    'The expression "account stated", as Mr Jowitt pointed out in his able argument, has more than one meaning. It sometimes means a claim to payment made by one party and admitted by the other to be correct. An account stated in this sense is no more than an admission of a debt out of court; and while it is no doubt cogent evidence against the admitting party, and throws upon him the burden of proving that the debt is not due, it may, like any other admission, be shown to have been made in error. This is the plain result of the authorities, such as Perry v Attwood and Laycock v Pickles.  Where the transaction is of this character, it makes no difference whether the account is said to be stated or to be "stated and agreed"; the so-called agreement is without consideration and amounts to no more than an admission. There is a second kind of account stated where the account contains items both of credit and debit, and the figures on both sides are adjusted between the parties and a balance struck. This is called by Mr. Justice Blackburn, in Laycock v Pickles, a "real account stated", and he describes it as follows:

    "There is a real account stated, called in old law an insimul computassent, that is to say, when several items of claim are brought into account on either side, and, being set against one another, a balance is struck, and the consideration for the payment of the balance is the discharge of the items on each side. It is then the same as if each item was paid and a discharge given for each, and in consideration of that discharge the balance was agreed to be due."

    Mr R M Jackson, in 'The History of Quasi-Contract in English Law' (Cambridge (1936)) at p 110 describes the former kind of account stated as admissions, the latter as contracts. "The latter," he observes, 'should be discussed within the body of contract law, perhaps the most convenient place being in proximity to Accord and Satisfaction.'

    Although the former kind of account stated, being an acknowledgment of a debt, infers a promise to pay (per Viscount Haldane in the Camillo Case, the existence of the debt can be rebutted (Siqueira v Noronha). The acknowledgement does not discharge or require the discharge of the items on either side of the account. By contrast, the latter kind of account stated requires the discharge of the items on either side of the account, whatever their character, as consideration for a new liability created in their place."

13. The account stated claim is a claim that, as a matter of contract, there was a discharge of the items on both sides of the account as consideration for a new liability being created in the sum of $630,745.96.  The proposed statement of claim sufficiently alleges a claim by the plaintiff and cross-claims by the defendants with the parties reaching agreement so as to extinguish the claims and cross-claims and replacing them with the agreed new liability.  A complete cause of action for an account stated has been formulated.

14. Although the proposed statement of claim formulates a cause of action on an account stated, the defendants say that the claim is untenable as the document alleged to be the written record of the account stated does not contain reference to the specific sum of $630,745.96.  The construction of the document, however, should be left to the trial for resolution after all of the evidence is in and detailed arguments have been presented. 

15. As to the causes of action in respect of services and goods supplied, I have already said that I have reservations about the proposed pleading in respect of matters not argued, but my reservations are matters which can await detailed argument in the event that leave is granted, the statement of claim is amended accordingly and the defendants bring a strike out application pursuant to the leave to do so which I will give to them.

The claim that the proposed plea lacks clarity

1. "The function of pleadings is to state with sufficient clarity the case that must be met."  See Banque Commerciale SA (In Liq) v Akhill Holdings Ltd (supra) per Mason CJ and Gaudron J at 286.

2. "The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant.  Their function is to fill the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet".  Bruce v Odhams PressLtd (supra) per Scott LJ at 712. 

3. The defendants have complained that the pleading on the causes of action for the price of services and goods supplied lacks clarity in that there is a failure to distinguish between services supplied and goods delivered.  There is also the complaint, which I have already mentioned, that the pleading itself does not contain details of the individual transactions.  These matters can be adequately dealt with by case management orders relating to the delivery of particulars and requiring the defendants to respond. 

4. The claim based on an account does not lack clarity.  The date of the account, the basis of it, the identification of the document containing it and the amount are all included. 

5. I would not disallow the proposed statement of claim as so lacking in clarity that it might be characterised as embarrassing or productive of prejudice or delay in the fair trial of a proceeding.

Prejudice

1. The defendants say two things as to prejudice. The first is that allowing the proposed statement of claim involves the introduction of causes of action which would be statute barred if fresh proceedings were to issue and that the plaintiff has failed to satisfy the threshold requirement imposed by r 427(2A) that the amendment would not result in prejudice to the defendants in the conduct of their defence. The second is that, in any event, because of the passage of time between the events leading to the claim and the recent submission of the proposed new formulation of the claim, their ability to meet the new pleading has been compromised. Reference was made to the death of James in 2014.

2. The primary submission for the purpose of invoking r 427(2A) was that by the act of applying to amend the statement of claim by substituting a proposed new version in December 2018 and then, according to the defendants, on the hearing of that amendment application on 3 April 2019 abandoning all claims except for a claim based on an account stated on 7 April 2008, everything that is in the now proposed statement of claim is new.

3. Cited in support of the proposition was Murdoch v Lake [2013] QSC 268. Their Margaret Wilson J said at [6], [80], [81] and [84]:

   "[6]      The plaintiff has abandoned reliance on the third amended statement of claim. A draft amended claim and draft fourth amended statement of claim were exhibited to an affidavit sworn by the plaintiff’s solicitor Mr Pitman filed on 22 April 2013.

   [80]      The allegation of misleading or deceptive conduct in the fourth amended statement of claim is based on three arrangements, all of which are different from the understanding previously pleaded. The plaintiff is really seeking to introduce three new causes of action all of which are statute barred. I am unpersuaded that any of them is based substantially on the same facts as the cause of action previously pleaded. Accordingly, the application for leave to file and serve the fourth amended statement of claim should be refused.

   [81]      The plaintiff commenced this proceeding in September 2010. In seeking leave to file and serve the fourth amended statement of claim he effectively abandoned the cause of action on which the proceeding was based, and sought to introduce new causes of action which are statute barred. As counsel for the defendant submitted, it should be taken that the fourth amended statement of claim represents the best case he is able to propound. There is no suggestion he could reformulate his case in some other way that it would not be out of time.

   [84] The refusal of leave to file and serve the fourth amended statement of claim will leave the plaintiff in a position similar to not having filed a statement of claim in support of the claim. The defendant seeks an order dismissing the proceeding for want of prosecution." 

4. The decision was overturned on appeal on the basis that leave to amend should not have been withheld.  See Murdoch v Lake [2014] QCA 216.

5. The statement of claim dated 20 February 2014 was, by consent order made 11 March 2014, brought forward in the consolidation of the proceedings comprising actions 765/2009 and 522/2013.  Prior to consolidation the statement of claim in 765/2009 included the following:

   "2By an agreement between the Plaintiff and the Defendants made on or about 2 April 2008 the Defendants agreed to pay to the Plaintiff $630,745.96 being the balance of monies due to the Plaintiff on accounts stated between the Plaintiff and the Defendants ('the Agreement').

   PARTICULARS

   (a)It was a term of the Agreement that the defendants would pay within a period of 7 days (of 2 April 2008) the balance of the Defendants' accounts with the Plaintiff as at 2 April 2008 and that the Plaintiff would credit the amount of $200,000.00 to the Defendants' particular account with the Plaintiff in respect of 'Norley' accounts.

   (b)As at 2 April 2008 the balance of the Defendants' accounts with the Plaintiff totalled $830,745.96.

   3In breach of the Agreement the Defendants have failed and refused and continue to fail and refuse to pay to the Plaintiff the amount of $630,745.96.

   …

   6BY REASON OF THE FOREGOING THE PLAINTIFF CLAIMS:

   (a)$630,745.96 debt;"  

6. The statement of claim dated 20 February 2014, although reciting the alleged 2 April 2008 agreement and claiming damages for its breach contained no claim for debt based on that account stated.  Instead reliance for the purpose of a claim in debt was placed on an allegation that there had been an agreement made 7 April 2014, whereby the amount owing on the account stated was claimed to be $632,226.07.   This was the amount claimed in the claim for relief in the statement of claim.  The relevant parts of the 2014 statement of claim are as follows:

   "18On or about 2 April 2008, Roberts, Frith-Brown and James entered into an agreement (the 'April Agreement') …

   19There were express terms of the April Agreement, amongst others, to the following effect:

   (a)Frith-Brown and James would pay the balance of the Accounts, as they would stand after the $200,000.00 credit referred to in paragraph 19(c), on or before 9 April 2008.

   …

   (c)Roberts would pay into, or credit to, those of the Accounts which related to the property known as 'Norley', the sum of $200,000.00;

   20By subsequent agreement between Frith-Brown and James and Roberts made on or about April 2008 (the 'Second April Agreement'); either:

   (a)       the parties entered into a further agreement;  or

   (b)       in the alternative, the April Agreement was varied,

   which agreement either had express terms, or varied the April Agreement's express terms, to the effect that:

   (c)as to the terms listed at paragraphs 19(a) and 19(c), Frith-Brown and James were to pay $632,226.07 (being $832,226.07 less $200,000.00) on or before 11 April 2008 and on receipt of that money Roberts would credit the Norley account with the sum of $200,000.00;

   …

   22       In the premises, Frith-Brown and James have breached, and continue to breach, the

   …

   (c)       term of the April Agreement pleaded as paragraph 19(a);

   AND ROBERTS CLAIMS AGAINST FRITH-BROWN AND JAMES

   B         in the alternative to A, $632,226.07;

   E         damages;" 

7. On the hearing of the December 2018 amendment application on 3 April 2019 counsel for the plaintiff conceded that the claim in debt on an account stated on 2 April 2008 in the sum of $630,745.96 had been abandoned in favour of the new claim based on the 7 April 2008 agreement.  The transcript from that day includes the following at 47–54:

   "MR COX:                  … The parties enter into a further agreement, and then if you're ordinarily pleading it you'd say, 'The particulars of which are that's contained in a document dated 7 April 2008 signed by the parties'.

   HIS HONOUR:                      Is an account stated where the parties agree what the figure is?

   MR  COX:                  Yes.

   HIS HONOUR:  Yes.  But if I'm to take it your case, the one that's intended to be brought to trial, is that by an agreement in writing made on or about whatever it was, 7 April 2008, … defendant agreed to pay x dollars, it's a fairly simple pleading.

   MR COX:                   Absolutely, …

   MR COX:                   In the premises of this agreement and it being struck at six hundred and thirty two, and the failure of the defendants to pay you owe us the six thirty two on account stated, as – as it says that in 24.  That's the case, your Honour.  It is – obviously it's been painful in the past, the breadth of it, but all we seek to maintain is that." 

1. On this point, counsel for the plaintiff, submitted that there had been no express and unequivocal election to abandon.  However, the question of election does not arise as the defendants have not asserted that the claims cannot now be pursued because of a complete bar based on election.

2. The claim in the now proposed statement of claim in the sum of $630,745.96 for debt based on an account stated, having previously been abandoned, is to be treated as a new claim proposed to be initiated in 2019 for a debt arising more than six years ago.  The debt claim sought to be reinstated being outside the six year limitation period prescribed in the Limitation Act 1974, s 4(1)(a) attracts the operation of r 427(2A).

3. The balance of the proposed claim, namely the claims for the value of services and goods supplied is in the existing February 2014 statement of claim.

4. The proposed new statement of claim proceeds on the proper legal bases for these claims, whereas the 2014 pleading was lengthy and confusing.  Much of the confusion arose from the fact that the 2014 pleading of these claims was based in the law of contract rather than formulated as an action based in indebitatus assumpsit and under the provisions of the Sale of Goods Act.

5. The fact that the legal characterisation of the claim has altered and that the allegations of fact have been reformulated does not necessarily mean that the claim for the value of the services and goods supplied is a new claim attracting the operation of r 427(2A).

6. The rule was introduced in 2003 to ameliorate the rigidity inherent in the practice known as the rule in Weldon v Neal (1887) 19 QBD 394 by which proposed pleading amendments introducing new causes of action outside prescribed limitation periods were, except perhaps in very peculiar circumstances, to be disallowed. For the purpose of the rule in Weldon v Neal, new causes of action were regarded as being introduced where a new cause arose in the technical sense.  The rule might also apply where, although the legal characterisation of the cause of action remains the same, the proposed new pleading seeks to introduce a fresh set of facts or ideas involving a fundamental departure from the existing claim.  See Ritchie & Parker Alfred Green & Co v Gornalle [2000] TASSC 8. An assessment of whether a new cause of action in the technical sense is being introduced does not involve ascertainment of what the pleader had in mind at the time. What matters is not the intention of the pleader, but whether the facts alleged, if substantiated, would afford an opportunity for the relief claimed to be granted. See Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251 and Air Link Pty Ltd v Paterson [2005] HCA 39; (2005) 223 CLR 283.

7. The existing statement of claim, although clearly designed to formulate a claim based in contract for the recovery of the value of services and goods supplied, does not, in my opinion, by reformulation based on indebitatus assumpsit and the Sale of Goods Act create a new causes of action in the technical sense.  The essence of the claim remaining as a claim for the value of services and goods supplied. 

8. The result is that the proposed reintroduction of the 2 April 2008 debt claim based on an account stated attaches the operation of r 427(2A), but the proposed plea claiming the value of services and goods supplied does not.

9. Under r 427(2A) the plaintiff must positively persuade me that a grant of leave would not prejudice the defendants in the conduct of their defence. I am so persuaded. The claim in debt based on the 2 April 2008 agreement was maintained from 2009 until the delivery of the February 2014 statement of claim. James did not die until 2014 and there has been no suggestion that Frith-Brown and James had not provided instructions to their solicitors as to facts which may be relevant on a construction point (if the agreement contains ambiguity) or that proof of such facts has become difficult or impossible. I infer and accordingly find from the previous existence of the claim and from the lack of evidence from the defendants indicating that delay has diminished their ability to defend the claim that the defendants will not be prejudiced in the conduct of their defence if leave to amend to include a debt claim based on the 2 April 2008 account stated plea is granted.

10. Notwithstanding that I have found that r 427(2A) only applies to the claim on the account stated, the question of prejudice to the defendants, if leave to amend is to be granted, still arises for the purpose of considering the overall justice of whether to allow or disallow the proposed amendment of the claim for the recovery of the value of services and goods supplied.

11. I will deal with prejudice in the context of whether a fair trial can proceed on the claims for the supply of services and goods and leave matters such as oppression and abuse of process for separate consideration later in these reasons.

12. Although concerned with a presumption of prejudice where an extension of time is sought to permit a plaintiff to commence a claim outside a limitation period, I consider the analysis in Brisbane South Regional Health Authority v Taylor [1996] HCA 25, (1996) 186 CLR 541 to be apposite to my consideration of possible prejudice arising if leave to amend were granted in respect of the claim for the recovery of the value of services and goods supplied.

13. In Taylor McHugh J said at 555:

    "Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action. When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period."

14. Although in dissent in the outcome, some general observations of Kirby J are not inconsistent with the views expressed by the other judges in Taylor.  In particular, I refer to 566-567 where his Honour said:

    "It will be rare that the passage of time does not cause at least some disadvantages to a prospective defendant (for example the erosion of memory; the loss of documents; and the death, departure or disappearance of witnesses). But precisely what that disadvantage is in a particular case is better determined on evidence than on the basis of judicial generalities about time, the importance of finality and the usual desirability of prompt action for the fair trial of contested issues.

    It is always open to a proposed defendant, resisting an application for extension of time, to call evidence of any specific detriment it would suffer if an order were made. The appellant did so in the present case. If any such evidence is called, a court must consider it carefully in exercising its residual discretion.   If a defendant does not call evidence, or calls evidence which is unpersuasive or insignificant, provided it is reasonable to infer that some evidence was available to it in the circumstances the defendant cannot complain if the court concludes that no particular prejudice, over and beyond the generalities, could have been established by it. This is simply another way of saying that, because a prospective defendant has an interest in keeping the limitation bar in place and in resisting an extension that lifts it, it may be inferred that he or she would ordinarily place before a court evidence of specific prejudice pertinent to the exercise of the court's discretion. If the prospective defendant does not do so, he or she cannot justly complain if the court infers, and then holds, that the defendant has failed to demonstrate such prejudice. This is not to shift the burden in the application from the applicant to the defendant. It is simply to recognise that the burden of persuading a court on the particular issue of specific prejudice lies on the party making any such suggestion. This is what is meant by the 'evidentiary onus'." 

15. The question is whether a fair trial on the newly framed pleading can occur.

16. I have already found that the defendants can still obtain a fair trial on the account stated claim.  The claim for the reasonable value of services and goods supplied is in the existing pleading (albeit based in contract).  In respect of this latter claim, the proposed new pleading better frames the claim.  The basic factual allegations and possible areas of factual dispute have not been enlarged.  This being so, and the defendants not having identified any specific prejudice, such as the unavailability of relevant business records or the unavailability of the farm managers to give evidence, I conclude, notwithstanding the death of James in 2014, that the chances of a fair trial would not be materially diminished by allowing the amendment.

Would allowing the amendment permit an abuse of process?

1. I have set out the unfortunate procedural history of this matter starting with writs having first been filed in 2008.  Self-evidently, the defendants have already been put to significant delay and expense and I infer that Frith-Brown has been subjected to stress over the life of the litigation and also that the finalisation of the James' estate is being held up pending the outcome of this proceeding.

2. Rozenblit v Vainer [2018] HCA 23; (2018) 92 ALJR 600 concerned the appropriateness of imposing a stay based upon an impecunious plaintiff's failure to pay costs previously ordered. Keane J had occasion to consider how oppression or an abuse of process might arise on an application to amend and observed at [41] and [42]:

   "41      It has long been accepted that an order for costs in favour of a party adversely affected by the manner in which litigation is conducted may be a necessary means of preventing injustice resulting from the consequences of incompetence or inefficiency falling short of deliberate harassment or the pursuit of a collateral purpose on the part of an opposing litigant. The decision of this Court in Aon Risk Services Australia Ltd v Australian National University was a reminder that inefficiency or incompetence in the conduct of litigation may unjustly burden the other parties to the litigation, and the administration of justice itself. That decision made it clear, to the extent that clarity was necessary, that orders for costs will not always be sufficient to prevent injustice occasioned by inefficiency or incompetence in the conduct of litigation. The broader point for which Aon Risk is presently relevant is that injustice in the conduct of litigation cannot be justified by invoking the interests of justice.

   42       Litigation is sufficiently stressful and expensive for all concerned without the unnecessary aggravations of additional cost, stress, distraction and delay occasioned by inefficiency, incompetence or sheer disregard of the rules. To the extent that the contention advanced on behalf of Mr Rozenblit reflects an assumption that inefficiently or incompetently conducted litigation, and the waste in terms of time and money inflicted upon the other party or parties, is nevertheless consistent with the promotion of access to justice because the end may ultimately justify the means, that assumption must be rejected. Inefficient or incompetent conduct of litigation may cause injustice even if it is not intended to do so. Litigation that is conducted inefficiently, incompetently or in disregard of the rules by one party is no less oppressive to the other party because it is not intended to be oppressive. And it is no less oppressive because the litigant who engages in such conduct is impecunious."

3. It is clear that the conduct of the litigation to date by the plaintiff has been inefficient.   It is just as clear that the defendants have a viable basis for claiming that the litigation should now be put to an end.  However, the question of whether there ought to be a permanent stay or dismissal of the claims, in my view in the circumstances of this case, should be resolved on the hearing of an application for a stay and not on the hearing of this application to amend.

4. By interlocutory application filed 10 May 2019 the defendants have applied for orders including the following:

   "On the grounds that the plaintiff's claim is an abuse of process of the Court that the action be dismissed and that judgment be entered for the defendants on the plaintiff's action.

   Alternatively, … on the grounds that the claim is an abuse of process of the Court that the plaintiff's action be permanently stayed."

5. The application is yet to be heard.  At the time it is heard it should be known whether the statement of claim has been amended as now proposed, whether if amended it is liable to be struck out for the failure to plead the matters in respect of which I have expressed reservations earlier in these reasons and whether the plaintiff wishes to put forward yet another iteration of the statement of claim.  I see no reason why a grant of leave to amend the plea would affect the defendants' prospects on a   dismissal or stay application.  The plaintiff, notwithstanding the pending stay application, asked me to deal with the amendment application first and having heard from the defendants I agreed to that course.

6. The application for a stay based on an abuse of process is best considered independently of the present pleading application and so I will not withhold leave to amend, if otherwise appropriate, on abuse of process grounds.

Conclusion

1. The proposed pleading reintroduces a previously abandoned claim in debt for an account stated on 2 April 2008.  I have found that a fair trial can still occur on this claim.  Further, the proposed pleading now properly characterises the claim for payment for the supply of services and goods.  The allegations in respect of the latter claim have been refined and I have concluded that such refinement, if allowed, will not diminish the chances of a fair trial.

2. I have not accepted the defendants' argument presented to date that the proposed plea fails to disclose causes of action or lacks clarity to the extent that allowing it would tend to prejudice or delay the fair trial of the proceedings. 

3. I do not consider that refusing leave to amend on the grounds of oppression or abuse of process is necessary or desirable.  An application for dismissal or a permanent stay is pending and it will be heard and determined in due course.

4. In considering whether to grant leave I take into account case management principles directed to efficiency including the use of court time, but noting that this proceeding has never reached a stage where it is anywhere near ready for trial.

5. Rule 427(1) calls for a discretionary judgment and the onus is on the plaintiff.  I have been positively persuaded that the justice of the case lies with granting leave to make the amendment sought.

Orders

1. Following the filing of the amendment application on 12 April 2019 the plaintiff put forward a version of the statement of claim dated 22 May 2019 to be substituted for that attached to the application.  It was agreed that in the event that leave to amend the statement of claim was appropriate it would follow that leave to amend the application should be granted.

2. For reasons already stated, I will reserve leave to the defendants to apply to strike out the statement of claim, if amended, on the basis of the matters identified by me but not argued by counsel.

3. These are the orders:

   (1)The application made by letter dated 12 April 2019 for leave to amend the statement of claim is amended by substituting the proposed statement of claim dated 22 May 2019.

   (2)The plaintiff has leave to amend the statement of claim dated 20 February 2014 by substituting the proposed statement of claim dated 22 May 2019.

   (3)In the event that following this grant of leave the plaintiff amends the statement of claim, the defendants have liberty, within 28 days after the amendment, to apply to have the statement of claim struck out insofar as it concerns the recovery of the value of services and goods supplied by reason of the absence of a plea of agency to link requests for services and goods to Frith-Brown and James (in the event that orders were placed by the farm managers rather than Frith-Brown or James directly),  by reason of the absence of a plea of acceptance by the defendants in respect of services supplied and by reason of the absence of a plea under the Sale of Goods Act, s 53(2) that there was a specified time for payment in respect of goods supplied notwithstanding that property in them was not to pass until payment.

4. I will hear the parties as to the costs of the application and the costs thrown away or occasioned by reason of the amendment.