Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia [No 4]
[2013] WASC 353
•25 SEPTEMBER 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ROSEBRIDGE NOMINEES PTY LTD -v- COMMONWEALTH BANK OF AUSTRALIA [No 4] [2013] WASC 353
CORAM: LE MIERE J
HEARD: 12 FEBRUARY, 19 MARCH, 11, 21, 27 & 28 JUNE, 30 JULY, 6, 13, 19 AUGUST, 3 SEPTEMBER 2013
DELIVERED : 25 SEPTEMBER 2013
FILE NO/S: CIV 1235 of 1999
BETWEEN: ROSEBRIDGE NOMINEES PTY LTD
Plaintiff
AND
COMMONWEALTH BANK OF AUSTRALIA
First DefendantCORRS CHAMBERS WESTGARTH (A FIRM)
Second DefendantWFB PTY LTD
Third Defendant
Catchwords:
Practice and procedure - Application to amend statement of claim - No adequate explanation for delay - Advanced stage of litigation - Plaintiff's intention to pursue different course of action - New causes of action exceed indorsement - Proposed statement of claim defective - Prejudice to defendants
Practice and procedure - Application to extend time to file affidavit
Practice and procedure - Application to amend writ of summons - Proposed amendments insufficient to cover new causes of action
Practice and procedure - Application to set aside springing order
Practice and procedure - Application to set aside order that the plaintiff pay the defendants' costs of the application to amend the statement of claim
Legislation:
Fair Trading Act 1987 (WA), s 77, s 79
Limitation Act 1935 (WA)
Rules of the Supreme Court 1971 (WA), O 4 r 3(2), O 21 r 5(1), O 21 r 5(5)
Town Planning Development Act 1928 (WA)
Trade Practices Act 1974 (Cth), s 52, s 87
Result:
Plaintiff's applications are dismissed
Category: B
Representation:
Counsel:
Plaintiff: Ms N Obrart (12 Feb, 19 March, 11, 21, 27 & 28 June) & Mr J F Park (30 July, 6 & 7 Aug) Mr T Grego (Representative of Rosebridge Nominees Pty Ltd) (19 Aug), Mr M Khosa (3 Sept)
First Defendant : Mr R W Douglas
Second Defendant : Mr A T Macknay
Third Defendant : Mr A D Bereyne
Solicitors:
Plaintiff: Park Linfoot Legal Solutions (until 13 Aug 13) Angove Law Pty Ltd (from 30 Aug 13)
First Defendant : Clayton Utz
Second Defendant : MDS Legal
Third Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178
Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
LE MIERE J: The plaintiff, Rosebridge Nominees Ltd (Rosebridge), leased from Victor Gubgub premises in Fremantle on which Rosebridge carried on a nightclub business under the name Metropolis as trustee of a unit trust. Rintag Pty Ltd (Rintag), as trustee for another unit trust, owned land in Northbridge. Rosebridge and Rintag had common directors including Mr Grego. Rosebridge and Rintag engaged the third defendant, WFB Pty Ltd (WFB), to procure project finance to construct a nightclub on the Northbridge site. Rosebridge says that in reliance upon representations by WFB concerning finance facilities and approvals, Rintag entered into construction contracts and Rosebridge advanced funds to Rintag in connection with the construction. In 1996 WFB arranged and Rosebridge, Rintag and the first defendant, the Commonwealth Bank of Australia (CBA), entered into a loan agreement (Loan Agreement) under which CBA agreed to provide loans to Rosebridge and Rintag. The second defendant, Corrs Chambers Westgarth (Corrs), were the solicitors for CBA.
Rosebridge contends that it was a condition of the Loan Agreement that Rosebridge would give CBA a mortgage over its lease. Corrs advised CBA that the Metropolis lease was void and unenforceable because approval had not been given by the Western Australian Planning Commission (WAPC) before it was entered into. WFB, CBA and Corrs each made representations, or caused representations to be made, to Rosebridge to the effect that unless the consent of the WAPC was obtained prior to the lease being executed, the lease was entered into in breach of the Town Planning Development Act 1928 (WA) (TPDA) and was illegal and void. Those representations were false in that the lease was valid and enforceable. CBA refused to advance any further funds to Rosebridge in accordance with the Loan Agreement unless and until Rosebridge and Gubgub executed a new lease to which the WAPC consented in place of the existing lease. That was to the advantage of CBA because Rosebridge had given a charge to Beneficial Finance of the assets of Rosebridge which included the Metropolis lease and as a result, Rosebridge says, the Metropolis lease could not be mortgaged to CBA.
Rosebridge surrendered the existing lease and executed a replacement lease with Gubgub. The replacement lease was on terms much less favourable to Rosebridge than the original lease. In particular, the rent was higher. Rosebridge was unable to pay the new rent. Rosebridge says that as a result of surrendering the original lease and entering into the replacement lease, and of conduct by CBA, Rosebridge and Rintag entered into a sale and management agreement with Emerald Entertainment which included a sale of the Northbridge and Fremantle businesses and Rosebridge managing the Fremantle business. Counsel for Rosebridge, Ms Obrart, said that the transaction with Emerald included an assignment of the lease. By June 2000 as a result of entering into the replacement lease and the Emerald transaction, the Metropolis Fremantle business could not meet the rent obligations for the premises, Emerald was put into liquidation by CBA and Rosebridge lost the right to occupy the Fremantle premises and lost the Metropolis Fremantle business.
In March 1999 Rosebridge commenced this action to recover the losses it claims to have suffered as a result of the conduct of the defendants. Rintag was deregistered and has taken no part in this litigation.
Progress of action from 1999 to 2012
The original statement of claim was dated 10 January 2000 and filed 11 January 2000. It has been amended numerous times. The current statement of claim is dated and filed 1 July 2009. On 10 May 2011 the court made orders with a view to the action proceeding to trial including orders that the plaintiff file and serve its witness statements by 1 July 2011. Subsequently the plaintiff foreshadowed amending its statement of claim on a number of occasions. On 15 November 2012 by consent the court ordered that the plaintiff file and serve a minute of proposed amended statement of claim by 4 December 2012. On 14 December 2012 the plaintiff filed a minute of proposed substituted statement of claim. On 18 December 2012 the plaintiff filed a minute of revised proposed amended substituted statement of claim. On 20 December 2012 the court made directions for hearing the plaintiff's application to amend its statement of claim in accordance with the minute of 18 December 2012 and made orders extending the time for the plaintiff to deliver its witness statements.
12 February 2013 orders
On 6 February 2013 the plaintiff filed a further minute of revised proposed amended substituted statement of claim and on 11 February 2013 applied for leave to amend the statement of claim in terms of that minute. The defendants oppose the application on the ground, amongst other things, of the delay. On 12 February 2013 the court made orders including orders to the following effect:
1.By 19 February 2013 the plaintiff file and serve any affidavit in support of its application to amend the statement of claim …
2.By 15 March 2013 the plaintiff file and serve affidavits identifying and attaching a signed copy of each additional witness statement upon which the plaintiff seeks to rely at the trial of the action and at the hearing of its application to amend its statement of claim.
…
4.Upon the first to occur of the plaintiff failing to comply with any part of any one or more of orders 1 and 2:
(a)the application to amend its statement of claim is dismissed;
(b)the plaintiff pay the defendants' costs of the application to amend its statement of claim on an indemnity basis.
Application to amend statement of claim dismissed
The plaintiff failed to comply with order 2 in that the plaintiff did not by 15 March 2013 file and serve an affidavit or affidavits identifying and attaching witness statements which the plaintiff seeks to rely at the trial of the action and the hearing of the application to amend the statement of claim. The plaintiff filed and served an affidavit attaching a witness statement on Monday, 18 March 2013. Order 4 of the orders of 12 February 2013 provided that upon the first to occur of the plaintiff failing to comply with any part of any one or more of order 1 and order 2, amongst other things, the application is dismissed. Accordingly, when the plaintiff failed to comply with order 2, the application to amend the statement of claim stood dismissed.
Application to extend time to file affidavit
At the request of the plaintiff the matter came on for further hearing on 19 March 2013. Ms Obrart, who appeared as counsel for the plaintiff, applied orally for an order that order 2 of the orders made on 12 February 2013 be varied such that the time for the plaintiff to file and serve its affidavit and attached witness statements be extended to 4.30 pm on 20 March 2013. The defendants opposed the extension of time. In essence, counsel for the first defendants, Mr Douglas, whose arguments were adopted by the other defendants, submitted that there was no proper explanation for the failure to comply with the order in that there was no proper explanation for the delay in filing and serving the affidavit. Further, the defendants submitted that the plaintiff had not brought forward any evidence supporting its application for leave to amend the statement of claim in that the plaintiff had not explained the delay in applying to amend its statement of claim. Furthermore, the defendants submitted that there were serious defects in the proposed amended statement of claim. The defendants submitted that in those circumstances there was no real prospect of the application to amend the statement of claim succeeding and hence it would be futile to grant the extension of time which would permit the application to go forward. Counsel for the plaintiff submitted that an explanation for the failure to comply with the order was to be found in the affidavits of Mr Grego and Mr Hammond, the plaintiff's then solicitor, sworn on 18 March 2013. I was not satisfied that the failure to comply with the order had been properly explained. However, if the application to amend the statement of claim stood dismissed the plaintiff would be at liberty to bring a further application to amend its statement of claim. In those circumstances I ordered that the plaintiff's application to extend the time for filing and serving the affidavit annexing the witness statements should be adjourned and heard together with the plaintiff's application to amend the statement of claim, because the merits of the plaintiff's application to amend the statement of claim is relevant to the application for an extension of time.
Further proposed amended statement of claim
On 20 May 2013 the plaintiff filed a further revised proposed amended substituted statement of claim dated 20 May 2013 and a chamber summons which sought the following orders:
…
4.The Plaintiff have leave to file and serve on or before 10 August 2013 further affidavits in support of its Application for the extension of Orders 2 and 4 of the Court's Orders made on 12 February 2013.
5.The Plaintiff's Oral Application made 19 March 2013, being for orders that:
'Order 2 of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be varied such that the Plaintiff file and serve its Affidavit and attached Witness Statement on or before 4.30pm on 20 March 2013',
be amended to an Order that:
'Order 2 of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be varied such that the Affidavit of Mr Tony Grego filed and served on 21 March 2013 stand as the Plaintiff's Affidavit and Witness Statement required to be filed and served by Order 2, and the Plaintiff file and serve any Supplementary Evidentiary Material on or before 4.30pm on 10 August 2013'.
6.Order 4(a) of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be set aside.
7.Order 4(b) of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be set aside.
8.The Defendants pay the Plaintiffs costs thrown away on an indemnity basis by reason of their opposition to the lifting of the effect of Order 4(a) of the Court's Orders made on 12 February 2013.
…
Hearing of plaintiff's applications to extend time and amend statement of claim
The matter came on for hearing on 11 June 2013. Ms Obrart, who appeared as counsel for the plaintiff, made submissions in support of the plaintiff's application to amend its statement of claim. Submissions could not be completed on that day and the matter was adjourned to a date to be fixed. On 21 June 2013 the court made orders that the plaintiff file and serve any further minute of amendments it seeks to make to the statement of claim on or before 26 June 2013. On 26 June 2013 the plaintiff filed a further revised proposed amended substituted statement of claim dated 26 June 2013 (PASSOC). The matter came on for further hearing on the afternoon of 27 June 2013 and proceeded for the afternoon. The matter was adjourned to 28 June.
On 28 June Ms Obrart, counsel the plaintiff, whilst maintaining that the proposed amendments to the statement of claim fell within the indorsement on the writ, applied to amend the writ. Argument proceeded that day. At the conclusion of the hearing that day I directed that the plaintiff file and serve a list of all outstanding applications for which it seeks relief. On 4 July the plaintiff filed that list. The list states that the orders sought by the plaintiff are as follows:
1.The Plaintiff have leave to amend its Statement of Claim in terms of the Minute of Revised Proposed Amended Substituted Statement of Claim dated 26 June 2013[1].
[1] Application dated 11 February 2013 for Leave to Amend Statement of Claim pursuant to Minute of Consent Orders dated 20 December 2012, amended by the Plaintiff's Oral Application on 27 June 2013 and supported by Affidavits of John Carpenter Hammond sworn 27 September 2013 and 29 October 2012, the affidavits of Patrick James Lalor Tyson sworn 6 November 2012, 6 February 2013 and 11 February 2013, the Affidavits of Tony Grego sworn 10 June 2013, 20 May 2013 and 4 July 2013.
2.The Minute of Revised Proposed Amended Substituted Statement of Claim dated 26 June 2013 stand as the Plaintiff's Statement of Claim and service thereof be dispensed with[2].
[2] Application dated 11 February 2013 for Leave to Amend Statement of Claim pursuant to Minute of Consent Orders dated 20 December 2013, amended by the Plaintiff's Oral application on 27 June 2013 and supported by Affidavits of John Carpenter Hammond sworn 27 September 2012 and 29 October 2012, the Affidavits of Patrick James Lalor Tyson sworn 6 November 2012, 6 February 2013 and 11 February 2013, the Affidavits of Tony Grego sworn 10 June 2013, 20 May 2013 and 4 July 2013.
3.The Plaintiff pay the Defendant's costs thrown away by reason of the Amended Statement of Claim[3].
[3] Application dated 11 February 2013 for Leave to Amend Statement of Claim pursuant to Minute of Consent Orders dated 20 December 2012.
4.The Plaintiff have leave to file and serve on or before 10 August 2013 further affidavits in support of its Application for the extension of Orders 2 and 4 of the Court's Orders made on 12 February 2013[4].
[4] Chamber Summons dated 20 May 2013, amended by the Plaintiff's Oral Application on 11 June 2013 supported by Affidavit of John Carpenter Hammond sworn 18 March 2013, Affidavit of Jacinta Breigh Pitos sworn 20 May 2013 and Affidavits of Tony Grego sworn 18 March 2013, 20 May 2013, 10 June 2013 and 4 July 2013.
5.The Plaintiff's Oral Application made 19 March 2013, being for Orders that:
'Order 2 of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be varied such that the Plaintiff file and serve its Affidavit and attached Witness Statement on or before 4.30pm on 20 March 2013',
be amended to an Order that:
'Order 2 of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be varied such that the Affidavit of Mr Tony Grego filed and served on 21 March 2013 stand as the Plaintiff's Affidavit and Witness Statement required to be filed and served by Order 2, and the Plaintiff file and serve any Supplementary Evidentiary Material on or before 4.30pm on 10 August 2013'[5].
6.Order 4(a) of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be set aside[6].
7.Order 4(b) of the Orders made by the Honourable Justice Le Miere on 12 February 2013 be set aside[7].
8.The Defendants pay the Plaintiffs costs thrown away on an indemnity basis by reason of their opposition to the lifting of the effect of Order 4(a) of the Court's orders made on 12 February 2013[8].
9.The Plaintiff have leave, under Order 21 Rule 5 of the Supreme Court Rules 1971 (WA), to amend its Writ of Summons in terms of the Minute of Amended Writ of Summons dated 28 June 2013[9].
10.The Plaintiff pay the Defendants' costs thrown away occasioned by the amendment in any event[10].
[5] Chamber Summons dated 20 May 2013, amended by the Plaintiff's Oral Application on 11 June 2013 supported by Affidavit of John Carpenter Hammond sworn 18 March 2013, Affidavit of Jacinta Breigh Pitos sworn 20 May 2013 and Affidavits of Tony Grego sworn 18 March 2013, 20 May 2013, 10 June 2013 and 4 July 2013.
[6] Chamber Summons dated 20 May 2013, amended by the Plaintiff's Oral Application on 11 June 2013 supported by Affidavit of John Carpenter Hammond sworn 18 March 2013, Affidavit of Jacinta Breigh Pitos sworn 20 May 2013 and Affidavits of Tony Grego sworn 18 March 2013, 20 May 2013, 10 June 2013 and 4 July 2013.
[7] Chamber Summons dated 20 May 2013, amended by the Plaintiff's Oral Application on 11 June 2013 supported by Affidavit of John Carpenter Hammond sworn 18 March 2013, Affidavit of Jacinta Breigh Pitos sworn 20 May 2013 and Affidavits of Tony Grego sworn 18 March 2013, 20 May 2013, 10 June 2013 and 4 July 2013.
[8] Chamber Summons dated 20 May 2013.
[9] Chamber Summons dated 28 June 2013 and supported by Affidavits of John Carpenter Hammond sworn 27 September 2012 and 29 October 2012, the Affidavits of Patrick James Lalor Tyson sworn 6 November 2012, 6 February 2013 and 11 February 2013, the Affidavits of Tony Grego sworn 10 June 2013, 20 May 2013 and 4 July 2013.
[10] Chamber Summons dated 28 June 2013.
The matter came on for further hearing on 30 July 2013. Mr Park, who was the solicitor with the conduct of the matter on behalf of the plaintiff, appeared as counsel and informed the court that no other counsel was then engaged by the plaintiff. The plaintiff had not filed further evidence in support of its applications as directed on 28 June 2013. The time for the plaintiff to do so was extended and the matter was adjourned to 6 August 2013.
Plaintiff's solicitor ceases to act
On 6 August 2013 when the matter next came before the court Mr Park informed the court that his retainer as solicitor for the plaintiff had been terminated and that he had caused a chamber summons to be issued for an order that his firm cease to be the solicitors for the plaintiff. I adjourned the matter to 13 August. The matter came on for further hearing on 13 August. On 13 August I made an order that the plaintiff's former solicitors had ceased to be its solicitors. In the meantime Mr Grego had filed a chamber summons seeking an order that he appear before the court to advocate on the plaintiff's behalf. I adjourned the matter, including Mr Grego's application, to 19 August 2013. On 19 August I dismissed Mr Grego's application for leave to appear for the plaintiff and adjourned the matter for further hearing on 3 September 2013.
Hearing of applications concluded
On 30 August 2013 Angove Law Pty Ltd filed a notice of solicitors acting for the plaintiff. On 3 September 2013 Mr Khosa of Angove Law Pty Ltd appeared for the plaintiff. Mr Khosa applied for an adjournment of 28 days. I refused the adjournment and stated that the court would proceed with the hearing of the outstanding applications as listed in the consolidated list of applications of 4 July 2013. Mr Khosa did not make any submissions in relation to those applications. Counsel for the defendants adopted their written submissions. Counsel for WFB made some further oral submissions. I then reserved my decision on all the outstanding applications. These are my reasons for determining those applications.
The plaintiff's applications to amend its statement of claim, to amend its writ of summons, to set aside order 4 of the 12 February 2013 orders and to extend the time for the filing of affidavits under order 2 of the 12 February 2013 orders are inter‑related. It is convenient to first consider the application to amend the statement of claim because no purpose would be served in setting aside the springing order made on 12 February 2013 if the court would not, in any event, give leave to amend the statement of claim in accordance with the proposed amended statement of claim.
The writ and the proposed amended statement of claim
The defendants resist the orders sought by Rosebridge on the grounds, amongst others, that the plaintiff has provided no adequate explanation for the delay and the proposed amendments to the statement of claim are defective, and in any event, if allowed would prejudice the defendants. It is convenient to begin by considering the case raised by the writ and the current statement of claim which is the second substituted statement of claim dated and filed 1 July 2009 (SSOC).
Indorsement of claim
The writ was indorsed as follows:
The Plaintiff's claim is for damages suffered by the Plaintiff as a result of:
1.it entering into a lease (Lease) with a third party dated 9 March 1996 in relation to premises commonly known as 58 South Terrace, Fremantle, Western Australia (Premises) in place of a lease/extension deed (extension deed) due to:
a.negligent misstatement made by the first, second and third Defendants to the Plaintiff and its employees and agents in relation to the validity of the extension deed;
b.conduct of the first second and third Defendants in contravention of sections 52, 51AA and 53A of the Trade Practices Act (Cth) and sections 10 and 12 of the Fair Trading Act (WA) for being knowingly concerned in or aiding or abetting conduct in contravention of those provisions;
2.A breach of contract made between the Plaintiff and the First Defendant during or about January 1996 for the provision of financial accommodation by the First Defendant to the Plaintiff.
Current statement of claim
The SSOC raises the following causes of action. Paragraph 24 pleads that WFB engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (TPA) by making the April 1995 Statements (pleaded in [18]) and the May 1995 Statements (pleaded in [19]) which conveyed to Rosebridge and Rintag the Finance Approval Representations (pleaded in [20]). Paragraph 22 pleads that the Finance Approval Representations were false or misleading or deceptive. Paragraph 25 pleads that WFB breached the duties of care it owed to Rosebridge by making the Finance Approval Representations.
Paragraph 36 pleads that WFB contravened s 52 of the TPA by making the WFB Lease Statements which are pleaded in [32]. Paragraph 37 pleads that WFB breached its duty of care to Rosebridge by making the WFB Lease Statements.
Paragraph 43 pleads that Corrs contravened s 52 of the TPA by making the Corrs Lease Representation pleaded in [40] or the Alternative Corrs Lease Statements pleaded in [41].
Paragraph 49 pleads that CBA contravened s 52 of the TPA by making the CBA Lease Statements pleaded in [45] to WFB which [50] pleads caused WFB to make the WFB Lease Statements to Rosebridge. Paragraph 53 pleads that CBA breached its duty of care to Rosebridge by making the CBA Lease Statements. Paragraph 60 pleads that CBA contravened s 52 of the TPA by reason of the Corrs Lease Statements or alternatively the Alternative Corrs Lease Statements, which by reason of s 84 of the TPA was conduct engaged in by CBA. Paragraph 64 pleads that CBA breached the Loan Agreement pleaded in [28] by refusing to advance funds in accordance with the Loan Agreement unless Rosebridge and Gubgub executed a new lease to which the WAPC consented in place of the First Lease, that is the lease between Gubgub and Rosebridge dated 4 May 1988 as varied in 1990 for a period which expired in May 2011.
Rosebridge pleads that it has suffered the following loss and damage:
A.Additional rent payable during the 1998, 1999 and 2000 financial years.
B.Reduced profits as a consequence of Rosebridge's inability to properly advertise and market Metropolis Fremantle being constrained by the requirement to pay higher rent.
Rosebridge claims the following relief:
A.Against each of CBA, Corrs and WFB damages pursuant to s 82 of the TPA, further or alternatively s 79 of the Fair Trading Act 1987 (WA) (FTA), further or alternatively compensation pursuant to s 87 of the TPA, and further or alternatively s 77 of the FTA.
B.Against CBA and WFB common law damages.
The proposed substituted statement of claim (PASSOC)
The PASSOC pleads a number of causes of action. It is convenient to consider the causes of action sought to be pleaded against each of the defendants.
Causes of action against WFB
In [37] and [38] Rosebridge pleads that WFB breached the fiduciary duty to Rosebridge pleaded in [34] by procuring unauthorised brokerage fees from Rosebridge. This is a new cause of action. The SSOC pleads no cause of action that WFB breached a fiduciary duty to Rosebridge. An allegation or claim in respect of a cause of action for breach of fiduciary duty by WFB is not mentioned in the writ and does not arise from facts which are the same as, or include or form part of, facts giving rise to a cause of action mentioned in the writ. A proposed amendment to the statement of claim which would exceed the indorsement must be refused unless the indorsement is amended: Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233, 238 ‑ 239. The plaintiff has applied to amend the indorsement. However, the amendment does not mention or refer to a claim against WFB for breach of fiduciary duty in relation to the payment of brokerage fees.
Paragraph 39 pleads that WFB breached the WFB Engagement Agreement pleaded in [30] by procuring the unauthorised brokerage fees. This is a new cause of action. The SSOC pleads no cause of action that WFB breached the WFB Engagement Agreement or any cause of action for breach of contract. The amendment to plead the new cause of action exceeds the indorsement and must be refused unless the indorsement is amended. The plaintiff has not applied to amend the indorsement to include an action for breach of contract against WFB. In any event, such an action would be statute barred and the court has no power to amend the writ to introduce a statute barred cause of action.
Paragraphs 52 and 53 plead in effect that WFB contravened s 52 of the TPA by making the Rintag Facility Approval Representation pleaded in [42]. This appears to be a new way of pleading the claim that WFB contravened s 52 of the TPA pleaded in SSOC [36].
Paragraph 54 pleads that WFB breached its fiduciary duty to Rosebridge pleaded in [34] by making the Construction Works Representation pleaded in [41] and the Rintag Facility Approval Representation pleaded in [42]. This is a new cause of action. The SSOC pleads no cause of action that WFB breached a fiduciary duty to Rosebridge. The new cause of action exceeds the indorsement on the writ and the plaintiff has not applied to amend the indorsement to include an action for breach of fiduciary duty by WFB.
Paragraph 56 pleads that WFB breached its duty of care to Rosebridge pleaded in [35] by failing to take reasonable care to ensure that the Works Representation, which I assume to be a reference to the Construction Works Representation pleaded in [41], and the Rintag Facility Approval Representation pleaded in [42]. This appears to be a new way of pleading the claim that WFB breached its duty of care pleaded in SSOC [25].
Causes of action against CBA
The first cause of action pleaded against CBA is for breach of the Facility Agreement. The Facility Agreement appears to be whichever of the 1995 Facility Agreement pleaded in [62], the varied 1995 Facility Agreement referred to in [64] or the 1996 Facility Agreement referred to in [68] is the effective agreement by which CBA agreed to make a loan or make a facility available to Rosebridge and Rintag. Rosebridge pleads that CBA breached the Facility Agreement in February or March 1996 by informing Rosebridge and Rintag that it would not advance or make available any further funds to Rintag or alternatively to Rintag and Rosebridge unless Rosebridge entered into a new lease with Gubgub in replacement of the Second Lease. This appears to be a new way of pleading the claim that CBA breached the express terms of the Facility Agreement by refusing to advance funds unless Rosebridge entered into a new lease with Gubgub which is pleaded in [64] of the SSOC.
Paragraph 112 pleads that CBA breached a term that CBA would not unreasonably or without proper cause refuse to advance funds to Rosebridge or Rintag implied in the Facility Agreement by refusing to advance funds unless Rosebridge entered into a new lease with Gubgub. This is new insofar as it pleads that CBA's refusal to advance funds unless Rosebridge entered into a new lease with Gubgub is a breach of an implied term of the Facility Agreement.
The second cause of action pleaded against CBA is for misleading and deceptive conduct in contravention of s 52 of the TPA. Paragraph 114 pleads in effect that CBA contravened s 52 of the TPA by making the CBA Lease Representation pleaded at [110]. This appears to be a new way of pleading the claim that CBA contravened s 52 of the TPA pleaded in [60] of the SSOC.
The third cause of action, pleaded in [115], is in effect that CBA contravened s 52 of the TPA by entering into the Facility Agreement, partly executing it by advancing funds to Rosebridge and Rintag, and then proceeding to refuse to advance further funds pursuant to the Facility Agreement unless a new lease was executed. This appears to be a new way of pleading the claim that CBA contravened s 52 of the TPA pleaded in [60] of the SSOC.
The fourth cause of action against CBA is for breach of fiduciary duty. At [119] it is pleaded that CBA breached the CBA Fiduciary Duty by doing a number of things including refusing to advance further funds unless a new lease was executed and requiring or causing a new lease to be executed. The CBA Fiduciary Duty appears to be a reference to the fiduciary duties pleaded in [118]. This is a new cause of action. The SSOC does not plead any claim that CBA breached any fiduciary duty. The proposed amendment exceeds the indorsement on the writ and must be refused unless the writ is amended. The plaintiff has applied to amend the indorsement of claim to add a claim for damages as a result of CBA's breach of fiduciary duty owed to Rosebridge. I will refer to that application later in these reasons.
The plaintiff further pleads a breach of fiduciary duty by CBA in [120] where the plaintiff pleads that CBA breached its fiduciary duty to Rosebridge by facilitating WFB's breach of agreement with Rosebridge or fiduciary duty owed to Rosebridge by payment of the unauthorised fees to WFB. This is a new cause of action. The SSOC does not plead any claim that CBA breached any fiduciary duty. The proposed amendment must be refused unless the writ is amended. The plaintiff has applied to amend the writ. However, the proposed amendments do not include any breach of fiduciary duty relating to facilitating WFB's breach of agreement with Rosebridge or fiduciary duty owed to Rosebridge by payment of the unauthorised fees to WFB. Therefore, the amendment must be refused.
The sixth cause of action pleaded against CBA is a cause of action based on unconscionability. Paragraph 125 pleads that CBA took unfair or unconscientious advantage of Rosebridge's position of special disadvantage by refusing to advance further funds unless a new lease was executed. This is a new cause of action. The SSOC does not plead any cause of action based on unconscionable conduct. The proposed amendment exceeds the indorsement on the writ. The plaintiff has applied to amend the indorsement to claim damages as a result of unconscionable conduct. I will refer to that application later in these reasons.
Paragraph 130 pleads that CBA engaged in unconscionable conduct by entering the Facility Agreement, partly executing it by the advance of funds to Rosebridge and Rintag, and then proceeding to make the CBA Lease Representation and/or refusing to advance further funds unless a new lease was executed. This is a new cause of action. The SSOC does not plead any cause of action based on unconscionable conduct. The proposed amendment exceeds the indorsement on the writ. The plaintiff has applied to amend the writ. I will consider that application later in these reasons.
The seventh cause of action pleaded against CBA is for breach of CBA's Duty of Care pleaded in [133]. At [135] it is pleaded that CBA breached CBA's Duty of Care by:
(i)making the CBA Lease Statements; and/or
(ii)failing to correct or withdraw the CBA Lease Statements;
(iii)the Refusal to Advance Further Funds Unless a New Lease Executed;
(iv)payment of the Unauthorised Brokerage Fees;
(v)failing to advise Rosebridge to obtain independent legal advice with respect to its dealings with the CBA concerning the Facility Agreement and the Second Lease.
The cause of action for breach of duty by CBA is pleaded in [53] of the SSOC. Paragraph 135 of the PASSOC pleads the breach of duty case more fulsomely and by reference to new facts.
Causes of action against Corrs
The PASSOC pleads two causes of action against Corrs. The first cause of action is for misleading or deceptive conduct in contravention of s 52 of the TPA or s 10 of the FTA. Paragraphs 142 to 144 plead that Corrs contravened s 10 of the FTA or s 52 of the TPA by making the Corrs Lease Statements which were false, misleading or deceptive. This appears to be a new way of pleading the claim that Corrs contravened s 52 of the TPA pleaded in [43] of the SSOC.
The second cause of action against Corrs is for breach of Corrs Duty of Care pleaded in [146] and [147]. Paragraph 149 pleads that Corrs breached the Corrs Duty of Care by making the Corrs Lease Statements. This is a new cause of action. The SSOC does not plead any cause of action that Corrs breached a duty of care. However, the claim arguably falls within the indorsement of claim insofar as the indorsement claims damages as a result of negligent misstatement by Corrs in relation to the validity of the Extension Deed.
New prayer for relief
In the PASSOC Rosebridge claims the following relief which is claimed in the SSOC:
A.Against each of CBA, Corrs and WFB damages pursuant to s 82 of the TPA, further or alternatively s 79 of the FTA, further or alternatively compensation pursuant to s 87 of the TPA, and further or alternatively s 77 of the FTA.
B.Against CBA and WFB common law damages.
The PASSOC also claims the following additional relief not claimed in the SSOC:
A.Common law damages against Corrs and equitable damages against CBA, Corrs and WFB.
B.Against CBA restitution and an account of profits.
Amendment of writ
Order 21 r 5(1) of the RSC empowers the court to allow the plaintiff to amend its writ at any stage of the proceedings. However, O 21 r 5(1) does not give a court a general power to allow an amendment after the expiry of a period of limitation in a case which does not fall within O 21 r 5(5). The proposed amended indorsement of claim includes amendments to the indorsement to introduce a claim for damages as a result of CBA's breach of a fiduciary duty relating to various instruments and transactions and a claim for damages as a result of 'unconscionable conduct contrary to the unwritten law at the material time'. The latter claim is not further elaborated upon in the proposed indorsement. The amendment to the indorsement also seeks to amend the claim for relief to include a claim for damages or equitable damages against each of the defendants and a claim against CBA for restitution and/or an account of profits. These are major amendments to add new causes of action 14 years after the action was commenced and even longer since the claims or causes of action arose.
Amendment of writ and statement of claim with leave
The starting point for determining an application to amend is the rules governing such applications. Amendments to the writ and to the statement of claim which raise entirely new issues are to be determined in accordance with the general discretion in O 21 r 5 read with the objects in O 1 r 4B. A party does not have a right to amend its pleadings at any time subject to costs. Leave to amend depends on the discretion of the court which must take all relevant matters into account, including the concerns of case management which are embodied in O 1 r 4B. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 the High Court indicated that matters relevant to the exercise of the judicial discretion to allow amendments include:
1.the extent of delay in seeking leave and its associated costs;
2.the point the litigation has reached;
3.the prejudice to the other party if leave is granted – including the financial strain of ongoing litigation, which even indemnity costs may not heal;
4.the prejudice to other litigants and the efficient use of court resources;
5.the applicant's explanation for the delay;
6.the nature and importance of the amendment to the applicant; and
7.the need to maintain public confidence in the judicial system.
The extent of delay
The delay is extreme. The action was commenced 14 years ago. It concerns events which occurred between 1995 and the commencement of the action in 1999, that is between 14 and 18 years ago. The new cause of action against WFB for breach of the Engagement Agreement was barred by the Limitation Act 1935 (WA) more than 10 years ago. The new claims for breach of fiduciary duty and for unconscionable conduct, whilst not barred by the limitations statutes, are claims which arose more than 14 years ago.
The point the litigation has reached
The action has not been set down for trial. However, it was at an advanced stage when the plaintiff first foreshadowed amendments to the statement of claim. The court made orders for the action to proceed to trial, including the usual orders for filing and serving witness statements, in May 2011.
Prejudice to defendants
It is obvious that the defendants will be prejudiced if leave is granted to amend the writ and the statement of claim in accordance with the PASSOC. The prejudice arises in two areas. First, the defendants will have to respond to new causes of action which may require investigating events that occurred long ago with a view to obtaining further witness statements and possibly relevant documents. The new causes of actions sought to be brought against CBA include claims for breach of fiduciary duty and unconscionable conduct. Those claims raise matters beyond the scope of the matters that have been in issue until now. Secondly, the trial and resolution of these proceedings, which have already been going on for 14 years, will be further delayed. The delay is likely to be significant because of the scope of the new claims raised. Delay of itself is a detriment to corporations, even a major bank.
Explanation for the delay
In Aon the plurality said:
Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case [103].
From an early stage in the plaintiff's application to amend, both the court and the defendants drew the plaintiff's attention to the need for an explanation for the delay. Whilst the plaintiff was being represented by solicitors it presented an explanation of sorts for the delay. In an affidavit sworn 6 February 2013 Patrick Tyson sought to explain the circumstances surrounding the revisions to the plaintiff's statement of claim. In essence, Mr Tyson said that Ms Obrart had been retained as counsel, that she had spent a great deal of time reviewing the pleadings and the case generally and as a result Ms Obrart discovered a large number of additional causes of action which arose from the core facts and circumstances of the matter which formed the basis of proceedings as currently pleaded.
The plaintiff provided no further explanation for the delay until its then solicitors, Park Linfoot Legal Solutions, ceased acting for it. Mr Grego swore and filed an affidavit on 2 August 2013 which purported to be in support of Rosebridge's application to amend the statement of claim and writ of summons. Mr Grego was not entitled to file the affidavit. Order 4 r 3(2) provides that a corporation may not begin or carry on any proceedings in the Supreme Court otherwise than by a solicitor. In the light of O 4 r 3(2), and notwithstanding the inherent jurisdiction of the court to regulate its proceedings, Mr Grego was not at liberty to file an affidavit on behalf of the plaintiff company in support of its applications to amend the writ and the statement of claim and set aside the springing orders. To allow Mr Grego to rely upon his affidavit would be to allow him to 'carry on' the present proceedings: Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178 [50] (Hasluck J).
Notwithstanding that Mr Grego was not entitled to rely upon his affidavit of 2 August 2013, and a supplementary affidavit sworn on 5 August 2013 and a further affidavit sworn 12 August 2013, counsel for the first defendant, Mr Douglas, has made reference to those affidavits in the course of opposing the orders sought by the plaintiff. Mr Douglas submitted that parts of Mr Grego's affidavit are scandalous. I will not refer to more than a few paragraphs of Mr Grego's affidavit. In [4] of his affidavit sworn 2 August 2013, Mr Grego states:
The matters outlined below are in response to the question of AON. This case has been frustrated from the beginning and the causes of delay are many. Much of the delay goes to the Plaintiff being obstructed in pleading this case in full and the frustrations it has experienced in trying to achieve this objective.
In [7] Mr Grego said that the plaintiff has had continuous problems in having its case represented as it wants it presented and believes it should be presented to the court. In [8] he states that the plaintiff still has before the court a defective statement of claim and writ of summons
which does not reflect the true facts of this case or the loss and damage suffered by Rosebridge. The plaintiff has always believed that it [sic] Statement of Claim and Writ of Summons were deficient but has never had a solicitor prepared to make the required changes.
At [19] Mr Grego swears:
The Plaintiff to date has not had a Solicitor willing to present this case in it's [sic] entirety and make clear the truth of the matters in the case.
Mr Grego goes on to make serious and sweeping allegations of wrongful acts by the defendants without descending to particulars. Mr Grego alleges that a succession of lawyers who acted for the plaintiff failed to act in accordance with its instructions. Mr Grego makes serious allegations against his former solicitors and the defendants involving falsifying and switching documents and removing matters from witness statements. Mr Grego swears:
I have known for some time that the way in which the Plaintiff's case is being pleaded before Your Honour is not the truth in the events that had taken place and is not as the Plaintiff has instructed its Solicitors to plead the case.
The Pleadings continue to be a constant cover up of wrong doings by Legal Practitioners, Senior Bank Officials, Finance Brokers and Liquidators [273] ‑ [274].
Mr Grego describes the case the plaintiff wishes to put as follows:
The Plaintiff has the evidence to prove abuse of process and the following facts being done and continue to be done. Fraud, Conspiracy, Manipulation of Funds, Unauthorised Withdrawal from the Plaintiff's Bank Accounts, Double Interest Charges, Unauthorised Direct Debits from Bank Accounts, Shredding of Documents, Documents not being Discovered. The passing on of Confidential Information without the authority of the Plaintiff. Fabricated file notes [275].
Mr Grego says:
I had instructed Solicitors and Counsel to Plead Fraud, Conspiracy, Dishonesty and it has not been done. Most of the evidence to prove these facts is already filed in court and will be relied upon in trial by the Plaintiff. It is also evidenced further in this Witness Statement [276].
There is no adequate explanation for why the plaintiff delayed 14 years in seeking to prosecute the new causes of action in the PASSOC. Statements to the effect that these causes of action were discovered by Ms Obrart when she undertook a review of the pleadings and of the case generally fail to explain why those causes of action were not formulated earlier. There is no evidence that Mr Grego or anyone else instructing the plaintiff's solicitors on its behalf had informed its solicitors of the new claims sought to be made in the PASSOC, or the facts underlying them. To the contrary, Mr Grego's affidavit is to the effect that the instructions he gave to the plaintiff's succession of solicitors were of other allegations which have not at any time been included in any pleading or proposed pleading. There is no explanation from any of the plaintiff's former solicitors to the effect that they had been instructed of the new claims the plaintiff makes in the PASSOC, or the facts giving rise to them, but had failed to include them in a pleading. There is no satisfactory explanation for the plaintiff's delay in seeking to make the amendments in the PASSOC.
Nature and importance of proposed amendment to applicant
It is difficult to find that the proposed amendments are important to Rosebridge. On the one hand, its solicitors and counsel between December 2012 and July 2013 brought forward the proposed amendments which, if made, would enable the plaintiff to pursue causes of action and damages which it is not open to the plaintiff to pursue on the current pleadings. On the other hand, the plaintiff has terminated the retainer of successive solicitors and since the plaintiff's last solicitors, Park Linfoot Legal Solutions, ceased acting for it the plaintiff has not confirmed that it wishes to prosecute the case put in the PASSOC. To the contrary, Mr Grego, on behalf of the plaintiff, has informed the court that the plaintiff wishes to pursue a different case or different cases from those formulated in the PASSOC and other versions of the statement of claim drafted by its legal representatives from time to time. The plaintiff's present solicitor, Mr Khosa, did not inform the court that the plaintiff does not wish to pursue a case based on the allegations made by Mr Grego in his affidavits. If, as Mr Grego says, the plaintiff wishes to pursue claims for the matters stated in his affidavit then the plaintiff will have to frame another and very different statement of claim. Refusal of leave to amend in accordance with the PASSOC will not set back the plaintiff from that course of action.
Need to maintain public confidence in judicial system
The history of the plaintiff's application to amend its statement of claim in accordance with the PASSOC weighs against giving leave to amend in those terms. The plaintiff has failed on numerous occasions to comply with directions made for the hearing and resolution of its application. The plaintiff has reformulated the proposed pleading on a number of occasions. The plaintiff, through Mr Grego, has most recently informed the court, in effect, that it wishes to pursue a different case than the case made in the PASSOC, a case involving grave allegations against the defendants that have not been previously formulated or brought to the court's attention.
Proposed statement of claim is defective
The PASSOC pleads many causes of action that are not mentioned in the writ and do not arise from facts which are the same as, or include or form part of, facts giving rise to a cause of action mentioned in the writ. I have identified those causes of action when outlining the PASSOC. A proposed amendment to the statement of claim which would exceed the indorsement must be refused unless the indorsement is amended. The plaintiff has applied to amend the indorsement. However, the proposed amendments to the writ do not mention or refer to many of the new causes of action sought to be pleaded in the PASSOC. I have identified those new causes of action when outlining the PASSOC. The amendments to introduce those new causes of action must be refused.
The defendants submit that the pleadings of many of the new causes of action disclose no reasonable cause of action, may prejudice, embarrass or delay the fair trial of the action or are an abuse of the processes of the court. There is merit in many of the defendants' submissions. To consider each of those submissions is unnecessary and would unduly prolong the delivery of these reasons for judgment. Nevertheless, those matters weigh against granting leave to amend the statement of claim in accordance with the PASSOC.
Leave to amend writ and statement of claim refused
In deciding whether to exercise its discretion to give leave to amend the writ and the statement of claim the court must take all relevant matters into account. Having regard to all of the circumstances I would decline to exercise my discretion to amend the statement of claim or the writ, if the springing order were set aside and the court was free to do so. I would decline to exercise my discretion for the following principal reasons. First, the delay in seeking the amendments is very long. Secondly, the plaintiff has not given a satisfactory explanation for the delay. Thirdly, the plaintiff has informed the court that the case it wishes to make is not the case set out in the PASSOC. Fourthly, the statement of claim cannot be amended in accordance with the PASSOC because it pleads many causes of action that exceed the indorsement and are not covered by the proposed amendments to the writ. It is not appropriate to consider whether the plaintiff should be given leave to amend the statement of claim in accordance with some of the amendments in the PASSOC and not others because the plaintiff has stated that it wishes to present a different case.
Application to extend time for filing affidavits
The plaintiff has applied to vary order 2 of the orders made on 12 February 2013 by extending the time for the plaintiff to file and serve its affidavit and attached witness statement to 10 August 2013. The purpose of seeking an extension of time to 10 August 2013 rather than 20 March 2013 was to enable the plaintiff to file a further witness statement. 10 August 2013 has come and gone and the affidavit has not been filed. There is no purpose in extending the time, except that it would, in effect, stop the springing order springing and enable the plaintiff to proceed with its application to amend its statement of claim in accordance with the PASSOC. I have found that the plaintiff should not, in any event, be given leave to amend its statement of claim in accordance with the PASSOC. Accordingly, that purpose is not advanced by extending the time under order 2 of the orders made on 12 February 2013. If the plaintiff wishes to put on further witness statements then it should make a fresh application to do that. The application would need to identify the further statements to be filed and explain the reasons for the delay in filing them.
Application to set aside order 4 made 12 February 2013
The plaintiff applies to set aside order 4(a) and 4(b) of the orders made on 12 February 2013. The purpose of setting aside order 4(a) is to enable the plaintiff to proceed with its application to amend its statement of claim in accordance with the PASSOC. As I have found that the plaintiff should not be given leave to amend its statement of claim in accordance with the PASSOC in any event, there is no purpose served in setting aside order 4(a) of the orders made on 12 February 2013. The remaining order ‑ 4(b) ‑ is an order that the plaintiff pay the defendants' costs of the application to amend its statement of claim on an indemnity basis. No, or no adequate reason, has been advanced for setting aside that order.
Conclusion
Each of the plaintiff's applications listed in its list of outstanding applications filed on 4 July 2013 is dismissed.
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