Sagacious Procurement Ltd v Mayne Group Ltd

[2005] NSWSC 1238

CITATION:	Sagacious Procurement Ltd v Mayne Group Ltd [2005] NSWSC 1238
HEARING DATE(S):	25/11/05
JUDGMENT DATE :	28 November 2005
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	White J
DECISION:	See paragraph 44 of judgment.

CATCHWORDS:	PRACTICE AND PROCEDURE – Application to amend pleadings – Date from which amendment is to take effect – Whether defendant deprived of a limitations defence – Whether amendment arises from some facts or it is otherwise just to grant leave under s 64 of the Civil Procedure Act.
LEGISLATION CITED:	Trade Practices Act 1974 (Cth) Civil Procedure Act 2005 (NSW) Supreme Court Rules 1970 (NSW) Uniform Civil Procedures Rules 2005 (NSW)
CASES CITED:	Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 Rodgers v Commissioner of Taxation (1998) 88 FCR 61 Brickfield Properties Ltd v Newton (1971) 3 All ER 328 McGee v Yeomans (1977) 1 NSWLR 273 New Cap Reinsurance Corp v Reaseguros Alianza SA (2004) 186 FLR 175 Ingot Capital Investments Pty Ltd v Macquarie Equity Market Limited (No.3) [2005] NSWSC 255
PARTIES:	Sagacious Procurement Ltd v Mayne Group Ltd
FILE NUMBER(S):	SC 50158/02
COUNSEL:	Plaintiff: M Elliot Defendant: D Pritchard
SOLICITORS:	Plaintiff: Sagacious Legal Pty Ltd Defendant: Freehills

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

WHITE J

Monday, 28 November 2005

50158/02 Sagacious Procurement Ltd v Mayne Group Ltd

JUDGMENT

1 HIS HONOUR: This matter was before me late in the afternoon of Friday, 25 November 2005 for the purpose of deciding what orders should be made, principally in relation to the terms upon which the plaintiff should be given leave to file an Amended Summons.

2 The defendant did not oppose the plaintiff having leave to file an Amended Summons. But it contended that an order should be made that the amendments should have effect from the date upon which the Amended Summons was filed.

3 Alternatively, it was submitted that the question as to the date from which the amendments were to take effect should be referred to the trial judge.

4 The Summons was filed on 20 September 2002. In it, the plaintiff claims damages for breach of contract, and for misrepresentations allegedly made between November 1999 and 24 January 2000. It alleges that these misrepresentations induced it to enter into a Heads of Agreement with the defendant on 24 January 2000, and consequently to execute a contract called a "Strategic Alliance Agreement" on 2 July 2000 with the defendant.

5 In its Amended Summons, the plaintiff pleads different representations. It alleges these were made to it in November and December 1999. These representations are alleged to be misleading and deceptive, or likely to mislead and deceive, and to have been made in trade or commerce.

6 The plaintiff alleges that in reliance upon the representations, it entered into the Heads of Agreement on 24 January 2000, and later into the Strategic Alliance Agreement.

7 It claims it suffered damage in that had it not been misled it would, it says, have negotiated different and more favourable terms of the Strategic Alliance Agreement. Alternatively, it claims that the losses it allegedly suffered after entering into the Strategic Alliance Agreement were loss or damage suffered by the defendant's alleged contravention of s 52 of the Trade Practices Act.

8 The claim, as pleaded, raises no issue about the limitation period having expired prior to the amendment being made. It is common ground that the limitation period is six years. See Trade Practices Act s 82(2).

9 The damage the plaintiff pleads it suffered by the alleged misleading and deceptive conduct could not, it appears to me, have occurred prior to its entering into the Strategic Alliance Agreement in July 2000.

10 Hence, the limitation period would not expire until July next year.

11 The defendant submits that it may wish to plead that the plaintiff suffered damage more than six years ago by losing the opportunity to make a different agreement which would have been more profitable, or less unprofitable, than the agreement it entered into with the defendant.

12 No particulars were given of the contention the defendant may seek to advance. In the course of argument the defendant did not attempt to identify what opportunity may have been available to the plaintiff, or how the misrepresentation alleged to have been made in November 1999 may have caused the plaintiff to lose such an opportunity.

13 The hypothetical alternative case the defendant wishes to have the opportunity to propound would be that the plaintiff suffered economic loss of a different kind to that which the plaintiff alleges it did suffer, and that such loss was caused by part of the misleading conduct on which the plaintiff relies.

14 I do not accept that such a case, if established, would be an answer to the plaintiff's claim for damages for breach of s 52. Subsection 82(1) of the Trade Practices Act provides:

“82. Actions for damages
(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.”

15 Subsection 82(2) provides:

“ (2) An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.”

16 The cause of action that relates to the conduct done in contravention of s 52, is a cause of action to recover the amount of the loss or damage which the plaintiff suffered by the impugned conduct. The kind of loss or damage suffered is an integral component of the cause of action. Likewise, the alleged cause of action has, as a component, the whole of the conduct alleged to be misleading and deceptive, or likely to mislead or deceive.

17 If the proceedings on the alleged cause of action were commenced today, it would be no answer for the defendant to say that the plaintiff suffered damage of a different kind than that which it alleges, from part of the conduct which it alleges the defendant engaged in more than six years before the action was commenced.

18 The fact that one hypothetical cause of action, which is not pleaded, but which if pleaded might be statute barred - that is, a cause of action to recover an amount of economic loss from a misrepresentation made in November 1999 which caused the plaintiff to forego other opportunities – is, in my view, irrelevant to whether the cause of action pleaded, being based on representations made in November and December 1999 causing a different kind of economic loss, is statute barred.

19 In each case it is necessary to identify the precise economic interest of the plaintiff which had been infringed. See Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 at 17.

20 Further, I find it impossible to see how it could be said that the plaintiff had suffered actual loss in November 1999 by having lost an alternative opportunity by that date, unless it were postulated that an opportunity available in November had ceased to be available before 25 November or 28 November, 1999, as distinct from ceasing to be available in December 1999 or before 24 January 2000, or July 2000.

21 In the absence of particularity about the allegation of a lost opportunity, it seems to me that the defendant's position is speculative at best. I do not think that the parties' preparation for hearing should be distracted by leaving such a hypothetical issue potentially available to be resolved at the trial.

22 In my view, it is necessary in the interests of a quick, just and cheap resolution of the real issues in the proceeding that the question of the date from which the amendments to the Amended Summons should take effect be determined now, and not left for trial.

23 For the reasons I have given, I do not consider that any occasion arises under s 65(3) of the Civil Procedure Act 2005 to make an order that the amendments are to take effect otherwise than as from the date on which the proceedings were commenced.

24 Moreover, even if, contrary to my finding, the new cause of action were statute barred if the proceedings were commenced today, it seems to me that the cause of action alleged in the Amended Summons which is new, arises from the same facts as the causes of action for misrepresentation pleaded in the original Summons. The matter is one of degree and impression. However, both causes of action in relation to misrepresentation arise from the same negotiations allegedly leading to entry into the same contracts. The same facts would have to be conned over in order to ascertain liability. See by analogy Rodgers v Commissioner of Taxation (1998) 88 FCR 61 at 69 and Brickfield Properties Ltd v Newton (1971) 3 All ER 328.

25 Further, the power to grant leave to amend under s 64 is not constrained by the terms of s 65(2). See s 65(4). In my view, the decision of the Court of Appeal in McGee v Yeomans (1977) 1 NSWLR 273 is applicable to applications under s 64 and s 65 of the Civil Procedure Act 2005 to amend a statute barred cause of action.

26 Such an amendment, in my view, may be made under s 64 even if the application does not fall within s 65(2)(c). (See in this respect in relation to the former Supreme Court Rules,New Cap Reinsurance Corp v Reaseguros Alianza SA (2004) 186 FLR 175 and Ingot Capital Investments Pty Ltd v Macquarie Equity Market Limited (No.3) [2005] NSWSC 255). Sections 64 and 65 of the Civil Procedure Act are in materially the same terms as Pt 20 r 1 and r 4 of the former Supreme Court Rules.

27 Had it been necessary to decide the question, I would in any event have granted leave to amend, under either s 64, or s 65(2)(c), and declined to make a contrary order under s 65(3).

28 Accordingly, I decline to make the order in paragraph 3 of the defendant's proposed Short Minutes of Order.

29 The next matter argued was the question of costs. In my view it is appropriate to make an order that the plaintiff pay the defendant's costs thrown away by reason of the amendment to the summons.

30 The plaintiff seeks an order that those costs not be assessed and paid until the determination of the proceedings.

31 The former rule in Pt 52 A r 9 of the Supreme Court Rules provided that where before the conclusion of any proceeding the Court made an order for the payment of costs, or a motion was refused with costs, the costs should not, unless the Court otherwise ordered, be payable until the conclusion of the proceedings. However, that rule was subject to an express exception in relation to proceedings commenced in the Commercial List, or the Technology and Construction List.

32 My attention has not been drawn to an equivalent rule in the Uniform Civil Procedures Rules. Pt 42 r 42.7 deals with the costs of interlocutory applications and contains no equivalent exception in relation to proceedings in the Commercial List or the Technology and Construction List.

33 However, the Court undoubtedly has power to make appropriate orders for costs, and in the usual course in the Commercial List, or the Technology and Construction List, would allow a party entitled to a costs order to have its costs assessed forthwith, and make them payable forthwith.

34 In the present case, however, I accept that it is unlikely a costs assessor would be able to accurately identify what costs have been thrown away by the amendment to the summons before the conclusion of the hearing, or at least until all of the interlocutory steps have been completed.

35 It may be that on further evidence the defendant would be able to satisfy the Court that it would be a fruitful exercise to have the costs thrown away by the amendment to the summons assessed forthwith. If, on evidence, the defendant wished to pursue that course it should have the opportunity to do so.

36 Accordingly, I will make an order in accordance with paragraph 3 of the plaintiff's proposed Short Minutes of Order but adding the words, "or until further order" at the conclusion of that paragraph.

37 The next question argued related to the security for costs. The defendant submitted that an order should be made that payment of the costs ordered to be paid should be paid by the plaintiff directly, and not be withdrawn from the security for the defendant's costs which has already been provided by the plaintiff.

38 In effect, that order, if made, would add to the security which the defendant presently has for its costs of the proceedings.

39 It is not possible to say, on the material before me, whether the costs which the plaintiff will have to pay, being those thrown away by the amendment, are likely to exceed the reduction in the costs arising from the amendments. It does seem that the effect of the amendments is to substantially narrow the issues for trial. It may be, as the plaintiff contends, that the overall cost burden of the trial to the defendant is reduced by the amendments.

40 As it is not possible to form a view about those matters, and as the substance of the application was for an increase in the amount of security, I decline to makes the orders proposed by the defendant. In that regard, if the burden of costs which the defendant faces has been increased as a result of the amendments, then it is open to the defendant, on appropriate notice, to apply for further security.

41 I am expressing no view about the merits of such an application but I decline to make the orders sought by the defendant in that respect.

42 The next question was the time by which the plaintiff should file and serve its remaining evidence. I will extend the time to 4.00 pm on this Friday. The plaintiff did not oppose the order sought by the defendant that if there is default in that order the plaintiff will not be entitled to rely upon any further lay affidavits or experts’ reports without leave of the Court.

43 Finally, it appears to me that the plaintiff had substantial success on the application which I heard on Friday, and that the costs of that day should be the plaintiff's costs in the proceedings.

44 For those reasons I make the following orders - I will deal with the plaintiff's version of the orders - I make orders in accordance with the Short Minutes of Order handed up by counsel for the plaintiff which I initial and date today and place with the papers subject to the following amendments:

45 In paragraph 3 I add the words "or until further order" at the end of the paragraph.

46 In paragraph 5 I amend the date "30 November" to "2 December".

47 I add the words "failing which the plaintiff shall not be entitled to rely on any further lay affidavits or any experts’ reports without leave of the Court to do so".

48 I add a new order 10: "That the costs of the hearing before me on 25 November 2005 be the plaintiff's costs in the proceedings".

******