Sistrom v Rangott

The Court of Appeal of the Australian Capital Territory heard an appeal concerning a dispute arising from a deed executed between the plaintiff, Rosina Gayle Sistrom as Executor of the Will of the late David William Sistrom, and the defendants. The original action, commenced in 1993, concerned an alleged outstanding amount due under a deed dated 28 October 1992, which related to the plaintiff's resignation from a partnership. The defendants sought to amend their defences and counterclaims to introduce new allegations of misconduct by the plaintiff, including breaches of partnership duties, maladministration of insolvent estates, and fraudulent misappropriation of funds.

The primary legal issues before the Court of Appeal were whether the primary judge erred in granting leave to amend the defendants' defences and counterclaims, particularly in relation to causes of action that may have been statute-barred. Specifically, the court had to consider the application of section 51 of the *Limitation Act 1985* (ACT) and Order 32 Rule 1 of the *Supreme Court Rules* (ACT), which govern the amendment of pleadings to include new causes of action that arise out of the "same or substantially the same facts" as existing claims. The court also had to determine whether the proposed amendments to the counterclaims should have been permitted.

The Court of Appeal allowed the appeal in part. It reasoned that while the primary judge had correctly identified the need for the proposed new causes of action to arise from substantially the same facts as the existing defence, the judge had erred in refusing leave to amend the defences entirely. The Court found that the proposed amendments to the defences, which introduced allegations of fraudulent misappropriation and misrepresentation, did arise from substantially the same factual matrix as the original defence concerning maladministration and breach of duty. However, the Court upheld the primary judge's refusal to grant leave to amend the counterclaims, implicitly finding that these did not meet the necessary criteria.

Consequently, the Court of Appeal set aside the primary judge's order and granted leave to amend the defences to include all new matters except those relating to the *Trade Practices Act 1974* (Cth). Leave to amend the counterclaims was refused. The costs of the appeal were ordered to be each party's costs in the cause.