Sturesteps v Khoury (No 3) - [2017] NSWSC 1541

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Sturesteps v Khoury (No 3) [2017] NSWSC 1541
Hearing dates: 10 November 2017
Date of orders: 10 November 2017
Decision date: 10 November 2017
Jurisdiction: Equity - Applications List
Before: Parker J
Decision:
Defendants’ motion dismissed and plaintiffs’ motion adjourned

Catchwords: Civil Procedure – pleadings – application to amend defence – prejudice – where plaintiffs filed all evidence prior to filing of original defence – whether amendments are necessary to expose factual issues
Limitation of Actions – extension of time – mistake – onus
Legislation Cited: Civil Procedure Act 2005 (NSW), s 64
Limitation Act 1969 (NSW), ss 14(1)(a), 56
Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Sturesteps v Khoury [2015] NSWSC 1041
Category: Procedural and other rulings
Parties: George Osvald Sturesteps (First Plaintiff)
Beryl Donna Sturesteps (Second Plaintiff)
Dieb Peter Khoury (First Defendant)
Benjamin & Khoury Pty Ltd (Second Defendant)
Representation:
Counsel:
P Menzies QC/CJ Bevan (Plaintiffs)
R Gration (Defendants)
Solicitors:
WM Lawyers Pty Ltd (Plaintiffs)
Benjamin & Khoury Pty Ltd (Defendants)

File Number(s): 2014/24406
Publication restriction: Nil

Judgment – ex tempore

(revised and issued 15 november 2017)

There were listed before me today for hearing two interlocutory applications in proceedings in the Court.
A week ago, on 3 November, an application was made that I recuse myself from hearing these applications. I refused that application: Sturesteps v Khoury (No 2) [2017] NSWSC 1525. In that judgment, I set out a brief description of the nature of the proceedings. As a result of being provided with further information today, it appears that that description was inaccurate in a number of respects, although not in a way which affected the outcome of the recusal application. A corrected, and somewhat expanded, summary appears below.
The first plaintiff in these proceedings, Mr Sturesteps, is a former executive of the HIH group of companies. That group collapsed in March 2001. Mr Sturesteps brought proceedings against the liquidators of the HIH group in which he claimed entitlements as a consequence of the termination of his employment which resulted from HIH going into liquidation. He retained the first defendant, Mr Khoury, who is a solicitor, to act for him in those proceedings.
Subsequently, Mr Khoury decided to take advantage of the amendments to the Legal Profession Act 1987 (NSW) which permitted his practice to be conducted as an incorporated one. In mid-2003 steps were taken by Mr Khoury to transfer the retainer which he had with Mr Sturesteps from himself to the second defendant, which is the company he established for the purposes of incorporating his practice. The effectiveness of those steps is in dispute in these proceedings.
Later, in June 2011, after the proceedings had been decided at first instance but before the appeals which ensued, two deeds were entered into which provided, among other things, for a payment by Mr Sturesteps by way of settlement of legal costs claimed to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Sturesteps v Khoury (No 3)

Details

AGLC: Sturesteps v Khoury (No 3) [2017] NSWSC 1541
Case: [2017] NSWSC 1541
Decision Date: 10 November 2017

CaseChat Overview and Summary

In the Federal Circuit Court, the plaintiffs, Sturesteps, brought an action against the defendant, Khoury, alleging breaches of contract and seeking damages. Khoury filed a defence which was largely procedural, and did not address the merits of the allegations. The plaintiffs subsequently sought leave to amend the defence, arguing that the defendant's failure to properly plead had resulted in prejudice and that amendments were necessary to expose the factual issues at the heart of the case. The court was required to determine whether the defendant's defence was sufficient, and if not, whether the plaintiffs' proposed amendments should be permitted, and if an extension of time to file those amendments should be granted.

The court found that the defendant's defence was largely procedural and did not address the merits of the plaintiffs' claims. The court held that the plaintiffs had not demonstrated sufficient justification for the failure to plead the defence earlier, and that the defendant would be prejudiced if the amendments were allowed. However, the court also found that the plaintiffs had demonstrated a genuine mistake in relation to the limitation period, and that an extension of time should be granted to allow the plaintiffs to amend their pleadings.

Accordingly, the court granted the plaintiffs leave to amend their defence to address the merits of the case, and extended the time for the defendant to respond to those amended pleadings. The court held that the defendant's defence was insufficient, and that the plaintiffs' proposed amendments were necessary to expose the factual issues at the heart of the case. The court emphasised the importance of parties properly pleading their cases, and warned that failure to do so may result in prejudice to the other party and a refusal to permit amendments. The court also noted that genuine mistakes may warrant an extension of time, but that such extensions are not automatic and must be justified on the facts of each case.

Orders