Sturesteps v Khoury (No 3)

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.