Vancleve Pty Ltd v Dorotea Pty Ltd

[1986] FCA 542

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY	QLD. G97 of 1984
GENERAL DIVISION

BETWEEN:

VANCLEVE FTY. LTD. (as	Trustee for the
VANCLEVE UNIT TRUST)

Applxant

AND:

DOROTEA PTY.LTD.

Respondent

AND :

DOROTEA PTY. LTD.

Cross Claimant

AND:

VANCLEVE PTY. LTD. (as Trustee for the

VANCLEVE UNIT TRUST)

Cross Respondent

SPENDER J.

BRISBANE

19 NOVEMBER, 1986.

%~ >. -

EXTEMPORE REASONS FOR JUDGMENT

This is an application t o amend the defence and

cross-claim in proceedings involving representations under the

Trade Practices Act 1974. It is necessary to set out some f the

history of the matter.

The applicant commenced proceedings in the Supreme Court

of Queensland by writ number 5160 of 1982 issued on 15 October

1982; on 12 September 1984 the applicant filed the application

which commenced these proceedings, and on that day	a statement of
claim was filed.

It appears from that statement of claim in the Federal

Court proceedings that the applicant alleged that, prior to the signing of contracts for the purchase of home units, there were

representations made by the respondent to the applicant,	whlch
representations constituted false and misleading conduct and which induced the appllcant to purchase th home units.

The statement of claim further pleads that In the

premises It was entitled to rescind the contracts, which It

claimed lawfully to have done by notices of rescisslon of 7

September 1982. The applicatlon sought a declaration that the

three contracts "were rescinded or made void by the appllcant on

or about 7 September 1982", and sought repayment of deposit

moneys or, alternatively, damages pursuant to the Trade Practlces

Act 1974, or further or other relief pursuant to 5.87 of the

Trade Practices Act 1974.

On 2 October 1984, the respondent filed a notice of

motion in this Court seeking that the action be struck out or,

alternatively, stayed pending the disposal of the Supreme Court

proceedings or, alternatively, that the action be stayed pending

the applicant giving an undertaking to discontinue those

proceedings and to pay the respondent's costs.

On 19 October 1984 the Court made various orders. It necessary to set out those orders: is

"The Court orders that:-

On the Applicant, through its Counsel, undertaklng to

discontinue its Supreme Court proceedings and to abide

by any order that the Supreme Court makes in relation

to costs of those proceedings:

1. The Respondent shall file and serve its Defence

and Counterclaim (if any) on or before	2	November,
1984.

2. The Applicant shall file and serve its Reply (if

any) and Defence to any Counterclaim on or before	23
November, 1984.

3 . Each party shall give mutual dlscovery of

documents on or before 14 December, 1984 and that

inspection take place on or before 25 January, 1985.

4. Each party shall have liberty to adminlster

Interrogatories for the interrogation of the other

party on or before 1 February, 1985, and that the

answers to such Interrogatories be filed and served on

or before 15 February, 1985.

5. On or before 4pm on 22 February the solicitor for

each party certify by letter to the Registrar	of the
Court that all interlocutory steps required by the

above orders have been completed and that he matter is

otherwise in all respects ready for trial; that Counsel

who are to conduct the trial for such party have read

the pleadings and are satisfied that they are in final

form and are satisfied with the pleadings of each other

party; that advices on evidence have been obtained from

Counsel and complied with and that all necessary

witnesses are available enclosing with such certificate

their respective estimates as to how long the trial of

the matter will take and specifying any dates which

will be suitable.

6 . The Respondent shall pay the costs of the

proceedings of 3 October, 1984 to be taxed.

7. The costs of today's proceedings are reserved.

The effect of those directions and orders was that the matter

ought to have been ready for trial in February of 1985.

'.

What in fact occurred was an amended statement of claim

was filed on 17 October 1984, a defence and cross-claim was filed on 9 November 1984, an amended defence and cross-claim was flled on 13 November 1985, and the applicant, by notice of motion flled

on 28 October 1986, sought further to amend that defence and

cross-claim by, in essence, pleading that the limitation

provisions apply tohese proceedings. Essentially, the

assertion is that any relief under s.82(1), or under s.87(1), or

87(1A) of the Trade Practices Act 1974, accrued more than three years prior to the date of commencing of this action. That plea was open to the respondent to plead in the defence which was

filed in this Court on 9 November 1984; that is to say, what the

respondent seeks to plead by amendment was available to it when

the defence was first filed In these proceedings.

The Supreme Court proceedlngs were discontlnued on 17

December 1984 and, pursuant to the order of Master Weld in that

regard, an order was made that the applicant pay the respondent's

costs from 27 December 1983, as taxed. Those costs have been

taxed and paid by the applicant.

So far as the Federal Court proceedings are concerned,

it is fair to say that there has been a quite cavalier disregard

of the directions which were given on 19 October 1984. In an

affidavit sworn on behalf of the respondent it is said that

interlocutory steps have not been finalized; that interrogatories

were in fact delivered on 29 August 1986 for the examination of

the respondent, which have not been answered, and that there is a

present uncertainty as to whether full discovery has been made.

In Pamela Carlotta Bvers & Ors. v. Dorotea Ptv. Ltd. €i

Ors. (unreported. 8 October 1986), a similar problem was

considered by Hr. Justice Pincus and, in the circumstances that

obtained in that case, which are not the same as here, Pincus J.

declined to grant the application for leave to amend to raise the

limitation defence. That application to amend was made the very

eve of the hearing of the trial of that action, and the order

that was made by the Federal Court concerning the discontinuance

of Supreme Court proceedings was made by consent. It was made by

consent on 11 February 1985 - that is to say, after the order

that I have made in October 1984 in this present matter.

In that case, his Honour concluded:-

"The matter seems to me to be qulte finely

balanced, and I have no confidence as to what is

the appropriate way in which to exercise my

discretion. 'I

I might say that that attitude fairly reflects my present state

of mind but, if it were possible,	the present matter is even more
finely poised.

Counsel for the applicant on the motion says that there

is no reason why the amendment should not be permitted because

costs are sufficient to cure any possible prejudice that may be

occasioned by the late amendment. Were it not for the

circumstance of the Supreme Court proceedings, and the manner in

which the matter was dealt with very early in its life in the

Federal Court, there would be much to be said for the view that

the amendment should be allowed, notwithstanding	the	very late
stage at which it is brought.

I accept that the amendment sought, being one relying on the limitation period, does not fall to be considered	on a
different basis from any other amendment.

In this particular case, the question of limitation was

said not to be adverted to by the respondent at any time up until

the recent past. In all probability, this point would not have

arisen if the trial had occurred in 1985. Had it been referred

to in late 1984 and, indeed, if it had been pleaded when the

defence was delivered in November 1984, what the applicant would

then have done is a matter of some speculation.

I am satisfied that, by not having had the opportunity to consider what ought properly to be done in the light of that

pleading at that time, it has suffered, or may very well have

suffered prejudice that cannot be compensated by costs. If the

applicant is to recommence in the Supreme Court, I am not

satisfied that there would not be some delay between now and a

time the matters in the Supreme Court are heard. At least five

years extra delay to the applicant will have been occasioned if

it chooses to re-commence in the Supreme Court. That length of

time, in my opinion, is preqnant with prejudice, although many of

the difficulties are imponderable.

As I have frankly confessed, how properly the discretion

should be exercised in the peculiar circumstances of this case

. ,

' I 7.

has very much troubled me, but I think on balance, in the liqht

of the history of the matter, particularly what occurred in late

1984, I ought not to allow the amendment. and for those reasons

the motion is dismissed.

I cortlfy that th,; T . 3 6 I: ::-::

Pages are a truc CCDY o? :::S r c x z n s i o r

Judgment herein of His Honour

Mr. Justice Spender

Dated 14 / 1 I