Xianzhu v Chen

[2020] VSC 264

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2018 02923

SHI XIANZHU	Appellant
v
SHUANGHAO CHEN	Respondent

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	12 May 2020
DATE OF RULING:	12 May 2020 (given ex tempore, revised)
CASE MAY BE CITED AS:	Xianzhu v Chen
MEDIUM NEUTRAL CITATION:	[2020] VSC 264

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PRACTICE AND PROCEDURE – Application to amend notice of appeal – Legal practitioner error – Leave granted in the interests of justice – Costs thrown away – Supreme Court (General Civil Procedure) Rules 2015 r 58.01 – Billington v Sussan Corporation Australia Pty Ltd [2020] VSCA 12.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M McKenzie	McDonald Lawyers
For the Respondent	Mr M Seelig	Destra Law

TABLE OF CONTENTS

Appellant’s submissions.................................................................................................................. 1

Respondent’s submissions............................................................................................................... 1

Applicable Principles........................................................................................................................ 2

Analysis................................................................................................................................................ 4

Costs...................................................................................................................................................... 5

HER HONOUR:

1. The respondent took a painting to the appellant for framing and never got it back.  He obtained orders in the Magistrates’ Court that the appellant pay him damages.  Those orders are the subject of this appeal proceeding.  This ruling concerns a late application for amendment.  The trial of this proceeding is listed in less than three days’ time.  At a directions hearing listed this day, the appellant, who is legally represented, seeks to amend his notice of appeal.  The application for leave to amend is opposed.

1. The amendment to the notice of appeal seeks to add the ground that “the Magistrate ought not to have admitted the evidence of the alleged expert opinion by witness Guan for the reasons set out in the submissions already served”.  The Magistrate relied upon evidence given by Mr Luke Guan of Mossgreen Auction House to make a finding as to the valuation of the painting.  This informed the quantum of damages that the Magistrate ordered the appellant pay the respondent.

Appellant’s submissions

1. As counsel was reviewing the documents for trial, he realised the notice of appeal omitted reference to the ground of appeal concerning Mr Guan.  The issue of Mr Guan’s evidence was addressed in the appellant’s written submissions dated 25 September 2019 and reply submissions dated 24 April 2020.  The appellant’s submissions stated that the primary issue in the Magistrates’ Court was the quantum of loss, measured by reference to the value of the lost painting.

Respondent’s submissions

1. The appellant has offered little or no explanation for the late amendment, and gave the respondent only a few hours’ notice of it. It is made less than three days’ before trial. The respondent’s written submissions do not deal with the proposed ground of appeal, as the appellant’s submissions in reply concede. The respondent’s written submissions address the matters in the notice of appeal. Rule 58.01 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’) requires the notice of appeal concisely state the grounds of appeal. The appellant refers to the obligations for timeliness in the Civil Procedure Act 2010 (‘the CPA’), including s 25, and relies upon the High Court authority Aon[1] and the Court of Appeal authority Yara Australia Pty Ltd v Oswal.[2]

   [1](2009) 239 CLR 175.

   [2](2013) 41 VR 302.

Applicable Principles

1. Rule 36.01(1) of the Rules permits amendment to be made to a document at any time in the proceeding for the purpose of determining the real controversy in dispute between parties, correcting any defect or error or avoiding multiplicity of proceedings.

1. Rule 58.08(1) of the Rules requires that a notice of appeal state the question of law upon which the appeal is brought and concisely state the grounds of appeal. Rule 58.08(3) gives the Court power to amend the grounds of appeal or make any other order to ensure the proper determination of the appeal.

1. The CPA sets out overarching obligations that are applicable. Section 7 states that the overarching purpose of the Act is to facilitate the “just, efficient, timely and cost-effective resolution of the real issues in dispute”. Section 25 requires parties and legal practitioners to use reasonable endeavours to act promptly and minimise delay.

1. In Billington v Sussan Corporation Australia Pty Ltd,[3] the Court of Appeal declined an application for leave to appeal from a decision to dismiss an application for a late amendment.  The Court of Appeal held:

   [3][2020] VSCA 12 [25]–[26] (citations omitted).

In determining the application by the applicant for leave to amend the statement of claim, the judge was required to take into account the objects specified by s 9(1) of the Civil Procedure Act.  Further, in Aon Risk Services Australia Pty Ltd v Australian National University,  the High Court considered the principles that are relevant to an application for leave to amend a pleading.  In that case, the Court made it clear that, in determining such an application, among other matters, a court is required to take into account principles of proper case management, where there has been substantial delay and wasted costs pertaining to the application.  In particular, Gummow, Hayne, Crennan, Kiefel and Bell JJ stated:

An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation.  There is no such entitlement.  All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases.  On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants.  Such statements should not be applied in the future.

A party has the right to bring proceedings.  Parties have choices as to what claims are to be made and how they are to be framed.  But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required.  Those times are long gone.  The allocation of power, between litigants and the courts arises from tradition and from principle and policy.  It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

In Northern Health, Kyrou and McLeish JJA, in their joint judgment, stated the applicable principles in the following terms:

The principles pertaining to an application to amend a pleading were explained in Aon Risk Services Australia Ltd v Australian National University.  As set out in the reasons of J Forrest J in Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyd's, London, the factors that the High Court in Aon considered as relevant to an application to amend a pleading include:

(a)whether there will be a substantial delay caused by the amendment;

(b)the extent of any wasted costs;

(c)whether there is an irreparable element of unfair prejudice caused by the amendment;

(d)concerns of case management arising from the stage in the proceeding when the amendment is sought;

(e)whether the grant of the amendment will lessen public confidence in the judicial system; and

(f)whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.

1. Those principles are applicable to a notice of appeal.

Analysis

1. The question of law in the notice of appeal has, and remains, whether the Magistrate failed to take into account a relevant consideration in making the orders.  The real issue in dispute is quantum, namely the amount that the Magistrates’ Court ordered the appellant pay the respondent.  This issue is evident in the submissions of both parties.

1. Part D of the appellant’s written submissions dated 25 September 2019 dealt extensively with the admissibility of Mr Guan’s evidence.  His reply submissions note that the respondent has not dealt with the issue.  The respondent’s submissions state that they are responsive to the notice of appeal.

1. I find that the amendment is for the purpose of determining a real controversy between the parties.  It relates directly to the issue of quantum, and is a major issue in the appellant’s submissions.

1. The question is whether leave to amend should be given in light of the CPA.

1. The lateness of the appellant’s amendment application is inconsistent with the overarching purpose of the CPA, so too is the manner in which the application is made. The appellant did not bring the application to amend by summons or with sufficient notice to the respondent. There is no affidavit in support of the application for amendment. The proceeding was initiated in December 2018. There is no evidence to explain the delay in making the amendment application.

1. Turning now to the principles identified above in Northern Health v Kuipers[4] and their application here:

   [4][2015] VSCA 172.

(a)   the amendment should not occasion substantial delay.  This is not the primary trial but rather an appeal.  Some further time will be required to enable the respondent to address the submissions;

(b)  given the above, the wasted costs will be the costs thrown away by reason of having to vacate the trial;

(c)   there is no irreparable element of unfair prejudice caused by the amendment;

(d)  as to case management, the trial may be vacated, however it can be relisted in the next few weeks given its short duration (one day) and nature;

(e)   the granting of amendment will not lessen the public confidence in the judicial system and is necessary to enable the Court to determine the real issues in dispute;

(f)    no satisfactory explanation has been given on oath for the amendment.  Counsel’s oral submissions indicate it was an oversight by legal practitioners.

1. Balancing the factors above, it is in the interests of justice to allow the amendment and leave will be given to file an amended notice of appeal.

Costs

1. I will order that the appellant pay the costs of this day. I will also order the appellant pay the respondent’s costs thrown away for the vacation of the trial date. I do so on the basis that the appellant has acted inconsistently with the CPA, as outlined above.