Aon Risk Services Australia Ltd v Australian National University

EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 2] [2011] WASC 8

Essex Securities Pty Ltd v Lunt [2006] WASC 58

Hutton v Meston [2004] WASCA 178

Jeans v Commonwealth Bank of Australia [2003] FCAFC 309

Jeans v Commonwealth Bank of Australia [2004] HCA Trans 548

Napier v Public Trustee (WA) (1980) 32 ALR 153

Sangora Holdings Pty Ltd v Dunstan (Unreported, WASC, Library No 990172, 13 April 1999)

Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd (No 4) [2009] FMCA 291

Warren v Lawton [2014] WASC 59

Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212

1. The defendants seek leave to amend their substituted defence and counterclaim filed on 4 April 2018, in terms of a minute of proposed amended substituted defence and amended counterclaim filed on 10 August 2018. If permitted, the effect of the amendment would be to allow the defendants to withdraw four previously made admissions.
2. The paragraphs of the substituted defence and counterclaim which contain admissions now sought to be withdrawn by amendment are pars 9.3, 9.7, 12 and 13. Only the amendments to pars 9.3, 9.7 and 12 are opposed by the plaintiff.
3. The significance of the opposed amendments is conveniently described in the plaintiff's responsive submissions to the defendants' application to amend,[1] from which the following paragraphs are largely drawn.
4. The plaintiff is Mr Bernard Lamers as trustee for The Ben and Debra Lamers Family Trust, one of the two unit holders of the Arvind Property Trust. In these reasons, I will refer to that trust as the Arvind Property (Unit) Trust. Bright Image Dental Pty Ltd as trustee for the V & H Carbone Family Trust, is the second unit holder. Arvind Pty Ltd is the trustee of the Arvind Property (Unit) Trust, and Mr Saro Carbone is a director of Arvind Pty Ltd.
5. On the current pleadings, it is the plaintiff's case that the Arvind Property (Unit) Trust was formed as a result of an oral agreement between Mr Lamers, in his personal capacity, and Mr Carbone, to acquire and develop the land at 404 Ranford Road, Canning Vale (Property). Before the amendments were proposed on behalf of the defendants, it was not disputed that the Property was held by Arvind Pty Ltd as trustee for the Arvind Property (Unit) Trust.
6. By these proceedings, the plaintiff seeks to remove Arvind Pty Ltd as trustee of the Arvind Property (Unit) Trust. The plaintiff also seeks equitable compensation for alleged breaches of duties and obligations by Arvind Pty Ltd as trustee of the Arvind Property (Unit) Trust.
7. The defendants now seek to amend their pleading by which certain admissions are withdrawn, including the admission that the Property is owned by Arvind Pty Ltd as trustee of the Arvind Property (Unit) Trust. By the proposed amendments, the defendants would also assert that the Property is the primary asset of the Arvind Property (Discretionary) Trust.
8. In support of the application, the defendants rely upon the affidavit of Mr Arthur Metaxas, the defendants' solicitors, filed on 10 August 2018, together with the written outline of submissions, filed on 23 August 2018.

1. At the hearing of the defendants' application, the court was informed that the proposed amendment to par 13, which concerns the execution of the Arvind Property (Unit) Trust, was not opposed, nor was the proposed withdrawal by the defendants of their counterclaim.
2. The plaintiff opposes the withdrawal of the other admissions on two grounds.[2] The first is that the withdrawal is inconsistent with:

(a) the conduct of the defendants (and the plaintiff) over the past 9 years;
>
> (b) the position taken by the defendants since the proceeding was commenced 13 months ago; and
>
> (c) sworn evidence given by and on behalf of the defendants.

3. The second is that the defendants have done nothing to justify or explain the reason for withdrawal of the admissions. The plaintiff says that this is fatal to the defendants' application, as the defendants have failed to establish good cause for withdrawal.
4. In opposing the application, the plaintiff relies on his affidavit; the affidavit of Ms Ann Louise Spencer, a solicitor acting on behalf of the plaintiff; and a written outline of submissions, all filed on 7 September 2018.

1. At any stage of a proceeding, the court may allow any party to amend that party's pleading, on any terms as to costs or otherwise that may be just and in the manner (if any) that the court may direct.[3] However, where a defendant seeks to amend their defence so as to withdraw an admission, or to resist the disallowance of such an amendment, the defendant has a heavier onus that normally falls on a party seeking to make an amendment, or resist the disallowance of an amendment.[4]
2. The Court of Appeal in Water Corporation v Cardno BSD Pty Ltd[5] found that the relevant principles to be applied upon an application to withdraw an admission in a pleading could, for the purposes of that case, be stated as follows.
   1. The court has a broad discretion to permit or refuse an amendment which has the effect of withdrawing an admission; the ultimate question must always be what is in the interests of justice in the circumstances of the case.
   2. But it is a serious matter to make an admission in a pleading and ordinarily a party should not be permitted to withdraw an admission in a pleading without good cause.
   3. In determining whether or not to permit an amendment to withdraw an admission, relevant considerations will generally include:

(a) the circumstances in which the admission was made;
>
> (b) the reason it is sought to be withdrawn;
>
> (c) the significance of the admission;
>
> (d) the time for which it has stood on the record; and
>
> (e) any prejudice that is likely to be suffered by the other side that cannot appropriately be compensated by an order for costs.

3. The extent to which certain factors weigh in the balance of an application to withdraw admissions will depend on the circumstances of the case.[6] Having regard to all of the circumstances, I find that the statement of the Court of Appeal reproduced at par 14 above is an appropriate statement of the general principles for the purposes of this case.

1. Having given careful consideration to all of the circumstances, I find that it is appropriate to allow the defendants to amend their pleading in terms of the minute filed on 10 August 2018. In coming to this conclusion, I have had regard to and weighed the following.

(a) The reason the admissions are sought to be withdrawn

1. On behalf of the defendants, it is said that the reason the admissions are sought to be withdrawn is to permit the defendants to plead the facts revealed by contemporaneous documents.[7]
2. At the request of the plaintiff, a subpoena was issued in January 2018 to James Chong Lawyers, a firm which had acted for the parties in relation to matters relevant to the proceeding.[8] Attached to Mr Metaxas' affidavit are various documents produced in response to the subpoena. Mr Metaxas says that the documents, in his opinion, demonstrate the following.[9]

19.1 a discretionary trust named 'The Arvind Property Trust' was constituted in late March 2009;

19.2 a unit trust named 'The Arvind Property Trust' was constituted after 28 July 2009;

19.3 the trust referred to in the Offer and Acceptance was the discretionary trust; and

19.4 the negotiations between the plaintiff and the second defendant about them jointly developing the Property were finalised in July 2009 after which Mr Chong was instructed to prepare a deed of settlement for a unit trust to be named 'The Arvind Property Trust' and a deed of settlement for a discretionary trust for the benefit of the plaintiff and his family.

1. Mr Metaxas further says that the matters pleaded at par 9.3 of the statement of claim were incorrectly admitted by the defendants on the basis that:

20.1 as at the date when the Offer and Acceptance and the Deed of Declaration were recorded as executed the 'Arvind Property Trust' as pleaded by the plaintiff had not been constituted; and

20.2 the Deed of Declaration referred to the discretionary trust constituted in late March 2009, that is, about a day after the Offer and Acceptance was signed and not the unit trust deed.

1. In his affidavit, Mr Metaxas also seeks to explain the withdrawal of admission to the matters pleaded at par 13 of the statement of claim.[10] However, as noted above, the defendants' proposed amendment to par 13 is not opposed.
2. As there may be a trial in which the effect of the documents may be in issue, it is not appropriate that I express any concluded views as to their operation or effect. It is sufficient for the purpose of the application to say that the documents provide a sufficient ground for seeking withdrawal of the admissions.
3. While the defendants say that the reason the admissions are sought to be withdrawn is to permit the defendants to plead the facts revealed by contemporaneous documents, the plaintiff says that there is sufficient evidence as to the conduct of the defendants in separate proceedings before this court to suggest that, rather than a desire to raise a genuine legal argument, the proposed amendment is a tactical move to put the plaintiff to further expense, and to delay and protract this proceeding.[11] The plaintiff refers to the Supreme Court proceeding described as COR 123 of 2017, which concerned an application by the first defendant to set aside a statutory demand issued on behalf of the plaintiff.
4. The plaintiff says that the effect of withdrawing the admissions allows the defendants to significantly amend the books and records for a second time. The plaintiff says that the withdrawal also allows the defendants, without explanation, to plead a case which is now contrary to affidavit evidence and fundamentally contrary to the assumptions on which the parties have conducted the proceeding since August 2017, and their financial affairs for much longer.[12]
5. While the previous conduct of parties may be a factor which is weighed when determining an application such as this,[13] there is not sufficient evidence before me to be satisfied that this is a tactical move, initiated for an ulterior purpose, to put the plaintiff to further expense, and to delay and protract these proceedings.

(b) The circumstances in which the admissions were made

1. The circumstances in which the admissions were made are described on behalf of the defendants as follows.[14]

39.1 the matters alleged relate to events from 2009 which the parties were required to recall in 2017 (so 8 years later) as regards to the timing of certain events including when the agreement was made for the development of the Property and the beneficial interests as at that date;

39.3 assimilation of all of the facts alleged and the various documents in a complex case such as this does not mean that every nuance is immediately revealed to the lawyers and these are not issues a layman would be expected to appreciate;

39.4 the JLC documents were produced in February 2019 (sic) and copied by the defendants on about 6 March 2009 (sic);

39.5 the Amended Statement of Claim was filed 2 March 2018;

39.6 the Substituted Statement of Claim was filed 7 March 2018.

1. The circumstances described at 39.1 to 39.3 above suggest that a mistake was made by the defendants in making the admissions, which mistake was identified when the documents subpoenaed from James Chong Lawyers were inspected.
2. The affidavit sworn by Mr Metaxas does not directly address the circumstances in which the admissions were made. The defendants' proposed case also contradicts the sworn evidence of Mr Carbone, without explanation proffered by him directly.
3. On 14 September 2017, Mr Carbone swore an affidavit on his own behalf (as the second defendant in the proceeding), and on behalf of the first defendant (in his capacity as director of Arvind Pty Ltd). In that affidavit, Mr Carbone admitted pars 47 and 48 of the affidavit of Mr Lamers sworn 18 August 2017, which are reproduced below.
   1. Arvind in its capacity as trustee for the APT is the sole registered proprietor of Ranford Road which is more particularly described as Lot 1008 on Deposited Plan 63005 being the whole of the land in Certificate of Title Volume 2736 Folio 964.
   2. Attached to this affidavit and marked 'BHL-21' is a true copy of the record of Certificate of Title held by Landgate for Ranford Road (Randford Road Title). I am informed by Ms Spencer and believe that this copy of the Ranford Road Title was obtained by Kott Gunning on 19 June 2017.
4. At par 4 of Mr Lamer's affidavit of 18 August 2017, 'APT' is defined as 'a unit trust of which Arvind Pty Ltd (ACN 052 292 145) (Arvind), the defendant in these proceedings, is the trustee'.
5. The plaintiff acknowledges that there is no absolute rule requiring a party seeking to withdraw an admission to give evidence of the circumstances surrounding the making of an admission and its proposed withdrawal, and that when evidence is given, it can (and has when appropriate) come from lawyers acting for the parties.[15]
6. The plaintiff however seeks to rely upon on the comments of Sackville J in Deangrove Pty Ltd v Commonwealth Bank of Australia[16] at [45], and says that in order to be permitted to resile from a position stated on oath, it is necessary for an adequate explanation to be given personally by the deponent of that evidence and where that evidence is given by multiple deponents, it may be appropriate for that explanation to be corroborated.[17]
7. In this case, the Court is, in effect, asked to take into account the circumstances described at 39.1 to 39.3 (reproduced above) and infer that a mistake was made. The failure by Mr Carbone to personally provide any explanation for the change in position weighs against leave being granted to withdraw the admissions.

1. The affidavit and written submissions filed on behalf of the defendants do not adequately explain the significance of the proposed amendments to the plaintiff's case, nor to the relief sought on behalf of the plaintiff. In the written submissions filed on behalf of the defendants, it was asserted that:[18]

the significance of the admission is that the defendants admit matters which it is strongly arguable are incorrect.

1. At the hearing of the application, counsel for the defendants explained that the amendments were sought to be pleaded[19]

to negate the proposition that the obligations said to have arisen by virtue of these documents came into being on 30 March 2009. When, we say, the unit trust had not been constituted and was not in contemplation until, at the earliest, 28 July 2009, so four months later. So that's the significance of the proposed amendment to paragraph 9.3 ‑ sorry ‑ 9.1(c), whereby we seek to withdraw the admission as regards to paragraph 9.3 of the statement of claim.

1. Counsel for the defendants also explained that, if the admissions were not withdrawn, the defendants may be curtailed in their cross‑examination of the plaintiff. In this regard, counsel explained as follows.[20]

What we seek to agitate by these amendments is: that the unit trust did not exist on 30 March 2009; the deed of declaration of trust was dated 30 March 2009 but it was prepared in February 2010; and that the plaintiff, if he wishes to rely upon the contract and the deed of declaration of trust as evidence of a trust for his benefit having come into existence on or about 30 March 2009, then we are entitled to put a contrary proposition to him, so that the questions wouldn't be met with the response from the bench, "Well, this is just an admitted fact. Why would I let you cross‑examine about an admitted fact?"

That's the point of the amendments. But what we want to say is the unit trust didn't exist as at 30 March 2009 and it didn't come into existence for months afterwards ...

1. Counsel for the defendants further explained the admissions are not so significant that, if withdrawn, there is a prospect that the plaintiff will be deprived of a beneficial interest in the Property. That is, the defendants do not contend that the Arvind Property (Unit) Trust is not the ultimate beneficial owner of the Property.[21] Instead, the defendants say that there is a resulting trust whereby Arvind Pty Ltd as trustee for the Arvind Property (Discretionary) Trust holds the property on trust for Arvind Pty Ltd as trustee of the Arvind Property (Unit) Trust.[22]

(d) The time for which the admissions have stood on the record

1. When regard is had to all of the documents filed in the proceeding, the defendants' assertion that the admissions have only stood on the record for 4 months is not a fair characterisation of the position.[23]
2. The proceeding commenced on 21 August 2017, when the writ was filed with an application for interlocutory injunction. Orders were later made, among other things, restraining Arvind Pty Ltd as trustee of the Arvind Property (Unit) Trust, and Mr Carbone, from further encumbering any trust asset.[24]
3. The allegation that the Property was owned by the Arvind Property (Unit) Trust was first made in the injunction application.[25] That allegation was not disputed by Arvind Pty Ltd nor Mr Carbone, the then first and second defendants.
4. I have considered the time for which the admissions have stood on the record and, in so doing, I have also taken into account the following chronology.
5. On 26 October 2017, an amended writ of summons was filed on behalf of the plaintiff. A statement of claim was also filed on the same date.
6. A defence was filed on behalf of the first and second defendants on 24 November 2017.
7. In the defence filed on behalf of the first and second defendants on 24 November 2017, it was admitted by them that upon its acquisition on 17 February 2010 and thereafter, the Property was, and remains, the primary asset of the Arvind Property (Unit) Trust.[26]
8. The plaintiff says that the allegations in the defence as to the constitution of the Arvind Property (Unit) Trust appeared to the plaintiff to be internally contradictory and failed to reveal when the Arvind Property (Unit) Trust was constituted.[27] The plaintiff says that he then deemed it necessary to: [28]

(a) write to, and then on 19 January 2018 issue a subpoena to, the firm who drafted the Arvind Property (Unit) Trust deed, being the defendants' former lawyers; and
>
> (b) subsequently, amend the statement of claim.

9. By agreement, on behalf of the defendants, Mr Metaxas first inspected and copied documents produced in response to the subpoena, and it appears that he did so on or about 14 February 2018.[29] The plaintiff's lawyers uplifted, reviewed and copied the documents in response to the subpoena on 26 February 2018.[30]
10. On 1 March 2018, the plaintiff was given leave to file a re‑amended writ of summons by which Bright Dental Pty Ltd was joined as the third defendant to the action.
11. On 6 March 2018, an amended statement of claim and re-amended writ of summons were filed on behalf of the plaintiff. On 7 March 2018, the parties agreed that a substituted statement of claim should be filed and the defendant should have leave to file a substituted defence and counterclaim.
12. A substituted defence and counterclaim was filed on behalf of all defendants on 4 April 2018. No reference was made to the Arvind Property (Discretionary) Trust in that pleading. A reply and defence to counterclaim was filed on behalf of the plaintiff on 1 May 2018.
13. An amended substituted defence and amended counterclaim was filed on behalf of the defendants on 25 July 2018. Again, no reference was made to the Arvind Property (Discretionary) Trust in that pleading.
14. The minute of proposed amended substituted defence and amended counterclaim (by which the admissions were sought to be withdrawn) was filed on 10 August 2018, about six months after the defendants' solicitor had first inspected and copied documents produced in response to the subpoena.
15. In an application such as this, much may depend upon the point the litigation has reached, relative to a trial, when the application to amend is made.[31] While there has been a delay in seeking to withdraw the admissions, I find that in all of the circumstances, it is not fatal to the application. While the proceeding has been on foot for over a year, the proceeding has not been entered for trial and trial dates have not been fixed.[32] The processing is not yet ready to be listed for trial. This is not a matter in which the amendment will cause the adjournment of a trial or the vacation of trial dates.

1. The defendants assert that there is no prejudice that is likely to be suffered by the plaintiff that cannot appropriately be compensated by an order for costs.[33] As to prejudice, three arguments were raised on behalf of the plaintiff. In the circumstances of this case, I find that prejudice to the plaintiff does not weigh significantly in the balance.

1. The plaintiff says that, in compliance with orders of the court, the plaintiff provided withdrawals of caveat on 7 November 2017. The plaintiff says that if the defendants are permitted to withdraw the admissions, he might otherwise be entitled to maintain his caveat in some form.[34]
2. From the court record, it appears that an application was made on 23 October 2017 on behalf of the first and second defendants for orders which, among other things, compelled the plaintiff to deliver to the defendants two duly executed withdrawals of caveat. The grounds of the application described by the defendants included the following.[35]

(a) in caveat N528763 C the plaintiff claimed an interest in the land in certificate of title volume 2736 folio 964 as chargee;
>
> (b) in caveat N528764 C the plaintiff claimed an interest in the land in lot 1 on strata plan 64934 as beneficial owner;
>
> (c) each caveat forbids the registration of any instrument affecting the estate or interest claimed by the plaintiff "absolutely";
>
> (d) the plaintiff lodged a statutory declaration made by the plaintiff on 10 January 2017 and in each declaration the plaintiff stated that his interest was as a unitholder of the Arvind Property Trust;
>
> (e) in Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2017] WASCA 179 it was held that in comparable circumstances the caveator was not entitled to lodge an absolute caveat;

1. The assertion of prejudice on behalf of the plaintiff was not further developed beyond what was stated at par 50 of the plaintiff's submissions filed 7 September 2018. Without further development of this assertion, it is not possible to give it any weight.

1. The plaintiff says that the injunction and the undertaking as to damages provided by the plaintiff on 31 August 2017 are predicated on the Property being the property of the Arvind Property (Unit) Trust. The plaintiff says that the withdrawal of the admissions may render the injunction a nullity and leave the plaintiff without adequate protection. The plaintiff says that a consequence of the defendants' application, if successful, is that the plaintiff will likely need to amend the terms of the injunction or to obtain a further injunction. Therefore, the plaintiff says that if the defendants are granted leave to withdraw the admissions, the defendants ought to pay the plaintiff's costs of any injunction application necessitated by the amendment.[36]
2. At the hearing of the application, Mr Metaxas observed that if the withdrawal was to create ambiguity in terms of the orders made by the Master on 29 August 2017 (which was not conceded), any ambiguity might be cured by the amendment to that order. Mr Metaxas also indicated that the order would be amended by consent.
3. By offering an amendment by consent, the potential prejudice raised by the plaintiff would appear to be negated.

1. The plaintiff says that Arvind Pty Ltd has made representations to the Australian Taxation Office such that the tax returns for the Arvind Property Trust for the financial years since 30 June 2010 confirm that the Arvind Property Trust is a unit trust.[37]
2. It is suggested that the plaintiff, as well as Mr Lamers and his wife personally (as beneficiaries of The Ben and Debra Lamers Family Trust), may need to prepare and submit amended tax returns with the ATO as far back as 2010 if the admissions are withdrawn. It is also said that they would have to do this without any explanation from the defendants, and that the amendments may expose them to penalties to the Australian Tax Office, in addition to further accounting expenses to enable those amendments to be made.[38]
3. This assertion of potential prejudice was not developed beyond what was stated at par 52 of the plaintiff's submissions filed 7 September 2018.
4. The defendants complain that the assertion of itself is insufficient and that the plaintiff ought to explain why there might need to be new tax returns filed; why the adverse consequences that are apprehended might possibly come about; and what principle of law or equity would operate so that the arrangements that have been applied thus far would be overturned somehow to the plaintiff's disadvantage.[39]
5. The assertion of potential prejudice was not developed on behalf of the plaintiff beyond what was stated at par 52 of the plaintiff's submissions. Without further development, the prejudice cannot weigh significantly in the balance.

1. In Water Corporation v Cardno BSD Pty Ltd, the court was satisfied that, despite a less than complete explanation as to the reasons to withdraw an admission, there was sufficient evidence for the court to conclude that the necessity came about by reason of error and not any other reasons.[40] In this case, the plaintiff properly complains about the failure by Mr Carbone to personally provide any explanation for the change in position. For the reasons set out above, this weighs heavily against leave being granted to withdraw the submissions.
2. Despite this, in weighing all of the factors discussed above, I find that the interests of justice are not served by holding the defendants to a defence that they do not want to run, in circumstances where the proceeding is not yet ready for trial and prejudice to the plaintiff does not weigh significantly in the balance. In all of the circumstances, good cause is made out and I will hear from the parties as to the appropriate form of orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RESEARCH ASSOCIATE/ORDERLY TO THE HONOURABLE ACTING JUSTICE STRK

CITATION : BERNARD HENRICUS LAMERS as trustee for THE BEN AND DEBRA LAMERS FAMILY TRUST -v- ARVIND PTY LTD [2018] WASC 347 (S)

BETWEEN : BERNARD HENRICUS LAMERS as trustee for THE BEN AND DEBRA LAMERS FAMILY TRUST

Practice and procedure - Costs following the defendants' successful application for leave to amend pleading - The effect of leave being granted was to allow the defendants to withdraw four admissions - Whether departure from the usual costs order is justified - Failure on the part of the applicant to personally provide any explanation for the change in position - Whether costs were unnecessarily incurred - Whether the consent of the plaintiff was unreasonably withheld - Turns on own facts

The defendants shall pay the plaintiff's costs of the application, including costs thrown away, to be taxed if not agreed.

Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347

Briggs v Curtis Quick & Associates [1998] WASCA 67; [1998] Library 980141

Stanley & Ors v Layne Christensen Company & Ors [2006] WASCA 56

1. On 15 November 2018 I delivered my reasons for decision on the application made on behalf of the defendants for leave to amend their substituted defence and counterclaim filed on 4 April 2018, in terms of a minute of proposed amended substituted defence and amended counterclaim filed on 10 August 2018.[41] Leave was granted, the effect of which was to allow the defendants to withdraw four previously made admissions.
2. The parties suggested that they first have the benefit of my reasons, and that they then be heard as to the appropriate form of order and as to costs.
3. After I delivered my reasons, the plaintiff and the defendants conferred and agreed orders to facilitate further amendments to the pleadings.[42] A timetable was agreed, by which the plaintiff would first file and serve an amended substituted statement of claim, and the defendants would subsequently file and serve an amended substituted defence and amended counterclaim. The defendants' amendments would be as proposed in the minute of proposed amended substituted defence and amended counterclaim filed on 10 August 2018, and otherwise as were responsive to the amended substituted statement of claim.
4. As to costs, written submissions were filed on behalf of the defendants and the plaintiff.[43] It was agreed that the court would determine appropriate orders as to costs on the papers.[44]
5. The defendants seek orders that the plaintiff pay the defendants' costs of their application, whereas the plaintiff seeks orders that the defendants pay the plaintiff's costs. Both proffer three alternative permutations of their contended orders.
6. For the reasons set out below, it is appropriate that the defendants pay the plaintiff's costs of the application, including costs thrown away, to be taxed if not agreed.
7. These reasons should be read in the context of what I have recorded in my reasons for decision on the substantive application.

1. At any stage of a proceeding, the court may allow any party to amend that party's pleading, on any terms as to costs or otherwise that may be just and in the manner (if any) that the court may direct.[45] The usual order is that the applicant for the amendment pays the opponent's costs incurred and thrown away by the amendment, and that the costs of any consequent amendment be the respondent's in any event. The applicant will not normally receive the costs of the application.[46]
2. Costs are however always within the discretion of the judicial officer concerned. It is usual for the court to have regard to the extent to which it might be said that costs were unreasonably incurred by a party, and the reasonableness of a party's conduct in responding to a request for indulgence, including whether consent was unreasonably withheld.[47]

1. The defendants contend that the circumstances of this case justify a departure from the usual order.
2. On 10 July 2018, the solicitors for the defendants sent a letter to the solicitors for the plaintiffs in relation to a number of issues raised by their inspection of documents subpoenaed from James Chong Lawyers. By that correspondence, it was suggested that the plaintiff should review his statement of claim, as the subpoenaed documents would undermine certain pleas. The defendants say that the plaintiff declined the invitation and so the defendants made their application. The application having succeeded, the plaintiff now proposes to amend the statement of claim, and the orders made on 15 November 2018 facilitate the same.
3. In summary, the defendants' position is that the defendants' invitation by letter dated 10 July 2018 should have been accepted, thereby avoiding significant costs to the parties. They contend that the reasons for the admissions to be withdrawn should have been obvious to the plaintiff.
4. At the hearing of the defendants' application, the court was informed that the amendment to par 13 (as proposed in the defendants' minute of proposed amended substituted defence) was not opposed, nor was the proposed withdrawal by the defendants of their counterclaim. However, the withdrawal of three previously made admissions was opposed by the plaintiff.
5. It is submitted on behalf of the plaintiff that the parties' solicitors conferred to try and resolve the issues in dispute. The plaintiff put the defendants on notice that his primary reason for not consenting to the leave application was due to the lack of an explanation by way of affidavit evidence from Mr Carbone personally.
6. In my reasons now delivered, I found that the plaintiff properly complained about the failure of Mr Carbone to personally provide any explanation for the change in position. I found that this weighed heavily against leave being granted to withdraw the admissions.[48]
7. By the submissions made on behalf of the defendants[49] it was suggested that a mistake was made by the defendants in making the admissions, which mistake was identified when the documents subpoenaed from James Chong Lawyers were inspected.
8. The affidavit sworn by Mr Metaxas did not directly address the circumstances in which the admissions were made. The defendants' proposed case also contradicted the previously sworn evidence of Mr Carbone, without explanation proffered by him directly.[50]
9. Despite the failure of Mr Carbone to personally provide any explanation for the change in position, in weighing all of the factors, I found that the interests of justice were not served by holding the defendants to a defence that they did not want to run, in circumstances where the proceeding was not yet ready for trial and prejudice to the plaintiff did not weigh significantly in the balance.[51]
10. In the circumstances of this case, it cannot be said that the plaintiff acted unreasonably, or was unjustified in withholding consent. In coming to this conclusion, I have had regard to the fact that the plaintiff also objected to the amendment on the grounds of prejudice, which (as noted above), I found ultimately did not weigh significantly in the balance.
11. In this case the court was, in effect, asked to take into account the circumstances described at 39.1 to 39.3 of the defendants' submissions filed in support of the application to amend, and to infer that a mistake was made.[52] Further, the significance of the proposed amendments, particularly the withdrawal of the admissions, was only made clear immediately prior to the hearing of the application.[53]
12. I find that costs were unnecessarily incurred by the parties, brought about by the failure in the defendants' conduct, including the failure of Mr Carbone to personally provide any explanation for the change in position. This failure has also weighed against my making an order for costs in the cause.

1. For these reasons, I find that it is appropriate to order that the defendants pay the plaintiff's costs of the application, including costs thrown away, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

Research Associate to the Honourable Acting Justice Strk

[1] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018.

[2] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 pars 5 and 6.

[3] Rules of the Supreme Court 1971 (WA) O 21 r 5(2).

[4] Warren v Lawton [2014] WASC 59 [25].

[5] Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 [19], referring to Sangora Holdings Pty Ltd v Dunstan (Unreported, WASC, Library No 990172, 13 April 1999); Hutton v Meston [2004] WASCA 178; Essex Securities Pty Ltd v Lunt [2006] WASC 58.

[6] Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 [28].

[7] Defendants' submissions on application to amend defence par 40.

[8] Affidavit of Arthur Metaxas filed 10 August 2018 par 2.

[9] Affidavit of Arthur Metaxas filed 10 August 2018 pars 18 and 19.1 ‑ 19.4.

[10] Affidavit of Arthur Metaxas filed 10 August 2018 par 21.

[11] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 pars 44 - 48.

[12] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 48.

[13] Swevenings Pty Ltd v Ferguson Consolidated Holdings Pty Ltd (No 4) [2009] FMCA 291 [45].

[14] Defendants' submissions on application to amend defence filed 23 August 2018 par 39. The references to February 2019 and 6 March 2009 in par 39.4 are clear typographical errors and are taken in this judgment to be references to February 2018 and 6 March 2018, respectively.

[15] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 30, referring to EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 2] [2011] WASC 8 [30]; Hutton v Meston [2004] WASCA 178 ; and Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212.

[16] Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 268.

[17] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 34. The plaintiff also notes at ft 35 that the decision of Sackville J in Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 268 at [45], was upheld on appeal (Jeans v Commonwealth Bank of Australia [2003] FCAFC 309); and special leave to the High Court was refused (Jeans v Commonwealth Bank of Australia [2004] HCA Trans 548).

[18] Defendants' submissions on application to amend defence filed 23 August 2018 par 41.

[21] ts 5 (14 September 2018). Counsel for the defendants also referred to Napier v Public Trustee (WA) (1980) 32 ALR 153; and Carter v Brine [2015] SASC 204, as authorities which support this conclusion.

[23] Defendants' submissions on application to amend defence filed 23 August 2018 par 42.

[24] As at 29 August 2017, Bright Image Dental had not yet been joined as a party to the proceeding as the third defendant.

[25] Affidavit of Mr Lamers sworn 18 August 2017 par 47, plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 7.

[26] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 15(c) and 16, referring to the plaintiff's statement of claim filed 26 October 2017 at par 13, and the defendants' defence filed 24 November 2017 at par 13.

[27] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 9, referring to the first and second defendants' defence filed 24 November 2017 at pars 7.2, 12.4 and 21.

[28] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 9; referring to the affidavit of Mr Lamers sworn 6 September 2018 at pages 8 to 11, and 12 to 21.

[29] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 11, referring to the affidavit of A Metaxas sworn 10 August 2018 at pars 3 and 4, the affidavit of B Lamers sworn 6 September 2018 at pages 28 ‑ 30.

[30] Affidavit of B Lamers sworn 6 September 2018 at par 9; and the affidavit of A Spencer sworn 7 September 2018 at par 4.

[31] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [102]; Warren v Lawton [2014] WASC 59 [26].

[32] In contrast to the application heard on the fifth day of trial by Sackville J in Deangrove Pty Ltd v Commonwealth Bank of Australia [2003] FCA 268.

[33] Defendants' submissions on application to amend defence filed 23 August 2018 par 43.

[34] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 50; affidavit of Mr Lamers sworn 6 September 2018 at [24] and page 124.

[35] Defendants' chamber summons for interlocutory injunction filed 23 October 2017.

[36] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 51.

[37] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 36; affidavit of Mr Lamers sworn 6 September 2018 at pages 115 ‑ 123.

[38] Plaintiff's submissions in response to defendants' application to amend its substituted defence and counterclaim filed 7 September 2018 par 52.

[40] Water Corporation v Cardno BSD Pty Ltd [2009] WASCA 212 [27].

[41] Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347.

[42] Orders 1 - 3 made with the consent of the parties on 15 November 2018.

[43] Defendants' submissions on costs filed 20 November 2018; plaintiff's submissions on costs in respect of defendants' application to amend substituted defence and counterclaim filed 27 November 2018.

[44] Orders 4 - 6 of the orders made by consent on 15 November 2018.

[45] Rules of the Supreme Court 1971 (WA), O 21 r 5(2).

[46] Briggs v Curtis Quick & Associates [1998] WASCA 67; [1998] Library 980141 (30 March 1998) page 14; Lexis Nexis, Civil Procedure Western Australia [21.5.25]; Stanley & Ors v Layne Christensen Company & Ors [2006] WASCA 56 [51] (5 April 2006).

[47] Stanley & Ors v Layne Christensen Company & Ors [2006] WASCA 56 [52] (5 April 2006).

[48] Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [64].

[49] Defendants' submissions on application to amend defence filed 23 August 2018, par 39.

[50] Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [26] - [27].

[51] Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [65].

[52] Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [32].

[53] ts 5 (14 September 2018); Bernard Henricus Lamers as trustee for The Ben and Debra Lamers Family Trust v Arvind Pty Ltd [2018] WASC 347 [33] - [36].