This matter turns upon the question of whether or not the plaintiffs, many years after they first filed a statement of claim against the defendant, should be granted leave to file a further iteration of their originating process. The defendant resisted the proposition of the plaintiffs that they should have that leave on a number of bases.
Background
The background of the substantive dispute between the parties is as follows. Some years ago now, the two plaintiffs, and companies associated with them, sought to develop property as a shopping centre in the Sydney suburb of Campbelltown. Pursuant to a written agreement, the defendant was retained as, at the least, a leasing broker whose role was to find and introduce potential tenants of the centre (I shall not proceed to detail that role further here, because there is a dispute between the parties about its true extent).
Regrettably, the global financial crisis badly affected the project. The associated companies were placed in liquidation, and the liquidators purported to assign any rights that those companies had as against the defendant to the plaintiffs (again, I express myself in that tentative way because there will be a dispute at trial about whether or not that purported assignment was a valid one).
In August 2011, the plaintiffs filed a statement of claim in this Court. Since that time, the proceedings have not moved forward efficiently, and no hearing date has been set. Indeed, a second order sought from me foreshadows the possibility of further evidence being filed by the plaintiffs.
In short, the pleading as it stood at the time of the hearing before me (by way of an amended statement of claim filed on 6 August 2012) alleges that the defendant breached its duty of care to the plaintiffs by failing to implement an adequate leasing strategy and structure in a timely manner. As well as that, it alleges that the defendant failed to provide its services under the agreement with reasonable care, skill and diligence.
The proposed latest version (received after the hearing of the motion by consent, with attendant written submissions from both parties), alleges that the defendant was under a duty to negotiate and secure the best possible outcome for the plaintiffs under the agreement; that the defendant knew, or ought to have known, that there was a risk that the plaintiffs would suffer loss if that duty was breached; and that the defendant was in breach of its duty by failing to implement an appropriate leasing strategy in a timely manner, and allocate sufficient human resources to identify, find and locate lessees.
As I have said, the defendant resisted leave being granted with regard to the latest pleading. Its grounds of opposition became refined by the close of submissions. They can be summarised as follows.
First, the proceedings have dragged on long enough, and the responsibility for the delays must be laid at the feet of the plaintiffs. The defendant certainly bears no responsibility for them. There must come a point where a plaintiff should be held to a pleading, and, in this case, that point is now in the past.
Secondly, when one compares the latest proposed pleading to the document said to found liability, one can see that that part of the cause of action is simply unsustainable; in the alternative, it is so tenuous that I should exercise my discretion not to permit the amendment.
Aspects of the hearing of the motion
As is not uncommon, a process of refinement helpfully occurred throughout the hearing.
At first, the plaintiffs moved upon a notice of motion filed on 30 July 2015. However, by the end of the hearing, I had been provided with a written submission that was filed in court and that set out the six orders that senior counsel for the plaintiff reformulated as being appropriate.
Separately, it became clear that the proposed pleading could be the subject of yet further refinement, in order to take into account some of the concerns of the defendant expressed at the hearing. It was for that reason that I permitted the plaintiff to provide to my Chambers the final proposed pleading, and received brief written submissions from each party thereafter about that final version.
Submissions of the plaintiffs
In short, the plaintiffs submitted that they should be provided with the opportunity to amend yet again. It was accepted that the litigation had not been conducted optimally, but it was said that, whoever is in truth to blame for that, that cannot be said to be the plaintiffs personally. As part of the hearing of the motion before me, Mr Terry Bassal was cross-examined on an affidavit, and copies of emails between Mr Terry Bassal and his former solicitors were tendered in evidence. It was not disputed that the two plaintiffs had eventually withdrawn the instructions of their former solicitors. And it was said on behalf of the plaintiffs that there was no evidence that either of them had been personally dilatory.
Separately, it was said that I was in no position to decide affirmatively whether or not the pleaded assertions in the final proposed pleading could or could not be maintained, in light of any seeming disjunction between what it is the defendant apparently contracted to do, and the failings of the defendant alleged by the plaintiff. Reference was made to the proposition that interpretation of contracts is not always a question of merely construing the words that appear on the signed piece of paper.
In short, it was submitted that it would be contrary to the interests of justice for me to shut the plaintiffs out from pleading their cases as they see fit in these proceedings. And it was said that the latest proposed pleading was neither so clearly doomed to failure as to be futile, nor to possess such tenuous prospects of success as to tell in favour of me exercising a discretion against the amendment.
Submissions of the defendant
The submissions of the defendant may be summarised as follows.
First, not having heard from all interested persons, it is, as a matter of procedural fairness, impossible for me to assign specific blame for the very substantial delay in the prosecution of this matter. The result of that is that there must be a sense in which a substantial proportion of the responsibility for the delays should be laid at the feet of the plaintiffs personally.
Secondly, it is true that no hearing date will be disrupted or endangered by an amendment. But that hardly tells in favour of the application: the only reason why there is no hearing date is because of the delays in the preparation of the matter by the plaintiffs.
Thirdly, it is true that the defendant cannot point to any particular prejudice, such as lost evidence or enquiries foregone, that will arise as a result of the amendment. But there is a general prejudice that accrues to the defendant, a well-regarded professional firm, by way of the pendency for years of these allegations of (in effect) incompetence against it. And quite apart from that, I would safely infer that the particular individuals whose professional conduct is personally impugned continue to suffer extra stress for every day during which resolution of the matter is delayed.
Fourthly, a simple comparison between the contract that founds the alleged liability of the defendant (however the cause of action is precisely pleaded) and the latest version of the pleading clearly shows that some of the asserted failings of the defendant cannot fall, expressly or by implication, within what it is the defendant actually agreed that it would do.
In short, it was said that the proposed amendment cannot be sustained on the evidence, and is therefore futile. In the alternative, for a number of reasons, the amendment should not be permitted in the exercise of my discretion.
It was also submitted at the hearing that, if I were minded to make the amendment, there should be a "down payment" as to costs on the part of the plaintiffs, payable forthwith, before further forensics steps could be taken by them.
Finally, in the written submissions received in my Chambers with regard to the final version of the proposed pleading, it was said that, if I were against the defendant on the motion, I should order a number of further and better particulars. That proposition was resisted in the written submissions of the plaintiff received shortly thereafter.
Determination
Turning to my determination, on the documentary and oral evidence placed before me, there is no evidence that either of the plaintiffs has personally delayed this matter. Indeed, I find that Mr Terry Bassal has been diligent in seeking to have the matter proceed to resolution. I shall not delve deeply into the documents that were placed before me, nor into the cross-examination of Mr Terry Bassal. It suffices to say that, far from being dilatory, I am satisfied on the balance of probabilities that Mr Terry Bassal has been enthusiastic to have the matter proceed, and has been personally exasperated by the delays.
Of course, not having heard from all interested parties, I do not presume to assign blame to anyone. Nor is it a matter of embarking, in the timeous determination of a simple motion, upon an analysis of questions of onus or the use of circumstantial evidence as to who is responsible for the delays. It is enough to say that, on the evidence placed before me at this interlocutory stage, I am not satisfied that either plaintiff should bear personal responsibility for the delays in this matter.
Separately, I think there is force in the submission of the defendant that the proposed pleading appears to go well beyond the written contract, in terms of the asserted failings of the defendant. But acceptance of that proposition is one thing; it is another thing for me to say that I am affirmatively satisfied that the proposed pleading is so hopeless as to be futile, or so tenuous as to lead me to exercise my discretion not to permit it. As recently as 14 October 2015, the High Court of Australia in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37 discussed the question of the correct approach to the construction of contracts. I shall not delve into that in detail either; it is sufficient to say that I accept the submission of the plaintiffs that a written document said to show the terms of a contract is not always the beginning and end of the matter. And what other evidence may be available to the parties that sheds light on the true nature of the agreement and that is to be relied upon at the hearing is not a matter that I am able to determine on the material placed before me on the motion.
Nor do I accept the proposition of the defendant that any portion of the latest version of the pleading is so lacking in "internal logic" or "grammatically or syntactically challenged" (to adopt the characterisations used in the final written submissions of the defendant) as to call for prohibition of determination of its merits by me.
The effect of refusing leave would be to prohibit the plaintiffs from pursuing their asserted claim against the defendant as they see fit. That is a large step to take in the absence of endangerment of a trial date or other actual prejudice to the corporate defendant, and one that I would not take unless I were soundly satisfied that it were in the interests of justice. Having reflected on the matter, I do not possess that level of satisfaction.
In short, I certainly accept that this matter must move towards resolution promptly. But, in the circumstances of this case, I am not prepared to force the plaintiffs to move towards a hearing without having settled their originating process to the satisfaction of their new solicitors. Certainly, there should be separate orders that move the matter forward expeditiously, and protect the interests of the defendant. But I consider that the second to fourth orders proposed in the document provided to me at the hearing by senior counsel for the plaintiff achieve those goals.
Finally, as for the proposition that further and better particulars from the plaintiffs should be ordered by me, that assertion of the defendant arose late, and I was unable to receive the assistance of the parties at the hearing with regard to it as a result. In the circumstances, that controversy must await another day, because I am not in a position to determine the question of whether particulars should be ordered merely on the basis of an exchange of brief written submissions about the topic after the hearing had closed.
Costs
The final point of contention is costs. To my mind, nothing has been established by the defendant that should lead me to insist that the plaintiffs pay some form of interim costs at this stage, whether by way of a "down payment", or any other mechanism. That is particularly the case when the making of such an order could, in a practical sense, stymie the advancement of a possibly meritorious claim.
Having said that, the plaintiffs did not resist the proposition of the defendant that they should pay the costs of the defendant thrown away by this latest amendment, and I regard that as perfectly appropriate.
As for the separate question of costs of the motion, the plaintiffs have enjoyed substantial success at the end of a hard-fought hearing. It involved the appearance of two members of the inner Bar, and took up a whole day of hearing time.
To be weighed against that is the fact that the plaintiffs were seeking an indulgence from the court. It is also the fact that the orders ultimately sought by the plaintiffs were not those notified in the notice of motion, and indeed there needed to be yet another version of the statement of claim provided to me after the hearing had concluded, with the attendant time and expense of further written submissions.
Seeking to balance all of those countervailing factors, I consider that costs of the hearing before me should simply be the plaintiffs' costs in the cause.
Orders
I make the following orders:
1. The plaintiffs have leave to file a second further amended statement of claim in the form provided to my Chambers on 21 October 2015.
2. The plaintiffs are to file and serve a second further amended statement of claim in that form within 7 days of the date of this judgment.
3. The defendant is to file and serve a defence to that second further amended statement of claim within 21 days of the delivery of this judgment.
4. Within 28 days after the defendant has filed its defence, the plaintiffs may, by way of a notice of motion, make an application to adduce any further evidence in the proceedings.
5. The plaintiffs must pay the costs of the defendant thrown away by reason of the amendment.
6. The costs of the notice of motion filed 30 July 2015 are the plaintiffs' costs in the cause.
7. The matter is listed before the Common Law Registrar for Directions at 9 AM on Friday 5 February 2016.
[3]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 27 November 2015