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[2010] FCAFC 101
respondent. The application for leave to appeal be refused with costs.
Cement Australia tried to stop the ACCC from changing its court documents on the first day of a big competition trial about flyash supply contracts. The trial judge let the ACCC add an alternative market definition limited to the finest grade of flyash, delayed the trial, and ordered the ACCC to pay the extra costs. Cement Australia asked the Full Court for permission to appeal that decision. The Full Court decided the appeal was allowed by the statute but refused permission because the trial judge had correctly applied the stricter rules from the Aon case, had properly accepted the ACCC lawyers' explanation that they had simply misunderstood the defence case, and had balanced the inconvenience to Cement Australia against the public interest in deciding the real dispute on its merits rather than on a pleading point. Because the costs order and the adjournment removed any lasting serious prejudice, leave to appeal was refused.
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The Australian Competition and Consumer Commission (ACCC) commenced proceedings on 12 September 2008 against seven respondents collectively referred to as the Cement Australia parties. The allegations concerned contraventions of ss 45, 46 and 47 of the Trade Practices Act 1974 (Cth) arising out of arrangements made between 2002 and 2006 under which the Cement Australia parties acquired flyash from power stations in south-east Queensland. Flyash is a by-product of coal combustion; a proportion of it is suitable for use as a partial cement substitute in concrete manufacture. The ACCC contended that the arrangements had the effect of foreclosing potential competitors from supplying concrete-grade flyash to concrete manufacturers in the region.
The proceeding was set down for a six-week trial commencing 23 March 2010. Extensive interlocutory steps, including exchange of affidavit evidence, had been completed on the basis of the markets originally pleaded by the ACCC: a market for unprocessed flyash and a market for concrete-grade flyash (defined by reference to Australian Standard AS3582.1 grades ranging from 55% to 75% fineness).
On the first day of the trial, senior counsel for the Cement Australia parties opened on the basis that there was demand only for flyash of 75% fineness or greater. Counsel for the ACCC immediately sought and, on the second day, formally applied for leave to amend the statement of claim to plead, in the alternative, a market limited to "fine grade flyash" (75% minimum fineness). The Cement Australia parties opposed the amendment. They relied on an affidavit detailing prejudice consisting of sunk preparation costs, the need to revisit evidence and cross-examination, disruption to witness availability, and the loss of the fixed trial dates.
The primary judge granted leave to amend, accepted that an adjournment would be required, ordered the ACCC to pay the costs of the first three days of hearing and all costs thrown away by reason of the amendment and adjournment, and vacated the remaining trial dates. His Honour reasoned that, although the ACCC bore primary responsibility for the late application, the failure flowed from an error of judgment rather than a deliberate tactical decision. He noted that the Cement Australia parties' pleadings, while not defective, had been somewhat opaque as to the precise distinction between concrete-grade and fine-grade flyash. He considered that an outcome adverse to the ACCC based solely on the absence of the alternative plea would be perceived by an informed lay observer as resting on a technicality, which would not enhance respect for the administration of justice. The public interest in resolving a competition dispute of significance on its merits also weighed in favour of allowing the amendment.
The Cement Australia parties applied for leave to appeal. A preliminary issue arose as to whether the application was competent having regard to the 2009 amendments to ss 20 and 24 of the Federal Court of Australia Act 1976 (Cth) and the decision in Dye v Commonwealth Securities Limited (No 2) [2010] FCA 817. The Full Court (Keane CJ, Gilmour and Logan JJ) heard the application on 9 August 2010 and delivered judgment on 18 August 2010.
The Full Court first held that the application was competent. It read s 20(3) and the new s 24(1AA) as operating only in respect of applications made in matters in which the original jurisdiction of the Court is to be exercised by a Full Court under s 20(1A) or s 20(2). Because the underlying proceeding had been brought before a single judge under s 20(1), the statutory prohibition on appeal from certain interlocutory decisions did not apply. The Court considered that Dye had proceeded on an incomplete understanding of the statutory text and the Explanatory Memorandum and was therefore wrongly decided on the competence point.
Turning to the merits of the leave application, the Full Court applied the Décor test: leave is granted only where the interlocutory order occasions substantial prejudice and there is a reasonable argument that it should be set aside. It further required the appellants to demonstrate House v The King error in the primary judge's discretionary decision.
The Court held that the primary judge had correctly directed himself to the principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 and to the statutory commands in ss 37M and 37N. Those provisions emphasise that the just resolution of disputes must occur as quickly, inexpensively and efficiently as possible, that delay and cost have deleterious effects on the parties, the Court and other litigants, and that parties and their lawyers are under a positive duty to conduct litigation consistently with the overarching purpose. The primary judge had expressly weighed those matters, including the inconvenience of losing a six-week trial date fixed 16 months earlier, the costs thrown away, and the impact on the Cement Australia parties (including the two individuals).
Nevertheless, several considerations supported the grant of leave to amend. First, the explanation given by ACCC counsel that they had not previously appreciated the full significance of the respondents' denial of the pleaded market was accepted as an error of judgment. The Full Court held that, in the circumstances, counsel's statement on instructions was a sufficient explanation; Aon does not lay down an inflexible requirement of sworn evidence in every case. The facts were materially different from Aon, where the plurality had found a deliberate tactical choice and no explanation at all.
Second, although the primary judge placed primary responsibility on the ACCC, he noted that the respondents' pleadings had been "a little opaque". While the respondents were under no obligation to plead their positive case, greater transparency might have avoided the problem. This finding was not an error; it formed part of the overall evaluative judgment.
Third, the amendment did not introduce an entirely new case. Much of the evidence already filed bore on both the original and the alternative market definitions. The "technicality" identified by the primary judge was the prospect that, after a full trial, the ACCC might fail solely because it had not pleaded the market that the evidence itself tended to support. An informed lay observer would regard such an outcome as unsatisfactory and as diminishing public confidence in the administration of justice. The Full Court held that this was a legitimate consideration and not a misapplication of Aon or the statutory provisions.
Fourth, as the docket judge, the primary judge was peculiarly well placed to assess the likely delay and the impact on the Court's list. Appellate courts should be slow to second-guess that assessment in the absence of House v The King error.
Finally, even if the Full Court had been required to exercise the discretion afresh, the fact that the adjournment had already occurred and that the Cement Australia parties had had the benefit of it (together with a costs order) meant that no subsisting substantial injustice remained. Insisting on a trial on the unamended pleading would not serve the interests of justice.
For these reasons the Full Court concluded that the decision was not attended by sufficient doubt to warrant a grant of leave and that no substantial injustice would be corrected by doing so. The application was refused with costs.
Prior to this decision, the law on late amendments was thought by some to be governed principally by the liberal approach in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, which had emphasised that case management considerations could not override the need to do justice between the parties and that costs could usually cure prejudice. The High Court in Aon Risk Services had corrected that understanding, stressing that the rules of court (and analogous statutory provisions such as ss 37M and 37N) require all relevant factors—including delay, cost, prejudice to other litigants, efficient use of court resources and the timely disposal of proceedings—to be weighed. An assumption that costs will always suffice was rejected. An explanation for delay is ordinarily required, and the fact that an arguable case can be raised is not decisive.
This judgment represents one of the first Full Federal Court applications of Aon in the specific context of a late amendment on the first day of trial that necessitates vacation of fixed dates. It confirms that Aon does not prescribe a rigid checklist or an absolute bar on late amendments. The overarching purpose in s 37M remains "the just resolution of disputes according to law" as quickly, inexpensively and efficiently as possible. The Court emphasised that nothing in Aon or the statute renders irrelevant the public interest in determining a case on its merits rather than on a pleading technicality that an informed lay observer would regard as unsatisfactory. The decision also clarifies the limited scope of the 2009 amendments to appellate jurisdiction, confining the bar in s 24(1AA) to a narrow class of procedural decisions made in Full Court matters.
After the decision, trial judges exercising the amendment discretion must demonstrably weigh the Aon factors and the statutory purpose, yet retain flexibility to consider the nature of the amendment, the explanation given, the extent to which the new case overlaps with existing evidence, and the likely perception of justice by the public. Appellate courts are reminded of the high threshold for interference with docket management decisions and the continued vitality of the Décor and House v The King constraints on leave applications and merits review.
Paragraph [19]: "It follows that we consider that Dye was wrongly decided and that the application for leave to appeal by the Cement Australia parties in this case is competent."
Plain English: The earlier single-judge decision that said you cannot appeal this kind of order was itself wrong. This appeal is allowed by the statute.
Paragraph [35] (quoting primary judge): "Notwithstanding my conclusion that primary responsibility for the present difficulty lies with the applicant, I fear that an informed lay person, observing these proceedings, would conclude that any outcome which did not involve consideration of the proposed amended case … would characterize such outcome as being based on a 'technicality'. Such a perception would not enhance respect for the administration of justice."
Plain English: Even though the ACCC should have seen the problem earlier, refusing the amendment would look to an ordinary person like letting the case fail on a technical pleading mistake. That would damage public trust in the courts.
Paragraph [39] (adopting Aon): "Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re pleading, when delay and cost are taken into account."
Plain English: Justice now includes doing cases quickly and cheaply. Parties still get a fair chance to put their real case, but the court can refuse late changes if they waste time and money.
Paragraph [69]: "The docket judge is charged with responsibility for the efficient management and determination of the cases within his or her docket. The extent to which an adjournment consequential upon an amendment of a pleading may adversely affect the due administration of justice in terms of a judge's docket is an issue which that judge is peculiarly well-placed to determine. This Court should be slow to attempt to 'second guess' the primary judge."
Plain English: The judge who manages the case day-to-day knows best how an adjournment will affect the court's schedule. Appeal judges should not lightly overturn that practical assessment.
Paragraph [77]: "It has not been demonstrated by the Cement Australia parties that the decision of the primary judge is attended by sufficient doubt to warrant the grant of leave to appeal or that the grant of leave to appeal would be necessary to correct a substantial injustice to them."
Plain English: Cement Australia has not shown any real legal mistake by the trial judge or any lasting serious harm that needs fixing on appeal. Leave is refused.
This judgment is triggered when a party seeks leave to amend a pleading on or shortly before the first day of a long-fixed trial, the amendment arises from an unanticipated construction of the opponent's case, the opponent claims prejudice from lost preparation and vacation of dates, and the trial judge grants leave on terms that the amending party pay the costs thrown away. It applies with particular force in complex regulatory litigation (especially competition cases) where market definition is central, the pleadings have left some ambiguity about product dimensions, and the evidence already filed substantially overlaps with the new case. The precedent is engaged whenever an appellate court is asked to review a docket judge's evaluative balancing of the Aon factors against the public interest in deciding the real controversy. It is not limited to competition law; the statements about competence, the sufficiency of counsel's explanation, the relevance of lay perception of justice, and the deference to the docket judge have general application to civil procedure in the Federal Court.
The judgment has been treated as an authoritative application of Aon Risk Services within the Federal Court. It is routinely cited for the proposition that Aon does not create a rigid barrier to late amendments but requires a holistic weighing of all relevant circumstances, including the nature of the amendment and the extent to which it can be said to rest on a "pleading technicality". Subsequent decisions have followed its clarification that an explanation given by counsel on instructions may, in appropriate cases, suffice without sworn evidence, especially where no tactical choice is apparent and the opponent does not challenge the explanation. The Court's disapproval of Dye has been accepted, confirming the narrow construction of ss 20(3) and 24(1AA). The emphasis on the docket judge's peculiar advantage in assessing listing prejudice has reinforced appellate restraint in procedural leave applications. The decision is also cited for the continued relevance of the public interest in quelling the whole dispute on its merits, provided the statutory purpose in ss 37M and 37N is not subordinated. Overall, the judgment is treated as confirming that Aon ushered in a stricter but not mechanical approach to late amendments, balanced by the need to maintain public confidence in the administration of justice.
The judgment leaves open the precise weight to be given to the "lay observer" consideration in cases where the proposed amendment introduces genuinely new factual inquiries rather than an alternative legal characterisation of essentially the same evidence. It does not definitively resolve how a court should treat an application where the amending party is a well-resourced regulator and the explanation for delay is less clearly an "error of judgment" than a conscious forensic choice. The boundary between acceptable "opacity" in a defence and a positive obligation to plead a narrower market definition remains fact-sensitive and undeveloped. Questions also persist about the interaction between the costs indemnity ordered in this case and the possibility of irrecoverable prejudice to individual respondents (such as reputational or personal strain) that cannot be compensated by money. Finally, the extent to which an appellate court may revisit a docket judge's assessment of listing impact when concrete evidence of prejudice to other litigants is placed before the Full Court is not exhaustively settled. These issues will require further elucidation in subsequent cases.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.
CEMENT AUSTRALIA (QUEENSLAND) PTY LTD ACN 009 658 520
AND: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
THE COURT: 1 On 12 September 2008, the Australian Competition and Consumer Commission (the ACCC) commenced proceedings against Cement Australia Pty Ltd and others (to whom we will refer collectively as "the Cement Australia parties"). The ACCC alleges that the Cement Australia parties had contravened or, in the case of individuals, were knowingly concerned in the contravention of, ss 45, 46 and 47 of the Trade Practices Act 1974 (Cth) (the TPA). The conduct in question is alleged to have occurred between 2002 and 2006. 2 The ACCC's case is that the Cement Australia parties entered into arrangements with power stations in south east Queensland to acquire flyash for use in the manufacture of concrete. These arrangements are alleged, among other things, to have the effect of excluding potential suppliers of flyash from competing with the Cement Australia parties in supplying concrete grade flyash to manufacturers of concrete in south east Queensland. 3 The primary judge described the case broadly at [1] of his reasons as follows: Most competition cases are complex. This case is no exception. It concerns the supply of flyash. Flyash is generated by power stations in burning coal. Some flyash is suitable for use in place of cement in the manufacture of concrete. The respondents are, in one way or another, engaged in acquiring flyash from power stations and supplying it to concrete manufacturers. Broadly speaking, the applicant asserts that the first to fifth respondents entered into contracts or other arrangements with power stations in south east Queensland to acquire flyash from them, and that the sixth and seventh respondents were knowingly concerned in such conduct. The applicant asserts that this conduct had the effect of excluding potential suppliers of flyash from competing with one or more of the respondents in supplying flyash in south east Queensland, involving breaches of ss 45, 46 and 47 of the Trade Practices Act 1974. 4 The ACCC originally alleged in its statement of claim that concrete grade flyash, ie, flyash suitable for the manufacture of concrete, is flyash of any one of the four grades of fineness described in Australian Standard AS3582.1. These grades of fineness range down from 75% fineness minimum to 55% - 65% fineness. The Cement Australia parties did not admit this allegation and said "further that concrete grade flyash is flyash suitable for use in concrete for commercial applications (commercial concrete-grade flyash) and that the nature of commercial concrete-grade flyash will vary depending on the source from which it originates and the application to which it is intended to be put". 5 The ACCC's case asserts the existence of two markets: the market for the supply and acquisition of unprocessed flyash in the south east Queensland region (the SEQ Unprocessed Flyash Market); and the market for the supply of concrete-grade flyash in the south east Queensland region (the SEQ Concrete-grade Flyash Market). It is this second market which is of concern on the appeal. The Cement Australia parties denied the existence of the SEQ Concrete-grade Flyash Market. They did, however, admit that "from time to time there was a demand for concrete-grade flyash, including by persons in the SEQ region who use concrete-grade flyash in the production of pre-mix concrete and concrete products". 6 On 31 October 2008, the matter was set down for trial for six weeks commencing 23 March 2010 on the basis that a number of interlocutory steps would be completed in the meantime. These interlocutory steps included the filing of affidavits containing the evidence on which the parties proposed to rely at trial. 7 When the matter came on for hearing, and in the course of the opening of the case by counsel for the ACCC, counsel for the Cement Australia parties informed the Court that their clients' case included the proposition that "there really is only demand - if there be demand at all - for flyash of the finest water, as it were, and that's for a whole series of technical reasons". By "the finest water", counsel explained, 75% plus fineness was meant. On this basis, the market for the supply of flyash to concrete manufacturers pleaded by the ACCC was too broad, including, as it did, flyash other than the fine grade or finer flyash suitable for the manufacture of concrete. 8 Counsel for the ACCC immediately indicated that they were taken by surprise by this proposition and indicated that they intended to seek leave to amend the ACCC's statement of claim. On the second day of the hearing, counsel for the ACCC applied for leave to amend the ACCC's pleading to plead as an alternative market to that which it had already pleaded, the existence of "a market for the supply of fine grade flyash in the SEQ region", fine grade flyash being that which is of 75% minimum fineness. 9 The Cement Australia parties opposed the application for amendment. In support of their opposition, the Cement Australia parties relied upon an affidavit which identified the prejudice which would enure to them if the amendment were to be permitted. This prejudice was said to consist of costs already incurred in preparation for trial, the preparation of the case including cross-examination and their evidence on the basis of the ACCC's pleaded markets which work would have to be redone in considering how to meet an alternative case, and arrangements made in terms of the trial for the Cement Australia parties' witnesses and lawyers. 10 Counsel for the Cement Australia parties accepted that counsel for the ACCC were indeed surprised by the proposition that the market alleged by the ACCC did not exist because the only market was for flyash of at least 75% fineness. Nevertheless, they argued that it did not follow that the ACCC or its solicitors were surprised by the position adopted by the Cement Australia parties. They argued that if it was to be said that the ACCC, as opposed to its counsel, were surprised, it was incumbent upon the ACCC to adduce evidence to that effect. 11 The learned trial judge granted the ACCC's application for leave to amend. The trial was adjourned. His Honour ordered that the ACCC pay the Cement Australia parties' costs occasioned by the amendment including the costs of the adjournment of the trial. 12 The Cement Australia parties now seek leave to appeal against the grant of leave to the ACCC to amend its statement of claim. Leave to appeal is necessary because the orders below are interlocutory. Before we consider this aspect of the matter further, it is necessary to deal with a preliminary point as to whether the appeal is competent.
is the appeal competent? 13 The ACCC argues, in limine, that the appeal is incompetent. It relies upon the recent decision of Dye v Commonwealth Securities Limited (No 2) [2010] FCA 817 where Nicholas J held that s 20(3) and s 24(1AA) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) rendered incompetent an appeal from an interlocutory judgment refusing leave to amend a statement of claim. 14 Section 24 of the Federal Court Act was amended by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth). It now provides relevantly: 24 Appellate jurisdiction (1) Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine: (a) appeals from judgments of the Court constituted by a single Judge exercising the original jurisdiction of the Court; … (1AA) An appeal must not be brought from a judgment referred to in paragraph (1)(a) if the judgment is: (a) a determination of an application of the kind mentioned in subsection 20(3); or (b) a decision to join or remove a party, or not to join or remove a party; or (d) a decision to adjourn or expedite a hearing or to vacate a hearing date. (1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal. (1B) Subsection (1A) is subject to subsection (1C). (1C) Leave to appeal under subsection (1A) is not required for an appeal from a judgment referred to in subsection (1) that is an interlocutory judgment: (a) affecting the liberty of an individual; or (b) in proceedings relating to contempt of the Court or any other court. … (1E) The fact that there has been, or can be, no appeal from an interlocutory judgment of the Court in a proceeding does not prevent: (a) a party from founding an appeal from a final judgment in the proceeding on the interlocutory judgment; or (b) the Court from taking account of the interlocutory judgment in determining an appeal from a final judgment in the proceeding. 15 Section 20 of the Federal Court Actwas also amended in 2009. It now provides: 20 Exercise of original jurisdiction (1) Except as otherwise provided by this Act or any other Act, the original jurisdiction of the Court shall be exercised by a single Judge. (1A) If the Chief Justice considers that a matter coming before the Court in the original jurisdiction of the Court is of sufficient importance to justify the giving of a direction under this subsection, the Chief Justice may direct that the jurisdiction of the Court in that matter, or a specified part of that matter, shall be exercised by a Full Court. (1B) Subsection (1A) does not apply in relation to indictable primary proceedings. (2) The jurisdiction of the Court in a matter coming before the Court from a tribunal or authority (other than a court) while constituted by, or by members who include, a person who is a Judge of the Court or of another court created by the Parliament shall be exercised by a Full Court. (2A) Subsections (1A) and (2) have effect subject to subsections (3) and (5). (3) Applications: (a) for leave or special leave to institute proceedings in the Court; or (b) for an extension of time within which to institute proceedings in the Court; or (c) for leave to amend the grounds of an application or appeal to the Court; or (d) to stay a decision of the tribunal or authority mentioned in subsection (2); must be heard and determined by a single Judge unless: (e) a Judge directs that the application be heard and determined by a Full Court; or (f) the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it is appropriate for it to hear and determine the application. (4) The Rules of Court may make provision enabling applications of the kind mentioned in subsection (3) to be dealt with, subject to conditions prescribed by the Rules, without an oral hearing either with or without the consent of the parties. (5) In a matter coming before the Court as mentioned in subsection (1A) or (2), a single Judge (sitting in Chambers or in open court) or a Full Court may: (a) join or remove a party; or (aa) make an interlocutory order pending, or after, the determination of the matter by a Full Court; or (b) make an order (including an order for costs) by consent disposing of the matter; or (c) make an order that the matter be dismissed for want of prosecution; or (d) make an order that the matter be dismissed for: (i) failure to comply with a direction of the Court; or (ii) failure of the applicant to attend a hearing relating to the matter; or (da) vary or set aside an order under paragraph (aa), (c) or (d); or (db) in relation to a civil matter, give directions under subsection 37P(2); or (e) give other directions about the conduct of the matter, including directions about: (i) the use of written submissions; and (ii) limiting the time for oral argument. (5A) An application for the exercise of a power mentioned in subsection (5) must be heard and determined by a single Judge unless: (a) a Judge directs that the application be heard and determined by a Full Court; or (b) the application is made in a proceeding that has already been assigned to a Full Court and the Full Court considers it is appropriate for it to hear and determine the application. (6) The Rules of Court may make provision enabling the powers in subsection (5) to be exercised, subject to conditions prescribed by the Rules, without an oral hearing either with or without the consent of the parties. 16 In Dye, Nicholas J said that it was "clear enough" that s 20(3)(c) of the Federal Court Act includes an application to amend a statement of claim and that such an interpretation accorded with the ordinary meaning of the provision. 17 Reference to the text of s 20 of the Federal Court Act set out above, and, in particular, to s 20(2A), shows that s 20(3) is concerned only with cases involving the occasions of the exercise of the original jurisdiction of the Federal Court for which provision is made by s 20 (1A) and s 20(2). Section 20(3) does not speak, at all, to cases involving the exercise of the original jurisdiction of the Court by a single judge of the Court pursuant to s 20(1) of the Federal Court Act. It can, therefore, be seen that s 24(1AA) is concerned to preclude appeals from orders made by a single judge in matters in which the original jurisdiction of the Court is to be exercised by a Full Court by reason of s 20(1A) or s 20(2) of the Federal Court Act. 18 This understanding of the operation of s 24(1AA) is confirmed by reference to the Explanatory Memorandum which accompanied the bill for the amendments. Section 24(1AA) was introduced into the Act by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009. The Explanatory Memorandum to the Bill states, relevantly: [80] … new subsection 24(1AA) provides that there is no appeal to the Full Court from a number of specified interlocutory decisions of a single Judge exercising original jurisdiction. [81] These interlocutory matters involve minor procedural decisions for which there should be no avenue of appeal. The removal of the right to appeal for these types of matters will ensure the efficient administration of justice by reducing delays caused by appeals from these decisions. 19 The limits on the scope of s 20(3) and s 24(1AA) were not drawn to the attention of Nicholas J in Dye. His Honour's decision reflects the resolution of the arguments presented to him; nevertheless, it proceeds on an unsound appreciation of the scope of the 2009 amendments to the Federal Court Act. It follows that we consider that Dye was wrongly decided and that the application for leave to appeal by the Cement Australia parties in this case is competent.
LEAVE TO APPEAL 20 Leave to appeal against an interlocutory order will usually be granted only where the applicant is able to show that the order occasions substantial prejudice to the applicant and there is a reasonable argument that the order should be set aside: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 21 Leave to amend the ACCC's statement of claim was sought pursuant to O 13, r 2 of the Federal Court Rules. Relevantly it provided that: (1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit. (2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings. 22 The ACCC submits that O 13, r 2(2) of the Federal Court Rules (which has since been omitted) was the procedural rule which informed the nature and extent of the discretionary judgment in this case and that there are well established limitations on an appellate court's capacity to review such a judgment. In Rigato Farms Pty Ltd v Ridolfi [2001] 2 Qd R 455, de Jersey CJ said, at [23]: [a]ppeal courts should be especially circumspect about interfering with decisions on matters of practice and procedure. As put by the High Court (Adam P Brown Male Fashions Pty Ltd v Philip Morris (1981) 148 CLR 170, 177) 'particular caution' must be exercised. The constraints confirmed in House v The King are real constraints, to be respected not perfunctorily discarded, and they are especially powerful, in limiting an appellate court, in a case of this character. 23 It is, of course, incumbent on the Cement Australia parties to demonstrate that the trial judge's decision was vitiated by error of the kind explained in House v The King (1936) 55 CLR 499 at 505. It is convenient to proceed directly to a consideration of the reasons of the trial judge and the issues raised by the Cement Australia parties. We will then consider whether the decision below is attended by such doubt as would warrant the grant of leave to appeal.
the reasons of the trial judge 24 The trial judge proceeded to determine the ACCC's application on the understanding that if the amendment sought for by the ACCC were to be allowed the Cement Australia parties would be entitled to an adjournment of the trial. 25 In ruling upon the ACCC's application for the amendment, the trial judge was exercising a judicial discretion. His Honour noted that the trial dates for the matter had been fixed for more than 16 months. His Honour appreciated that this circumstance was apt to prejudice the Cement Australia parties. His Honour summarised the competing considerations which were relevant to the exercise of his discretion. In this regard, his Honour said: [24] Such a late application for amendment, where it is likely to result in the adjournment of a potentially lengthy trial, may cause serious injustice to other parties. The respondents also point out that the applicant's investigation of the matter commenced some years ago. However the proceedings themselves were only commenced in September 2008. Nonetheless the trial dates have been known since 31 October 2008. As the High Court pointed out in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the injustice and inconvenience inherent in allowing a late amendment cannot always be adequately remedied by an order for costs. Further, the Court's duty to do justice as between the parties will not necessarily compel it to allow a proposed amendment simply in order to ensure that the party in question has an opportunity to ventilate all issues which it wishes to raise. Where there has been ongoing case management the Court should not lightly accede to applications for amendment to raise matters which ought to have been identified in the course of such management. On the other hand, there is substantial community benefit in ensuring that the processes of the Court effectively quell the whole of the dispute between the parties. It will generally be unsatisfactory if an aspect is left unresolved. A doubt may hang over the conduct of a particular party, which doubt cannot be either confirmed or dissolved by appropriate judicial proceedings. This is particularly true where the matter is of significant public interest. 26 The trial judge was also alive to the consideration that although the issue as to the alleged distortion of the market was a matter of public interest, the ACCC could not properly be treated as a favoured litigant. His Honour said: [25] The applicant is charged with the enforcement of the Trade Practices Act. It should therefore be able to bring substantial expertise to bear in connection with its investigations and any subsequent court proceedings. In many cases such expertise will be much greater than that available to other parties to such proceedings. In seeking to enforce the Act it is, of course, performing an important public function. The proceedings may be distinguished from proceedings between private parties. However that does not mean that the applicant is a favoured litigant, or that its shortcomings should be ignored. 27 It is important to note that his Honour was also alive to the prejudice which might ensue to all the Cement Australia parties by reason of further delay in the determination of the proceedings: [26] I readily concede that there is potential unfairness to the respondents in adjourning the trial in order to allow them to respond to the applicant's proposed amendment. It seems that such an adjournment will be inevitable in the event that I allow the amendment. I approach the question of leave to amend on that basis. 28 His Honour discussed the parties' pleadings at some length. He noted that the affidavit evidence filed by the parties prior to trial was to the effect in most cases that only fine grade flyash is suitable for the manufacture of concrete. The trial judge concluded that the reason for the ACCC's amendment was a want of understanding on the part of counsel for the ACCC as to "the nature of [the Cement Australia parties'] challenge to the [ACCC's] pleaded market". In this regard, his Honour said: [27] … Traditionally, a market is said to have four dimensions, the product, the temporal dimension, the geographical dimension and the functional dimension. Identification of the product is fundamental to any definition of a relevant market. Notwithstanding the fact that in para 44 the respondents deny existence of the alleged market, the applicant seems to have thought that in establishing that market it would not have to address identification of the relevant product. It seems not to have realized that it might have to deal with an argument that there was no relevant market for the supply of the product identified in its pleading as concrete-grade flyash, and that if it established only that there was a market for fine grade flyash, its case might fail. … [30] … The respondents' pleading in response to para 37 seems to admit that concrete-grade flyash may be used in concrete manufacture, but only if it is of sufficiently high quality. As I have said the evidence apparently suggests that only fine grade (or finer) flyash will generally be suitable. The matter is further complicated at para 40 of the further amended statement of claim. The respondents admit only a demand for concrete-grade flyash "from time to time". The words "from time to time" and the earlier qualification upon the suitability of concrete-grade flyash (as defined in the further amended statement of claim) significantly limit the extent of any admission otherwise inherent in para 40 of the defence. 29 His Honour also noted a difficulty in terms of the geographical dimension of the market pleaded by the ACCC: [31] Finally, the respondents deny the allegations contained in paras 43 and 44. The plea to para 43 is of some significance. It seems that the applicant's case depends to some extent upon the proposition that concrete-grade flyash sourced from outside of south east Queensland is not an economic substitute for flyash produced in that area. The respondents suggest that the effective cost of transporting fine grade flyash is less than that of coarser grades. Common sense suggests that this is correct. I understand that there is evidence to the same effect. Thus the geographical dimension of the relevant market for fine grade flyash may be larger than that for concrete-grade flyash. It is also important that the respondents deny existence of the market alleged in para 44 of the further amended statement of claim. 30 The trial judge noted the "cri de couer" of counsel for the ACCC to the effect that the problem had arisen because of the opacity of the pleading by the Cement Australia parties. [32] Counsel for the applicant assert that the respondents' pleadings do not raise a case based on the distinction between fine grade flyash and concrete-grade flyash. It is more accurate to say that the respondents have been careful to limit the extent to which their pleadings raise new factual assertions. Both sides have indicated that they will be leading evidence which seems to suggest that fine grade flyash is widely, perhaps generally, used in the manufacture of concrete, and that coarser grades are much less frequently used. It is difficult to understand the relevance of that evidence if it is not as to identification of the relevant product for the purpose of market identification. Counsel for the applicant seem to accept that this is the primary purpose of the evidence but maintain that they did not realize that the applicant might have to face a finding that its market as pleaded had not been made out because the relevant market was for fine grade or finer flyash rather than concrete-grade flyash. They submit that the applicant could not be expected to have understood the respondents' case in that way simply because such an outcome would inevitably be less favourable to the respondents than a finding that the market was as pleaded. I do not necessarily accept that assertion. As I have previously observed, fine grade flyash may be produced by electro-static precipitators at the power stations or by sorting, using a classifier. It is also possible that fine grade flyash might be produced by grinding coarser material. There is, I am told, evidence as to the length of time necessary to establish a classifier. These matters may affect both product identification and the temporal dimension of the relevant market. As I have already observed, it might be that fine grade flyash can be brought into south east Queensland from other regions at a cost which makes it an economic substitute for the local product. This might affect product description and/or the geographical dimension of the market. These are all matters that arise routinely in competition cases. 31 His Honour's view was that, although it was difficult to assess the ultimate significance of the proposed amendment to the just resolution of the proceedings, the principal fault on the issue of product description as an element of market identification lay with the ACCC. His Honour said: [33] At this stage in the case I find it difficult to assess the significance of the proposed amendment with any degree of confidence. It seems to me, however, that the applicant ought to have recognized, in advance of the trial, the possibility that it would have to meet a case based upon the proposition that the relevant product was fine grade flyash, given that it was, on the evidence, by far the dominant product supplied to concrete producers. Quite apart from that matter, the respondents' denial of the alleged market for concrete-grade flyash means that all aspects of the applicant's market definition are in issue. The question, then, is whether, accepting that the applicant failed timeously to raise a significant issue in its pleading, it should now be allowed to amend to deal with that matter, notwithstanding the fact that such amendment will result in loss of the trial dates and significant inconvenience and/or expense to all concerned, including some public expense. 32 Notwithstanding his Honour's conclusion that the late application for an amendment was occasioned principally by the fault of the ACCC, he was disposed to regard that fault as an error of judgment, rather than a deliberate tactical decision by the ACCC. His Honour was prepared to act on this view of the case, even though the ACCC had not filed an affidavit to explain its position. The judge said: [34] Counsel for the respondents point out that the applicant has offered no sworn evidence demonstrating that the applicant, by its staff, had not previously considered the possibility that its product definition was too broad. However the applicant's legal representatives say that they had not previously identified the problem. I accept that assertion. That was an error of judgment of the type contemplated by the High Court in Aon at [77] and [109]. The fact that a late amendment is prompted by a realization that there has been an earlier error of judgment does not, of itself, lead to the conclusion that the amendment should be allowed. On the other hand there is a substantial public interest in having a matter of this kind resolved on its merits, and not on the basis of what may, in the end, appear to be a mere technicality. Further, although I am not persuaded that the respondents were obliged to go further than they did in pleading their case, it may have been more helpful had they clearly asserted that not all flyash satisfying the Australian Standard is generally used in manufacturing cement. It may be that that they were anxious to avoid asserting the existence of a particular market. Fairly clearly, they were careful to challenge the factual assertions in dispute, but they did so in a way which was a little opaque. Had they been somewhat more transparent in their pleadings, the present situation may not have arisen. Nonetheless the present problem is primarily attributable to the applicant's failure to accept the full consequences of the respondents' denial of the market as pleaded and to respond accordingly. Perhaps it was a case of seeing what it wanted to see. [35] Notwithstanding my conclusion that primary responsibility for the present difficulty lies with the applicant, I fear that an informed lay person, observing these proceedings, would conclude that any outcome which did not involve consideration of the proposed amended case, and was unfavourable to the applicant, would characterize such outcome as being based on a "technicality". Such a perception would not enhance respect for the administration of justice. For that reason, and because the applicant's failure to raise the amendment at an earlier time appears to have been the result of an error of judgment which might have been avoided had the respondents been a little less opaque in their pleadings, I will allow the proposed amendment. The substantial public interest in the enforcement of the Trade Practices Act is also relevant in this regard. I accept that the necessary consequence of allowing the amendment is that the trial will be adjourned, raising the question of costs. 33 Accordingly, the trial judge allowed the application for the amendment, adjourned the trial and ordered that the ACCC pay the costs of the hearings on 23, 24 and 25 March and the costs otherwise thrown away as a result of the amendment. His Honour vacated the balance of the trial dates.
The issues on the application for leave to appeal 34 The Cement Australia parties argue that the trial judge erred in allowing the application for the amendment. They contend that they should be allowed to proceed to trial on the basis of the markets originally pleaded by the ACCC. 35 In particular, the Cement Australia parties contend that the trial judge erred in adhering to the liberal approach to applications for amendment taken in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 153-155, and thereby failing to give effect to the more rigorous approach to late applications affirmed in the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (Aon Risk) on the basis that the injustice and inconvenience involved in allowing a late amendment cannot be remedied by an adjournment and an order for the payment of the costs thrown away. 36 In particular, the Cement Australia parties contend that the trial judge erred: (a) in accepting, in the absence of evidence, the assertion that the ACCC's legal representatives had not previously identified the problem which gave rise to the need to amend the ACCC's statement of claim; (b) in finding that the ACCC's failure to raise the amendment at an earlier time was the result of an error of judgment which might have been avoided had the Cement Australia parties been a little less "opaque" in their pleadings; (c) in having regard to the position of a lay person observing the proceedings and in finding that the lay person observing the proceedings would conclude that any outcome which did not involve consideration of the proposed amended case and was unfavourable to the ACCC was based on a technicality; (d) in failing to have any or any adequate regard to the prejudice and costs likely to be incurred by those of the Cement Australia parties who were individuals arising from the allowing of the amendment and the adjournment of the trial. 37 We propose to address these arguments after first making some general observations.
GENERAL CONSIDERATIONS 38 In Aon Risk, the proceedings were commenced in December 2004 against three insurers for indemnity for loss from fire suffered in January 2003. The broker, Aon Risk Services Australia Ltd, ("Aon") was joined as a defendant in June 2005. On the third day of the trial, which had been set down for four weeks, the plaintiff sought an adjournment of the trial against Aon and foreshadowed an application for leave to amend its claim to allege a substantially different case. The trial was adjourned, but the application for leave to amend the plaintiff's claim was not heard until approximately two weeks later in November 2006, and the decision to grant leave was not made until October 2007. The plaintiff, in an affidavit in support of its application for leave to amend "did not offer any explanation for the need to amend": see Aon Risk 239 CLR 175 at [53]. The learned judge who allowed the amendment, and the majority of the Court of Appeal, considered that the application was to be resolved on the basis that the new allegations raised "real triable issues" and that the case "fell squarely within principles to be drawn from JL Holdings": see Aon Risk 239 CLR 175 at [62]-[63]. Lander J, who dissented in the Court of Appeal of the ACT, held that "it could be inferred that (the plaintiff) deliberately adopted the course that it did (in not raising the new claim earlier)" and that the plaintiff "should have been required to conduct its case 'in accordance with the decision it made some years before'": see Aon Risk 239 CLR 175 at [64]. 39 In Aon Risk 239 CLR 175 at [98], Gummow, Hayne, Crennan, Kiefel and Bell JJ noted that "a just resolution of proceedings remains the paramount purpose" under the rules of court there under consideration; but that "what is a 'just resolution' is to be understood in light of the purposes and objectives stated". Their Honours observed: Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs. 40 Their Honours at [111]-[113] rejected the proposition that the powers of a court to allow an amendment to a pleading should, as a general rule, be exercised in favour of allowing the amendment subject only to the payment of costs thrown away as a result. Their Honours said: 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 J L 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. (Footnotes omitted). 41 In Aon Risk, the High Court was concerned particularly with Rule 21 of the Court Procedures Rules of the ACT. Rule 21 was in the following terms: (1) The purpose of this chapter, and the other provisions of these rules in their application to civil proceedings, is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense. (2) Accordingly, these rules are to be applied by the courts in civil proceedings with the objective of achieving - (a) the just resolution of the real issues in the proceedings; and (b) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (3) The parties to a civil proceeding must help the court to achieve the objectives. (4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court. 42 Gummow, Hayne, Crennan, Kiefel and Bell JJ said specifically in relation to Rule 21 at [114]: Rule 21 of the Court Procedures Rules recognises the purposes of case management by the courts. It recognises that delay and costs are undesirable and that delay has deleterious effects, not only upon the party to the proceedings in question, but to other litigants. The Rule's objectives, as to the timely disposal of cases and the limitation of cost, were to be applied in considering ANU's application for amendment. It was significant that the effect of its delay in applying would be that a trial was lost and litigation substantially recommenced. It would impact upon other litigants seeking a resolution of their cases. What was a "just resolution" of ANU's claim required serious consideration of these matters, and not merely whether it had an arguable claim to put forward. A just resolution of its claim necessarily had to have regard to the position of Aon in defending it. An assumption that costs will always be a sufficient compensation for the prejudice caused by amendment is not reflected in r 21. Critically, the matters relevant to a just resolution of ANU's claim required ANU to provide some explanation for its delay in seeking the amendment if the discretion under r 502(1) was to be exercised in its favour and to the disadvantage of Aon. None was provided. 43 The philosophy said by their Honours to inform Rule 21 of the Court Procedures Rules of the ACT can also be discerned in s 37M and s 37N of the Federal Court Act. Those sections are relevantly in the following terms: 37M The overarching purpose of civil practice and procedure provisions (1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, inexpensively and efficiently as possible. (2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. (3) The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose. (4) The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings: (a) the Rules of Court made under this Act; (b) any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Court. 37N Parties to act consistently with the overarching purpose (1) The parties to a civil proceeding before the Court must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose. (2) A party's lawyer must, in the conduct of a civil proceeding before the Court (including negotiations for settlement) on the party's behalf: (a) take account of the duty imposed on the party by subsection (1); and (b) assist the party to comply with the duty. … 44 Of particular importance, in the context of the present case, is s 37N, which imposes a duty on the parties to a dispute to conduct the proceeding in a manner consistent with the overarching purpose proclaimed by s 37M. 45 Before turning to the particular grounds of complaint agitated in this Court by the Cement Australia parties, we should observe that insofar as the trial judge gave significant weight to the consideration that the achievement of justice in the particular case before him favoured allowing the amendment, that was not contrary to the decision in Aon Risk or anything in s 37M or s 37N of the Federal Court Act. Nothing in Aon Risk or the Federal Court Act suggests that this consideration is not relevant to the exercise of the discretion to permit or refuse an amendment. Rather, the point made in Aon Risk is that this consideration must not be allowed to trump other relevant considerations, including considerations of the kind reflected in s 37M and s 37N of the Federal Court Act.
NO EVIDENCE OF AN ERROR OF JUDGMENT by the accc 46 The trial judge found that there was an error of judgment by the ACCC of the type contemplated by the High Court in Aon Risk: see at [34], [77] and [109]. In so finding, his Honour acted upon the acknowledgment by counsel for the ACCC that they had not previously identified the problem: see at [27] and [34]. The Cement Australia parties submit that his Honour erred in this regard. 47 The Cement Australia parties do not dispute that the ACCC's counsel did not previously identify the problem with the way the market had been pleaded. However, they contend that there was no evidence from the ACCC or its solicitors deposing as to the reason it had not sought to make the amendment earlier and as to whether the ACCC, by its staff or its solicitors, had previously considered the alternative market or the possibility that its product definition was too broad. They say that this was the position despite: (a) an affidavit having been provided on behalf of the Cement Australia parties in support of their opposition to the application to amend; (b) the High Court in Aon Risk emphasising the need for such evidence; and (c) the absence of evidence from the ACCC being specifically raised in oral submissions and the respondent being asked whether it intended to lead such evidence. 48 While he acknowledged the absence of such sworn evidence, the trial judge appears to have accepted the statements of counsel for the ACCC as being sufficient evidence of the position of the respondent. 49 The Cement Australia parties contend that these statements did not constitute a proper basis upon which to find that there was an error of judgment absent such an explanation from the ACCC itself. The absence of such evidence, they argued, was critical given the denial of the markets alleged by the ACCC, the evidence of the ACCC's witnesses that fine grade flyash may be a distinct product, the findings of the ACCC's expert as to the product market as well as the evidence of the Cement Australia parties as to the preference for supply of fine grade flyash for use in making concrete: see at [22]. Accordingly they contend that, in this context, it was a matter upon which evidence had to be provided. 50 The Cement Australia parties submit further that the ACCC, which is charged with the enforcement of the TPA, with particular expertise would be expected to have directed its mind to the market in which it alleges contraventions of the TPA took place: see at [25]. This meant, the Cement Australia parties say, that evidence from those instructing the ACCC and counsel was critical to any proper determination of the application and, in the absence of such evidence, a court could not be satisfied that any error of judgment had occurred nor that leave to amend was appropriate. The appellants submit that in this respect the case is indistinguishable from Aon Risk. 51 Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application. 52 The responsibility as to how the respondent's case was pleaded, having regard to the available evidence and the applicable law, ultimately belonged to counsel for the respondent. In our opinion, the explanation from them, accepted albeit in the limited sense as it was by senior counsel for the appellants, was in this circumstance a sufficient explanation capable of acceptance by the primary judge. There was no need for an enquiry beyond that given by the counsel whose responsibility it was to plead the ACCC's case. This is a very different position to that in Aon Risk. There the reason the claim introduced by amendment had not been raised before was the result of a deliberate tactical decision on the part of the ANU: Aon Risk 239 CLR 175 at [4] and [24]. The delay in proposing the amendment in Aon Risk was such as to demand an explanation. As the plurality noted at [106] none was given. 53 Counsel for the Cement Australia parties made much of the absence of an affidavit from an officer of the ACCC or its solicitors to explain that the problem with too broad a definition of the product dimension of the markets had not previously been identified. In this Court, counsel for the Cement Australia parties contend that the reasons of the High Court in Aon Risk require such evidence. We do not agree. 54 In Aon Risk, Gummow, Hayne, Crennan, Kiefel and Bell JJ at 239 CLR 175 [103] and [106], said: [103] The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in JL Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case. … [106] Given the requirements of the Rule and the effects associated with delay, it was incumbent upon ANU to tender an explanation as to why the matter had been allowed to proceed to trial in its existing form. It needed to explain why it was seeking leave to amend at the time of the trial, when the two insurer's defences had identified the issue central to the claim it sought to bring against Aon more than twelve months earlier. None was given. His Honour was in error in accepting that ANU had provided a satisfactory explanation. The statements made by counsel foreshadowing leave to amend were not evidence. The ANU's solicitor's later affidavit did not support them. In addition to the defences, the letters written by Chubb in 2003 showed that ANU was told of the importance of the valuation of the property to the insurers long before the receipt of more recent documentation. ANU's solicitor did not suggest that the defences, raising the same matter in connection with the misrepresentations, were misunderstood in their potential relevance to Aon. He did not say that ANU was first alerted to Aon's possible involvement as a result of what was said in mediation. 55 It is apparent from these passages that their Honours were more concerned that there be an explanation as to how the late application comes to be made, than the form in which the explanation was proffered. It is apparent from [34] of the reasons of the trial judge (which we have set out at [32] of these reasons) that his Honour was alive to the absence of a sworn affidavit by an officer of the ACCC as to the reason for the late application for an amendment to ACCC's statement of claim. It is also apparent that his Honour was disposed to accept the explanation proffered by the ACCC's counsel (to which no objection was taken) as an explanation of how the need for the amendment arose. His Honour was content to regard the reason for the late application as an error of judgment by counsel. That view of the facts of this case distinguishes this case from Aon Risk where the view which prevailed was that the origin of the problem was a deliberate decision on behalf of the plaintiff. 56 In summary on this point, the gravamen of the submission put by the Cement Australia parties under this heading is that those instructing counsel for the ACCC may actually have appreciated that the Cement Australia parties' case was that only flyash of a fineness of 75% or better was in demand by manufacturers of concrete and deliberately refrained from drawing that appreciation to the attention of counsel for the ACCC. The trial judge was entitled to regard that hypothesis as so far-fetched - especially in the absence of any apparent tactical reason for deliberately taking such a decision - that he could reject it, even in the absence of a sworn denial by an officer of the ACCC. His Honour's view as to the opacity of the pleadings is also relevant here.
THE CEMENT AUSTRALIA PARTIES' OPAQUE PLEADINGS 57 The trial judge, in deciding to grant leave to amend, found and then took into account that the respondent's error of judgment might have been avoided if the Cement Australia parties had been a little less opaque in their pleadings: see at [34] and [35]. His Honour observed that "it may have been more helpful had they [the Cement Australia parties] clearly asserted that not all flyash satisfying the Australian Standard is generally used in manufacturing cement." 58 The challenge to these particular findings of the primary judge is, in our opinion, misconceived. Whilst his Honour indeed made those observations, his critical finding at [34] was that he was not persuaded that the Cement Australia parties were obliged to go further than they did in pleading their case. This followed from his Honour's earlier finding at [33] that the ACCC ought to have recognised, in advance of the trial, the possibility that it would have to meet a case based upon the proposition that the relevant product was fine grade flyash, given that it was, on the evidence, by far the dominant product supplied to concrete producers. 59 It is important to look at what the primary judge found to be the reason for the pleading problem. His Honour said: An important consideration, in deciding whether or not to allow the amendment, is the reason for the late application. In the end, it seems that counsel failed to understand the nature of the respondents challenge to the applicant s pleaded market. 60 The Cement Australia parties' complaint, seen in that light, is a straw man. His Honour concluded his findings in this context by stating clearly that the problem in question was primarily attributable to the ACCC's failure to accept the full consequences of the Cement Australia parties' denial of the market as pleaded and to respond accordingly.
ADMINISTRATION OF JUSTICE 61 The Cement Australia parties contend that the amendment sought by the ACCC was not a mere "technicality" and could not properly be perceived as one. Rather, the amendments sought to be made by the ACCC were of the definition of the product market, a matter fundamental to being able to respond to any case involving a contravention of s 45 and s 46 of the TPA. It follows, they submit, that it could not be properly considered or characterised as a technicality. 62 We do not consider that describing an outcome adverse to the respondent if the amendment were not allowed as perhaps based on a 'technicality' was a suggestion by the trial judge that the amendment was not important or significant. It seems to us that it was both of these things. However, it was not, as was the case for example in Aon Risk,a completely different case. The joint judgment in Aon Risk 239 CLR 175 at [99] and [104] described the effect of the amendment as requiring Aonto again defend litigation to be commenced afresh. Rather, it was an alternate pleading of 'market' for the purposes of the Trade Practices Act case which inevitably embraced evidence which was also relevant to the markets originally pleaded. Whilst there may not have been a complete overlap of evidence and whilst the alternate case may have had repercussions, as the trial judge acknowledged, for aspects of what constituted the relevant market for fine grade flyash, such as the geographical dimension, it was not in an evidentiary sense an entirely new case. Indeed, whilst having no obligation or indeed intention to prove as part of its defence that a narrower market for fine grade flyash existed, the apparent intent of the appellants in respect to the primary case of the respondent was to demonstrate, as a matter of fact, that there was no relevant market for the three grades of flyash pleaded at [26] of the Statement of Claim. This it seems would be achieved by demonstrating that the dominant grade supplied, by far, was fine grade flyash. It is not a great leap to arrive at a conclusion that if there was a market then it was for a product comprising that grade alone. 63 Accordingly the 'technicality' described by his Honour, it seems to us, referred not to the alternate case, as a case, but rather to the fact that following a trial where the evidence might have warranted a conclusion as to the existence of a more limited market, nonetheless, the respondent would fail because such an alternate case supported by that evidence had not been pleaded. In other words, at an evidentiary level, for the most part, although not entirely, the evidence going to the primary case includes that going to the alternate case. The 'technicality' properly understood was a pleading technicality. 64 Next, the Cement Australia parties submit that his Honour failed to give proper consideration in this context to the matters of administration of justice identified by the High Court in Aon Risk: the effect upon the administration of justice of a six-week trial that had been set down for approximately 18 monthsbeing adjourned, which encompassed the Cement Australia parties having both to revisit interlocutory steps, their evidence, cross-examination and other steps for trial as well as the potential waste of court resources and the strain that the litigation imposes upon the litigants, particularly in the context of the present proceedings involving individuals. 65 The trial judge may be taken to have been conscious of and to have factored into his judgment the state of listings in the Queensland registry of this Court upon the question of likely delay and the effect on other litigants whose cases were awaiting trial. He was entitled to do so: see Sali v SPC Ltd (1993) 67 ALJR 841, referred to with approval in the joint judgment in Aon at [26]. However, their Honours pointed out at [27] that the mischief engendered by unwarranted adjournment and consequential delays in the resolution of civil proceedings goes beyond the particular effect on the Court in which those delays occur. 66 The trial judge did not mention all of these matters in his reasons. However, ultimately, against his assumed knowledge of the listings of the Court it may be inferred that his Honour considered that any delay would not be undue. Accordingly it follows implicitly in his Honour's reasoning that while there will always be inevitable irreparable prejudice which follows delay, it would not in this case likely be undue prejudice. The exercise of discretion involves, necessarily, a balancing exercise. 67 Importantly, to adapt the joint judgment in Aon Risk at [102] to reflect the relevant statutory provision in the present case, the objectives in s 37M of the Federal Court Act do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. 68 There is nothing in Aon Risk or s 37M and s 37N of the Federal Court Act which would suggest that the consideration that it is desirable that the case be decided on its merits, so as to preserve public confidence in the administration of justice, is a consideration irrelevant to the exercise of his discretion. 69 It should be borne in mind that the extent to which the granting of an amendment which will lead to an adjournment of a trial may have the adverse effect upon the orderly administration of justice envisaged by the High Court in Aon Risk is a question in relation to which a trial judge of the Federal Court enjoyed a peculiar advantage. In the Federal Court, individual matters are allocated to the dockets of particular judges. The docket judge is charged with responsibility for the efficient management and determination of the cases within his or her docket. The extent to which an adjournment consequential upon an amendment of a pleading may adversely affect the due administration of justice in terms of a judge's docket is an issue which that judge is peculiarly well-placed to determine. This Court should be slow to attempt to "second guess" the primary judge. In the present case, it is, in our respectful opinion, not open to this Court to regard it as an error on the part of the trial judge that he failed to act on the footing that other litigants and the Court would be disrupted to an unacceptable degree by the necessity for an adjournment, or that there would be undue delay before the trial of the adjourned proceedings. 70 Finally on this point, we are unable to accept the criticism advanced by the Cement Australia parties that his Honour's exercise of discretion was vitiated by his reference to a hypothetical "lay observer". The law is familiar with the use of such anthropomorphic metaphors for an objective judgment of community standards, eg "the reasonable man", "the officious bystander". The use of such a point of reference to give concrete expression to the concern to judge what course is best likely to maintain public confidence in the administration of justice is not an indication of error by the trial judge.
INDIVIDUALS WITHIN THE cement australia PARTIES 71 The separate interests and concerns of the individual Cement Australia parties did not loom large in the course of the hearing before the learned judge. It may readily be accepted that "personal litigants are likely to feel the strain (of litigation) more than business corporations or commercial persons" (Aon Risk 239 CLR 175 at [101]). In this case, however, the affidavit material relied on by the Cement Australia parties did not suggest that the individual respondents were affected by particular matters of separate and special concern to them. In these circumstances, it is hardly surprising that his Honour did not expressly concern himself with any special prejudice to these individuals. Such a concern was not specifically raised with him. 72 His Honour was, as we have mentioned, fully cognisant of the effect of the further delay on all the Cement Australia parties. The long-standing statutory requirement of leave to appeal confirms the desirability of keeping appeals on matters of practice and procedure on a short leash: see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177. A party, who seeks leave to argue that the primary judge erred in failing to uphold an argument which was not advanced to the primary judge, faces difficulty in demonstrating an error which would warrant the grant of leave to appeal. In a case where the putative error goes only to a complaint about the manner in which a discretion was exercised by the primary judge, that difficulty is compounded by the problem that any injustice to the applicant is a consequence of the way in which that party's case was conducted at first instance.
substantial prejudice AND LEAVE TO APPEAL 73 Even if the Court were to conclude that the trial judge's discretion had miscarried so that it fell to this Court to exercise the discretion afresh, there would be powerful discretionary reasons to decline to exercise that discretion by disallowing the amendment to the ACCC's statement of claim. If this Court were called upon now to exercise this discretion, the Court could not ignore the circumstance that the Cement Australia parties have had the benefit of an adjournment to consider their position in light of the amendment and to take such steps as they deem fit to meet the ACCC's reformulated case against them. To insist that the trial proceed to a decision otherwise than on the real merits of the case would be entirely out of proportion to any prejudice suffered by the Cement Australia parties in light of the terms on which the adjournment was granted. 74 Counsel for the Cement Australia parties argued that this Court, if it was satisfied that the trial judge's decision was vitiated by error, should approach the fresh exercise of its discretion on the basis of the facts as they appeared at trial, rather than at the present time. 75 In Aon Risk, as is apparent from the reasons of French CJ, the amendment was such as inevitably to cause further delay, such as to undermine public confidence in the administration of justice. The error of the Courts below lay in not taking this factor into account. French CJ said 239 CLR 175 at [35]: It might be said that the adjournment effected by the primary judge's decision to entertain the amendment application and to allow written submissions to be filed and evidence to be put on, and the subsequent delay in his decision, rendered academic any concern about further waste of court resources or inefficiencies flowing from the amendment ultimately being allowed. It might be said that, in those circumstances, to refuse the amendment would be punitive. It is true that a punitive response to the substance of a later amendment application is not appropriate. But neither is a party to be rewarded by weighing in its favour the disruptive consequences of its own application. In any event the granting of the amendment in this case, at the time it was granted, meant that there would still be further delay while interlocutory processes flowing from the new claims were put in place. Aon had to prepare a new defence. The further delay, in the circumstances of this case, would be such as to undermine confidence in the administration of civil justice. This factor was not taken into account by the primary judge, nor by the Court of Appeal. The discretion of the primary judge miscarried and the Court of Appeal was in error in not allowing the appeal. In the circumstances, giving proper weight to the factors to which I have referred, the application for the amendment should have been refused. 76 There is, in our respectful opinion, nothing in the observations of French CJ which supports the view that this Court should not have regard to the facts as they presently appear in the exercise of its discretion to grant leave to appeal or to refuse the ACCC's application for leave to amend its statement of claim.
CONCLUSION AND ORDERS 77 It has not been demonstrated by the Cement Australia parties that the decision of the primary judge is attended by sufficient doubt to warrant the grant of leave to appeal or that the grant of leave to appeal would be necessary to correct a substantial injustice to them. We are also unable to discern a subsisting substantial injustice to the Cement Australia parties, the correction of which would warrant the grant of leave to appeal. 78 The application for leave to appeal should be refused with costs. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Keane and Justices Gilmour and Logan.
Cement Australia Pty Ltd
Australian Competition and Consumer Commission
(1981) 148 CLR 170
(2009) 239 CLR 175
(1991) 33 FCR 397
(1936) 55 CLR 499
(1997) 189 CLR 146
(1993) 67 ALJR 841
The application for leave to appeal be refused with costs.