The defendant's contentions
10The second defendant takes violent issue with the plaintiff's contentions. It's propositions are as follows :
(4)The plaintiff has not provided evidence that would justify the Court exercising its discretion to allow the amendments and the second defendant would suffer significant prejudice were they to be allowed.
(5)If the amendments are allowed then there will be a very significant increase in costs and there would be no prospect of a final hearing this year.
(6)The plaintiff's counsel has informed the second defendant's counsel that none of the allegations made in the proposed amendments are to be made in the case against the First and second defendants. He should be required to confirm in open Court that this is the case, but if it is the case then there is no justification for seeking to introduce a case solely against the proposed Third to Fifth defendants into these proceedings.
(7)The plaintiff and the proposed Third and Fourth defendants are South African and it is pleaded that the proposed Fifth defendant is the alter ego of its director the Third defendant (paragraph 61). As the proposed Third, Fourth and Fifth defendants' solicitors have indicated, the relationship between those parties and the plaintiff will be governed by South African law, there are differences in the law (including as to limitation, constructive trusts and the operation of the Corporations Act 2001 (Cth) ) and there will be a challenge to forum.
(8)Even if a challenge as to forum were to be unsuccessful, there would be a considerable delay and increase in costs given the need for further commercial list responses, discovery, witness statements and expert evidence as to South African law.
(9)Even though it is said that the new allegations are not made as against the First and second defendants, it is difficult to see how the allegations made as against the First and second defendants in the case as against the Third to Fifth defendants would not impact upon the case as against the First and second defendants.
(10)There are no substantive amendments in respect of paragraphs 1 to 29 of the proposed 2 nd FACLS, but the proposed paragraphs 30 to 68 are new. These include allegations against the First and second defendants of dishonesty and fraud (paragraphs 48, 50, 65), of breach of fiduciary duty (paragraph 57, 64) and of other acts (paragraph 66).
(11)The allegations of dishonesty and fraud are not properly particularised at all let alone to the degree commensurate with the seriousness of those allegations; and the other new allegations against not only the First and second defendants but also the proposed Third to Fifth defendants are not confined to the alleged acts of importation previously particularised against the First and second defendants but instead are put at large until after discovery.
(12)Thus, for instance, the allegations of a dishonest and fraudulent design on the part of the First and second defendant, if made out in the case against the Third to Fifth defendants, would clearly be relevant to the issues in the case as against the First and second defendants, including as to whether there was in fact in force a relevant agency agreement, which forms the main issue in the case as between the plaintiff and the First and second defendants.
(13)The second defendant therefore has a considerable interest in the matters sought to be pleaded about the First and second defendants in the case against the Third to Fifth defendants. Proper particulars ought to have been given of the dishonesty/fraud allegations and, even if the First and second defendants would not be entitled to those (which they do not accept), the Third to Fifth defendants would be.
(14)Further, the plaintiff seeks to widen the case as to wrongful conduct on the part of the First and second defendants, not only as to the dishonesty/fraud allegations but also by not limiting the case to that already pleaded but reserving the plaintiff's position and withholding proper particulars until after discovery, presumably being by all parties.
(15)The plaintiff was aware of the involvement of the proposed Third defendant, the director and alleged alter ego of the Fourth and Fifth defendants (paragraphs 55 and 61), in the actions of the First and second defendants of which it makes complaint, when it first raised those complaints prior to commencing these proceedings.
(16)An explanation is required as to why the plaintiff has not sought to make these allegations before now (see Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 as explained in Cement Australia Pty Ltd v ACCC [2010] FCAFC 101 and Dye v Commonwealth Securities Ltd [2010] FCAFC 118). None has been proffered and the application must fail accordingly.