Edingbay Pty Ltd v Horwath

Supreme Court of Victoria|1999-09-06|Before: Hansen J.

The application of Horwath to amend its statement of claim against ABL is refused.

Horwath submitted that the amendment was sought to correct an error in par. 40 and that the application was made "out of an abundance of caution only". The purpose of the amendment was explained as being to make clear that Horwath was making a claim against ABL that it had breached its retainer, duty of care or fiduciary duty. This was in addition to the claim under the which was based on a liability of ABL to any plaintiff which might succeed against Horwath. In other words, Horwath had its own claim against ABL. It was said that this was always known and that the case had been conducted on this basis. Yet it had never been alleged in the statement of claim that Horwath had suffered loss and damage. Counsel said that Horwath's loss consisted of the amount of any judgment which any plaintiff might recover against it. On this basis the relief which Horwath would seek against ABL - separate and distinct from its claim under the - would be an indemnity or, it would seem, more correctly, damages in the nature of an indemnity in respect of any such judgment liability to a plaintiff. Counsel referred to the reference to such relief against a solicitor in Nocton v Lord Ashburton at 943 - 944.

It was submitted that the plea in par. 39 stated that any liability of Horwath to any plaintiff by reason of Horwath having given the alleged advice or made the alleged representations was the result of ABL's breach of its retainer with, or duty owed to, Horwath. It was submitted that par. B of the prayer for relief was apt to pick up this liability. So understood, it was submitted that the pleading contained in summary form the necessary material facts to found the claim which Horwath wished to make. Counsel also relied on the principle that it is for the Court having found the facts which constitute the plaintiff's grievance, to find and give the appropriate remedy: Wicks v Bennett [1921] HCA 57; (1921) 30 CLR 80 at 100. A prayer for general relief is sufficient for this purpose, even if a specific prayer for relief may be refused. In this case there is the prayer for an indemnity which considered on its terms and without regard to the pleading, would be adequate authority to award Horwath an indemnity as Horwath claims it always intended to seek. The question of substance with which I have to deal is more concerned with the pleading itself and with the question whether, having regard to the pleading and the relevant circumstances, the discretion as to amendment should be exercised in favour of Horwath.

Horwath's apparent oversight in this regard may have been understandable if the parties had deliberately conducted the case on the basis, inter alia, of the "direct claim" as distinct from conducting the case on the pleadings. It is unnecessary to recount the numerous references in the authorities which deal with the importance of pleadings as defining the issues, and as providing the basis for a fair trial, and which are reflected in the requirements of the rules of Court. On this issue counsel for ABL referred to Water Board v Moustakas [1988] HCA 12; (1987) 180 CLR 491 at 497, and Banque Commerciale S.A. (en liq) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286. In the latter case, at 286 - 287 Mason C J and Gaudron J said:

"The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (In liq.), [ [1916] HCA 81; (1916) 22 CLR 490 at 517] per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secure's a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities."

The question is whether such leave should be granted. The High Court in State of Queensland v J.L. Holdings Ltd [1997] HCA 1; (1997) 189 CLR 146, and the Court of Appeal in Howarth v Adey [1996] VicRp 84; [1996] 2 VR 525, have provided guidance on the approach to this issue. Ordinarily an amendment is to be allowed for the purpose of enabling the real question in controversy between the parties to be determined (see O.36.01(1) of the Supreme Court Rules), at least where any prejudice to the opposite party can be met by an order for costs or adjournment or such other terms as may be appropriate. That much is axiomatic and everyday practice in the Court. The judge dealing with an application to amend has to consider it in light of all the circumstances then obtaining in the case. For while it is important that a party wishing to present a case be enabled to do so, justice at law is a two-way street. In the joint judgment of Dawson, Gaudron and McHugh JJ in J.L. Holdings their Honours said (at 155) that:

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