First Plaintiff/First Defendant by Counterclaim v First Defendant/Plaintiff by Counterclaim

2 The application was adjourned (part heard) on 11 April 2025 to give further time for the Taylor parties to put on additional material on the question of delay in seeking leave to amend. The application returned to Court on 16 May 2025 but was adjourned to give both parties an opportunity to consider and address the impact of the death of the second plaintiff/second defendant to counterclaim, Mr Hamilton. The Court has been informed that all the persons named as executors in the Will of Mr Hamilton consent to being substituted as a party in place of Mr Hamilton, including as a plaintiff, and have stated that they will not take an active part in the proceeding. But there is no evidence before the Court of any grant of representation (e.g. a grant of probate) and no evidence that all the persons identified to the Court as executors have given their written consent to being joined as plaintiffs. As a result, as outlined to the parties at the hearing, the Court will proceed to determine the application to amend and timetable an application for substitution of the executors of the estate of Mr Hamilton. In addition, none of the impugned amendments include claims against the estate of Mr Hamilton.

3 This ruling assumes familiarity with the pleadings, including defined terms.

4 The applicable law is well established and was not in dispute. In Carroll v Goff[1] the Court of Appeal said:

1. Under r 36.01 of the Rules, this Court may, at any stage, grant leave to a party to amend any document in the proceeding in order to determine "the real question in controversy between the parties to any proceeding". This turns on whether the proposed amendment would be in the interests of justice, which question may be informed by:

• whether there will be substantial delay caused by the amendment;
• the extent of any wasted costs;
• whether there is an irreparable element of unfair prejudice caused by the amendment;
• concerns of case management arising from the stage at which the amendment is sought;
• whether the grant of the amendment will lessen public confidence in the judicial system;
• whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.

1. Further, the Court will not permit an amendment that has no real prospects of success.

5 As observed by the Court of Appeal in Northern Health v Kuipers[2]: 'The Civil Procedure Act 2010 ('Act') is pivotal to the resolution of disputes about case management issues in civil proceedings to which this Act applies'. I refer, in particular, to ss 7, 8 and 9.

6 Streicholz submits that the proposed new claims have no real prospects of success. As a result, it is convenient to first determine whether I am satisfied that the proposed new claims have no real prospects of success. This is because if I am so satisfied, leave will be refused. In broad summary, Mr Taylor seeks to now rely upon events in 2006 to claim that the Second FROR became an option to acquire the Property upon the 7 July Terms alternatively the Freidman Terms. Streicholz relied upon three grounds to submit that the claims have no real prospects of success.

1. Second, the proposed claim relies on the existence of "triggering" events in the sense described in the cases in 187 Settlement Road v Kennards Storage Management Pty Ltd [2022] VSC 771 at [40]- [41]. As shown by those cases, what constitutes a "trigger" depends on the terms of the relevant clause. Determining that question in relation to the "Second FROR" requires considering cl 8 of the Heads of Agreement as a whole. Clause 8 confers a right "if Splendidus, its shares, or that section are for sale or transfer and no sale or transfer shall be effected without Taylor and/or his Nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee". Read as a whole, the "trigger" requires there to be a "proposed purchaser or transferee" and final terms capable, if executed, of constituting a sale or transfer to that proposed purchaser or transferee.
2. There were no such terms here. The 7 July Terms were simply a draft contract, never accepted by any "proposed purchaser or transferee". The "ongoing discussions" of the "Fridcorp Terms" never progressed beyond, at best, an agreement to enter into a due diligence process (see exhibit VON-1 at 11 to 16). Following that process, Fridcorp did not pursue a sale. "Splendidus, its shares, or that section" were never "for sale" in the sense required by cl 8.

1. Merits: It is a matter of construction for the Court to determine, at the trial of the proceeding after considering all of the evidence, whether cl 8 of the HoA required "there to be final terms capable, if executed, of constituting a sale or transfer." It is open to the Court to construe cl 8 as merely requiring the essential terms: subject matter, price, time for payment. Many of the clauses in the Contract provided by Minter Ellison to Fridcorp are standard clauses. Further, in the interests of justice, a full hearing is appropriate to determine the implied term issues sought to be raised by the amendments[.]

9 The alleged Second FROR is in the following terms:

(j) it was a term of the Heads of Agreement that: "Taylor and/or his nominee/s will have the first right of refusal over the Splendidus section if Splendidus, its shares, or that section are for sale or transfer and no sale or transfer shall be effected without Taylor and/or his Nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee". (Clause 8) (Second FROR)

10 The pleas concerning the triggering events are set out in paragraphs 45 and 46:

1. The sending of the email set out in paragraph 38 above had the effect that the Splendidus section, namely the Property, was:

"for sale or transfer" within the meaning of that expression as used in clause 8 of the Heads of Agreement;

such that the Second FROR was triggered, and SFPL was required to offer to sell the Property to Taylor (and/or his nominee/s) on the same terms as then proposed by SFPL, being the terms set out in the Contract (7 July Terms).

1. Alternatively to paragraph 45 above, the sending of the letter set out in paragraph 41 above had the effect that the Splendidus section, namely the Property, was:

"for sale or transfer" within the meaning of that expression as used in clause 8 of the Heads of Agreement;

such that the Second FROR was triggered, and SFPL was required to offer to sell the Property to Taylor (and/or his nominee/s) on the same terms as then proposed by SFPL, being the terms set out in the Contract as varied by the matters set out in paragraphs 39 and 40 above (Fridman Terms).

11 Paragraph 45 relies upon paragraph 38 which provides:

1. On 7 July 2006, Corinne Wells of Minter Ellison, on behalf of SFPL, forwarded by email to Paul Fridman of Fridcorp, inter alia, the following:

(a) a draft contract of sale (Contract) which provided, inter alia;

(i) Price: $26,000,000.00 which does not include GST;

(ii) Deposit: $5,200,000.00, payable as follows:

1. $2,600,000.00 payable on the expiry of the Due Diligence Period (subject to special condition 27); and
2. $2,600,000.00 payable on the expiration of 6 months from the Day of Sale;

(iii) Date for Payment of Balance: the date that is 12 months after the Day of Sale or by earlier by agreement.

(b) the 2006 Vendor's Statement duly executed by Mr Hamilton on behalf of SFPL, which also contained:

(i) a copy of the HOA; and

(ii) wording at Clause 2.1(d) which expressly referred to the inclusion of the HOA dated 19 December 1986.

Particulars

The defendants refer to and rely upon para 6l above.

12 Paragraph 46 relies upon paragraphs 39 to 41, which provide:

1. By letter dated 11 July 2006, from Fridcorp to T&C on behalf of SFPL, Fridcorp revised its offer to purchase the Property and stated:

"Purchase Price: $26,000,000.00 plus any applicable GST

Deposit: 10% upon signing of Contract of Sale. A further 10% by way of Bank Guarantee after 6 months payable

Settlement: 12 months from signing of Contract of Sale"

Particulars

The letter dated 11 July 2006 was faxed by Fridcorp to T&C on or about 14 July 2006.

1. By letter dated 17 July 2006, from Fridcorp to T&C, Fridcorp stated:

"Further to our recent discussions and previous offer for the above-mentioned property, we confirm that our lawyers have now received the draft copies of the contracts. We are prepared to enter into the due diligence period on the following terms:

Purchase Price: $26,000,000.00 plus any applicable GST

Deposit: 10% upon signing of Contract of Sale. A further 10% by way of Bank Guarantee after 6 months payable

Settlement:12 months from signing of Contract of Sale"

(Fridcorp Offer).

Particulars

The letter dated 17 July 2006 was faxed by Fridcorp to T&C on or about 17 July 2006.

1. On 19 July 2006, SFPL instructed its agent and solicitors Minter Ellison to send the following letter to Fridcorp, and Minter Ellison did so:

"We refer to your fax of 17 July 2006 to the selling agent. We are instructed that the price, deposit arrangements and proposed settlement date are acceptable to our client".

Particulars

The defendants refer to and rely upon a letter dated 17 July 2006 from Minter Ellison to Paul Fridman at Fridcorp sent by facsimile which named Mr Leo Hennessy as the contact and Mr McCallum as the responsible partner.

13 Streicholz submitted that the 7 July Terms were simply a draft contract, never 'accepted' by any 'proposed purchaser or transferee'. Streicholz also submitted that the 'ongoing discussions' of the 'Fridcorp Terms' never progressed beyond, at best, an agreement to enter into a due diligence process (see exhibit VON-1 at 11 to 16). Streicholz submitted that upon a proper construction the reference in the Second FROR to 'the same terms as each proposed purchaser or transferee' is a reference to the 'final terms' agreed, but not executed, by Streicholz and a proposed purchaser.

14 I am not satisfied that Mr Taylor has no real prospect of establishing that the circumstances alleged in paragraph 38 and also, in the alternative, the circumstances in paragraphs 39 to 41, of the proposed pleading triggered the Second FROR.

15 First, the Second FROR does not expressly require that it is triggered only upon the terms being acceptable to the proposed purchaser or 'final terms' agreed between Streicholz and a proposed purchaser. That is, as submitted by Streicholz, 'a final document that the parties are ready to sign'.

16 Second, there are already substantial disputes between the parties concerning the proper construction of the Heads of Agreement, including its terms and effect. As a result, the proper construction of the Heads of Agreement, including the meaning and effect of the Second FROR, is properly a matter to be determined at trial having regard to all of the circumstances. I refer to the following substantial disputes concerning the Heads of Agreement:

(a) Streicholz pleads an implied term (paragraph 8A(c)(ix) of the second further amended statement of claim) that is denied by the Taylor parties (paragraph 8(d) of the third further amended defence and counterclaim). This was also the subject of Streicholz Fabrik Pty Ltd v Taylor [2023] VSC 240;

(b) the Taylor parties plead that by the Heads of Agreement the parties agreed to the purchase by Streicholz and Headland Properties Pty Ltd from Bryant & May Pty Ltd of the Property (paragraph 5(i) of the of third further amended defence and counterclaim) that is denied by Streicholz (paragraph 2(h)(ii) of the further amended reply and defence to counterclaim); and

(c) the Taylor parties plead that the Second FROR confirmed and/or acknowledged and/or novated the First FROR and clarified that the first right of refusal resided with Taylor and/or his nominee/s (paragraph 5(k) of the of third further amended defence and counterclaim) that is denied by Streicholz (paragraph 2(h)(ii) of the further amended reply and defence to counterclaim).

17 All issues concerning the disputed terms and effect of the Heads of Agreement should be determined at the same time and at the trial. This is because, in my view, it is not appropriate to determine the proper construction of the Second FROR in the Heads of Agreement in circumstances where there are other substantial disputes concerning the Heads of Agreement, including as to an implied term and also as to the commercial purpose and object of the Heads of Agreement.

18 Third, in the event that upon proper construction the Second FROR does not require that there be final terms agreed, but not executed, by Streicholz and a proposed purchaser, then there are real prospects of Mr Taylor establishing that the facts alleged in those paragraphs constituted circumstances in which:

(a) the Property was for 'sale or transfer' within the meaning of the Second FROR as the circumstances alleged concern Streicholz engaging with a potential purchaser of the Property to sell the Property;

(b) there were 'terms' concerning a 'proposed purchaser' of the Property within the meaning of the Second FROR as there were terms, including a draft contract of sale with details concerning price, a deposit and settlement, proposed by Streicholz to the potential purchaser (paragraph 38) and, as pleaded in the alternative, Streicholz communicated to the potential purchaser that terms concerning price, deposit and settlement were acceptable to it (paragraphs 39 to 41); and

(c) but the determination of these issues will depend upon an examination of all of the circumstances concerning the negotiations conducted between Minter Ellison, on behalf of Streicholz and Fridcorp Projects Pty Ltd, which are also matters to be properly determined at trial. As submitted by Streicholz '[the Court] will also need to see how [the terms of the Second FROR] apply to the particular circumstances'.

1. Third, even if ... there was a "trigger" in respect of ... the Second FROR, an option is only capable of exercise within a "reasonable time". What time is reasonable is a question of fact requiring consideration of all of the circumstances of the case. Here (noting it is not possible for Mr Hamilton to give evidence on this subject), a "reasonable time" must be a period that is roughly contemporaneous with the time expected for the sale giving rise to any trigger (so as not to prejudice that sale), and a period short enough that the value of the land is not "affected by the changing conditions which time and the vicissitudes of business bring". On any view, the option must have ceased to be exercisable by now, years after the supposed "trigger".

1. Further, the question of a "reasonable time" within which the option should be exercised will be assessed by reference to what was known (or perhaps should have been known) by Mr Taylor, as the person who had the opportunity to exercise the option. His evidence will be that he did not know of the facts sufficient to enable him to even assert the existence of the option until at least May/June 2024, and that the documents were not discovered for the purpose of undertaking an assessment as to whether the [FROR] had been triggered.

21 I am not satisfied that Mr Taylor has no reasonable prospects of establishing that the option is still exercisable, some 19 years after the 'trigger'. This is because, as submitted by both the Taylor parties and Streicholz, what is a reasonable time is a question of fact requiring consideration of all of the circumstances of the case. This is properly a matter to be determined having regard to all of the circumstances at trial. For example, it may be relevant that Mr Taylor did not know of the 'trigger' until much later. Upon Mr Taylor's submissions this was in May/June 2024, it may have been earlier (i.e. late 2023 or some other time).

1. Fourth, the relief is framed in respect of paragraphs 49 to 54 as an order compelling SFPL to offer the relevant land for sale, or specific performance of the contract arising on Taylor's exercise of the option, or equitable damages. Equitable remedies may be refused on the basis of acquiescence, or laches, or the application of a limitation period by analogy. The failure to bring the case promptly has obviously disadvantaged the plaintiffs, given the death of Mr Hamilton.

23 The Taylor parties submitted this is a matter to be determined at a trial having regard to all of the circumstances. I am not satisfied that the equitable remedies have no real prospects of success as the result of a 'disadvantage' that Streicholz may suffer. Again, this is properly a matter to be determined at trial having regard to all of the circumstances. For example, the precise 'disadvantage' would need to be the subject of identification and then determined in all of the relevant circumstances.

24 As a result I am not satisfied that the claims concerning the Second FROR have no real prospects of success.

25 I have decided that I am not satisfied that the impugned claims are untenable. The question then is: what do the interests of justice dictate? It is important to identify and address the relevant factors that inform the exercise of discretion in this case.

26 This proceeding was commenced on 1 March 2022. The proceeding concerns critical events as early as 1986. The trial set down on 10 February 2025 was vacated by consent due to the ill health of Mr Hamilton, who has since died.

27 Ms Norbury, the Taylor parties' solicitor, gave evidence as follows (affidavit made 28 February 2025):

1. I am informed by Mr Taylor and believe that he did not know or ascertain the extent of the negotiations until the return of documents produced on subpoena by Fridcorp, Teska & Carson and by the plaintiffs pursuant to the orders for discovery in late 2023.

...

1. Following the mediation between the parties conducted on 11 February 2025, I considered it advisable for MR Taylor to articulate his claim against SFPL arising from the matters set out in paragraphs 17 to 27 above.
2. Following production of the documents by the Plaintiffs in or around November 2023, the defendants issued a number of subpoenas for forensic purposes. One purpose was to obtain agreements (including Contracts of Sale or Vendor Statements) regarding the plaintiffs and the Property. Documents were produced in or around May and June 2024. Accordingly, at the time of preparing the defendants' third further amended defence and further amended counterclaim on 14 February 2024, the defendants were not in a position to address the proposed new cause of action.

28 Ms Norbury also gave evidence as follows (affidavit made 2 April 2025):

1. I refer to paragraph [25] of my affidavit sworn 28 February 2025. It contains a typographical error. Further, the paragraph requires clarification regarding the timing of documents produced under subpoena; a matter which was addressed at paragraph [30] of my affidavit.
2. I am informed by Mr Taylor and believe that he did not know or ascertain the extent of negotiations until the return of documents produced under subpoena by Fridcorp and Teska & Carson in May/June 2024, and by the Plaintiffs pursuant to the orders for discovery in late 2023.

...

1. The Amended Pleading has been prepared by counsel following senior counsel's re-engagement as senior counsel following the appointment of our clients' previous senior counsel as a judge.

29 I also refer to the proposed amended counterclaim at paragraph 48:

1. Neither in July/August 2006 nor at any other time did SFPL offer to Taylor and/or his nominee/s the right to acquire the Property on the 7 July Terms or the Fridman Terms.

(a) The draft contract and 2006 Vendor's Statement were disclosed by Minter Ellison on behalf of the plaintiffs to Taylor in 2022 in this proceeding;

(b) On 6 October 2023, the Honourable Justice Attiwill made orders, inter alia, requiring the parties to make discovery of documents by 27 October 2023;

(c) Pursuant to the orders made on 6 October 2023, Mr Hamilton swore an affidavit of documents on 27 October 2023 which disclosed the documents referred to in paragraphs 36, 39, 40, 41, 43 and 44 namely, the terms agreed between SFPL and Fridcorp.

(d) The plaintiffs have never provided notice to Taylor (and or his nominee/s) of the Sale Resolution or of his right to acquire the Property on either the 7 July Terms or the Fridman Terms.

30 Mr Fragos also gave evidence. He is the Taylor parties' solicitor and the special counsel. He gave evidence that he has the care and conduct of the matter on behalf of the Taylor parties. He reviewed the discovery in November 2023 and he was the person instructed by the Taylor parties to brief counsel in August 2024, November 2024 and December 2024.

1. At [34] to [54] new, but factually related, causes of action are pleaded relating to matters which arose in 2006, but were never notified to Mr Taylor by the plaintiffs. Whilst some documents were received pursuant to discovery orders made in this proceeding by his Honour Justice Attiwill on 6 October 2023 it was only after receiving documents produced under subpoena in May/ June 2024 by Fridcorp and Teska & Carson that the defendants were in a position to discover that, as they allege in summary, a triggering event in respect of the ... Second FROR had occurred.

32 Counsel for the Taylor parties also submitted during the hearing on 11 April 2025:

MR EVANS: I'll just use a hypothetical because - and I'll use a hypothetical which I know may be true as opposed to something else, but let's say in December 2024, Mr Taylor became aware of the existence of this counterclaim and he says, I won't make the application because, given the proximity of the trial date and the history of this proceeding, I don't think it'll be allowed.

HIS HONOUR: I've got a black hole.

MR EVANS: I should apologise, Your Honour. What I can say, perhaps in relation to that - - -

HIS HONOUR: Yes.

MR EVANS: You identified that the statement, starting at the fifth line of paragraph 2 of our reply submissions, isn't made good on the evidence, namely - - -

HIS HONOUR: Yes.

MR EVANS: - - - further it was only upon the engagement - - -

HIS HONOUR: Yes.

MR EVANS: - - - of new counsel in - - -

HIS HONOUR: No, I was asking you - - -

MR EVANS: - - - December 2024.

HIS HONOUR: - - - if there is evidence of that.

MR EVANS: And I had to respond because there isn't because we've only got the two affidavits.

HIS HONOUR: Yes.

MR EVANS: But I could give you an undertaking that we would provide that evidence, because it would be true. If that was a matter that was of sufficiently agitating Your Honour, there's no reason why I shouldn't be - - -

HIS HONOUR: Well - - -

MR EVANS: - - - entitled to do that.

(emphasis added)

33 Despite this matter being adjourned on 11 April 2025 and the Court describing the lack of evidence on this matter as a 'black hole', the Taylor parties have not provided any evidence that supports the submission made by counsel. Counsel at the further hearing on 30 May 2025 stated that his statement was based upon a 'misapprehension'. This is unsatisfactory.

34 The Taylor parties have failed to provide an adequate explanation for delay. Moreover, the lateness of this amendment lies at the feet of the Taylor parties and/or their solicitors and no-one else.

35 First, I find that the application for leave to amend could have been made by late 2023. I refer to paragraph 48 of the proposed amended defence. This discloses that the Taylor parties rely upon documents discovered in October 2023 and then produced to the defendants on 9 November 2023.

36 Second, despite having access to the documents relevant to this proposed new claims on and from 15 November 2023, Mr Fragos gave evidence that Mr Taylor did not see or review the documents at any time prior to February 2025. No explanation has been provided why he did not see or review these documents. But this evidence is also materially inconsistent with Ms Norbury's evidence that 'Mr Taylor did not know or ascertain the extent of the negotiations until the return of the documents produced under subpoena by Fridcorp and Teska & Carson in May/June 2024 and the Plaintiff's pursuant to the orders for discovery in late 2023' (emphasis added) (affidavit made 2 April 2025, [4]). The evidence of Ms Norbury supports a finding that Mr Taylor did know and ascertain the extent of the negotiations by May/June 2024. This evidence is materially inconsistent with the evidence of Mr Fragos that Mr Taylor did not access the documents prior to February 2025. This is, again, unsatisfactory.

37 Third, the Taylor parties' solicitors did not brief the documents relevant to the proposed new claims to Mr North KC despite him being retained from the time the relevant documents were produced on 9 November 2023 to about August 2024 when new counsel were retained. No explanation has been provided why he was not briefed with these documents. During this period he was asked to advise upon and settle pleadings. This is unsatisfactory.

38 Fourth, the Taylor parties' solicitors did not brief the documents relevant to this proposed claim to Mr Evans KC when he was retained in August 2024 or Mr Salpigtidis when he was briefed again in November 2024. No explanation has been provided why they were not briefed with these documents. This is unsatisfactory.

39 Fifth, the Taylor parties' solicitors did not brief the documents relevant to the proposed claim to Mr Fary SC when he was retained in December 2024. No explanation has been provided why he was not briefed with these documents. This is unsatisfactory.

40 Sixth, no adequate explanation has been provided why, only after the vacation of the trial and the unsuccessful mediation in February 2025, were Mr Fary SC and Mr Salpigtidis briefed with the relevant documents and requested to consider the same for the purposes of considering any 'presently un-pleaded cause of action which may exist'. Counsel then gave advice as to the possible existence of a cause of action. Mr Fragos gave evidence (affidavit made 15 April 2025):

1. There was no identification by either Mr Taylor or any lawyer on behalf of the plaintiffs by counterclaim of any cause of action based on the documents relating to the Fridcorp 2006 transaction prior to mid-February 2025. There was no forensic decision by any person at any time not to pursue any cause of action based on those documents.

41 It appears that, upon Mr Fragos' evidence, an unnamed lawyer or lawyers identified the proposed claim in about February 2025. But Ms Norbury gave direct evidence that following the mediation she considered it 'advisable for Mr Taylor to articulate the claim against [the first plaintiff] arising from the matters set out in paragraphs 17 to 27 above [i.e. the proposed claim]' (emphasis added). Ms Norbury does not explain when she identified the claim or how she identified it.

42 Mr Evans KC was not briefed with the relevant documents until March 2025. He then gave advice as to the possible existence of a cause of action.

43 These matters are a significant factor against the grant of leave. The conduct of the Taylor parties' solicitors has been unsatisfactory, both in briefing counsel and also in their explanations to the Court of the delay. The explanations are vague, ambiguous, incomplete and contradictory.

44 I accept that Streicholz is likely to incur further time and costs if leave is granted that could have been avoided if the claims were made earlier (e.g. when the Taylor parties filed an amended pleading in February 2024). In addition, if leave is granted this will further delay the hearing and determination of this proceeding. This is factor against the grant of leave.

1. Irreparable element of unfair prejudice. There is an irreparable element of unfair prejudice if leave is granted. As the Court is aware, the second plaintiff and the plaintiffs' only witness at trial, Mr Hamilton, died on 3 March 2025. Mr Hamilton was a party to the Heads of Agreement and also, in 2006, the controlling mind of SFPL. Indeed, it is an admitted fact in this proceeding that Mr Hamilton was at all times between about 1986 and 1 March 2023 the controlling mind and will of SFPL. If the proposed amendments were made earlier, the plaintiffs' legal representatives would have sought instructions from Mr Hamilton as to the circumstances of the matters that are alleged to have occurred in 2006, including any communications that are not stated in the pleading (noting the case is put in a way that relies on SFPL's "intention" to sell). Those instructions would also be necessary to determine what a reasonable time for exercise of any option might have been in the circumstances alleged. It is impossible for those instructions to be sought. SFPL cannot fairly respond to the allegations, and the Court is deprived of the benefit of Mr Hamilton's evidence.

46 I am not satisfied that if leave is granted Streicholz will suffer irreparable prejudice. I accept that if the application for leave was made earlier then Streicholz' solicitors could have sought instructions from Mr Hamilton, including upon any communications in 2006 that are not the subject of the proposed amendments. But this does not mean that I am satisfied that it will suffer irreparable prejudice.

47 First, Mr Hamilton has already provided at least some instructions concerning the circumstances of the matters that are alleged to have occurred in 2006. I refer to the following:

(a) Mr Hamilton discovered documents the subject of the proposed claim and produced them for inspection on 9 November 2023, including, but not limited to, the critical documents relied upon in paragraphs 38 and 41 of the proposed counterclaim. I refer to his affidavit of documents made 27 October 2023;

(b) Mr Hamilton filed his witness statement, prior to discovery, on 14 April 2022 in which he specifically addressed some matters concerning the events the subject of the proposed claims:

1. I recall that at some point in 2006 and again in 2008, I had some informal discussions with my property managers about selling the Property. These discussions were prompted by my property managers at the time, variously JLL, TeskaCarson and later, Alexander Robertson.
2. In 2006 and 2008, MinterEllison were my conveyancers, with Don MacCallum (a Partner who has since retired) my primary contact. In 2006, I recall being concerned about the status of Russell Street in the context of any sale. Since acquiring the Property, I and the owners from time to time of the Adjoining Property have used Russell Street as a carriageway to access both the Property and the Adjoining Property from both Church Street and Chestnut Street. This is the case despite the fact that I only own the northern "half" of Russell Street and the owner of the Adjoining Property only owns the southern "half" of Russell Street. However, this established use of Russell Street was not formally recognised and I was concerned that a prospective purchaser may consider this to be a problem. I recall that in order to overcome this, a plan of creation of an easement was drawn up which would be presented to a potential purchaser as a way of formalising the use of Russell Street.
3. In this context, I have been shown a vendors statement that was prepared by MinterEllison in 2006 which was provided to a representative of Fridcorp (a prospective purchaser at that time) in 2006. The vendors statement contains a plan of creation of this easement which is consistent with my recollection as to how the issue was to be addressed. I also note that the vendors statement makes reference to the Heads of Agreement in clause 2.1(d) and encloses a copy of the Heads of Agreement. I have no recollection as to why this is the case, although I did not regard that document as giving rise to any binding obligations in connection with my attempt to sell the Property.

(c) it may be inferred that Streicholz' solicitors have already sought instructions from Mr Hamilton about at least some of the circumstances of the matters that are alleged to have occurred in 2006. Streicholz' solicitors have not provided any explanation why their previous instructions on these matters are not adequate to respond to the present claims.

48 Second, there other potential sources of instructions and information on the matters the subject of the impugned amendments:

(a) at the relevant time, in 2006, Mr Hamilton was not the only director of Streicholz. He may have been the 'controlling mind' but Ms Lorna Hamilton was also a director. There is no evidence that Streicholz has made any inquiries of her in relation to the matters the subject of the impugned amendments;

(b) further, at the relevant time, in 2006, the solicitors acting for Streicholz in relation to the transactions the subject of the impugned transactions was a Mr MacCullum, a partner of Minter Ellison and also a Mr Leo Hennessy. See, for example, the letter from Minter Ellison to Fridcorp Projects Pty Ltd dated 19 July 2006. There is no evidence that Streicholz has made any inquiries of them in relation to the matters the subject of the impugned amendments; and

(c) finally, Streicholz submitted that, if leave is granted, then they may need to have subpoenas issued to 'fill gaps in the absence of Mr Hamilton's capacity to give direct evidence about a number of matters.'

49 Third, I am not satisfied that instructions of Mr Hamilton would be necessary to determine what a reasonable time for the exercise of any option might have been. The issue of what is a reasonable time is to be determined objectively in the circumstances. Streicholz did not identify why instructions of Mr Hamilton would be necessary to determine that issue. This submission was not further developed during the hearing.

50 As a result, I am not satisfied that Streicholz will suffer irreparable prejudice if leave is granted.

51 Given I have found that I am not satisfied that the claims concerning the Second FROR do not have real prospects of success, refusing leave to amend will cause prejudice to Mr Taylor as he will not be able to rely upon the proposed new claim. This is a significant factor in favour of the grant of leave.

52 This proceeding is in the Commercial Court (Commercial List) and is being managed by me. Efficient and effective case management is critical to the administration of justice. I adopt the following submissions of Streicholz on this issue:

1. ... The parties have filed written opening submissions. The trial did not proceed in February 2025 due to Mr Hamilton's deteriorating health. Prior to trial, the parties appeared before the Court on 4 October 2024 to deal with (among other things) the delay by the defendants in filing their opening submissions. At that directions hearing, Justice Attiwill observed that the proceeding was listed for trial in February 2025 and that there was no suggestion of "any further applications or pleading amendments".[3] Senior Counsel for the defendants did not foreshadow the applications that have now been made - indeed, the only potential issue that was raised by the defendants' Senior Counsel was expressed as not concerned with "pleadings and it is not anything to do with that". [4]
2. It is inevitable that permitting these amendments will further delay the resolution of this matter, because the plaintiffs will have to file responsive pleadings, and prepare evidence. There is likely to be another round of discovery and potentially subpoenas. Further opening submissions will be necessary. It is difficult to see the matter being ready for trial any earlier than the final quarter of 2025, if the Court can accommodate it.

53 Moreover these matters must be further considered in light of there being no adequate explanation for delay in making this application to amend. I find that it could have been made by late 2023, or alternatively (and as accepted by the defendants) by May/June 2024. This is a significant factor against the grant of leave.

54 The application has been made after all of the interlocutory steps have been completed and only after the trial had been vacated. This is a factor against the grant of leave. But trial has been vacated and no new trial date has been set. During the hearing the Court informed the parties that the Court could accommodate a trial commencing on 21 July 2025 and asked the parties whether they were ready to proceed on that day in the absence of leave being given to amend. Streicholz' counsel informed the Court that Streicholz did not wish to proceed on that day as its counsel were not available. As a result, it is likely that if leave is granted, the parties will have sufficient time to address the issues that arise upon the amendments. This is a factor in favour of the grant of leave. I note that in the event that Streicholz was ready to proceed on 21 July 2025, this would have been a very significant factor against the grant of leave.

55 All of the interlocutory steps have been completed. None of them addressed the proposed claims. In the event I grant leave, there would likely be significant wasted costs as further costs would have to be incurred in further pleadings, outlines and possibly further discovery and subpoenas. This is a significant factor against the grant of leave.

56 I refer to the matters I have addressed concerning explanation for delay, case management and wasted costs. In the event I grant leave, there will likely be some further delay in this proceeding being heard and determined. But if I refuse leave, Mr Taylor would not be able to rely upon the proposed claims and, as a result, not all matters that he wishes to raise will be heard and determined at a trial. As a result, granting or refusing leave has the prospect of weakening, at least to some degree, confidence in the judicial system. In my view, it will be more weakened if I refuse leave in the present circumstances.

57 I have decided to exercise my discretion, having regard to all of the circumstances, and give leave to amend. This is because:

(a) Mr Taylor will be significantly prejudiced if I refuse leave;

(b) the trial of this matter will now not be for some time as the Court will need to allocate a new trial date accommodating a trial of 2 weeks. Streicholz said that it was not ready to proceed on 21 July 2025 even if the application for leave was refused;

(c) I am not satisfied that Streicholz will suffer irreparable prejudice; and

(d) although I am very concerned about the inadequate explanation for the delay and the wasted costs, these matters do not outweigh the significant prejudice to Mr Taylor if I refuse leave.

58 In conclusion, I will give leave to make the impugned amendments to the counterclaim. As a result, I will order that by 4.00pm on 10 June 2025 the Taylor parties have leave to file and serve a fourth further amended defence and second further amended counterclaim in the form of provided to Chambers and the parties on 29 May 2025.

59 I will hear the parties on the issue of costs but my preliminary view is that the Taylor parties should pay Streicholz' costs of and occasioned by the amendment but the costs of the Taylor parties' summons filed 3 April 2025 are otherwise the parties' costs in the proceeding. Mr Taylor abandoned the proposed amended plea concerning claims based upon the First FROR only on 28 May 2025 (and provided a further proposed pleading on 29 May 2025) but the costs incurred in relation to that are unlikely to be significant in the circumstances. I have also already made a costs order in relation to the costs on 11 April 2025. But I will hear from the parties on the question of costs if they wish to address the issue.

[1] [2021] VSCA 267, [75]-[76] (footnotes omitted) (Maxwell P, Kennedy and Walker JA).

[2] [2015] VSCA 172, [22] (Kyrou and McLeish JJA).

[3] Transcript of hearing on 4 October 2024, page 2, line 18-21.

[4] Transcript of hearing on 4 October 2024, page 4, line 2-3.