REASONS FOR JUDGMENT
1 In late July 2014, this proceeding was listed for hearing commencing on 23 March 2015 on an estimate of six days. On 3 December 2014, the first and second respondents ("Genesis" and "Bain") applied pursuant to r 16.53 of the Federal Court Rules 2011 (Cth) ("the Rules") for leave:
(a) to amend their defences in the form of a proposed joint further amended defence; and
(b) to file and serve a joint amended cross claim against the third applicant ("GFC") and the third to sixth respondents ("the Vendors").
2 The application came on for hearing on 5 December 2014. On that day, leave was granted to Genesis and Bain to make some of the proposed amendments. The Court stood over for further argument proposed amendments which contain new alternative claims by Genesis and Bain against GFC by way of defence and cross claim. Mr McTaggart, who appeared for the applicants, opposed the proposed amendments, contending that they are futile, that no proper explanation has been given for the delay in advancing the new claims and, given the proximity of the trial, that the applicants would suffer serious prejudice if the amendments were allowed.
3 It is necessary to give some background in order to understand the alternative claims that Genesis and Bain seek to advance against GFC.
4 In September 2010, the first and second applicants ("the Purchasers") purchased the shares in GFC from the Vendors and became the directors of GFC, replacing the third respondent ("Guirguis"), who had been GFC's sole director. GFC, at the time of the share purchase, conducted a business under a franchise agreement with Genesis at premises leased by Genesis which it subleased to GFC. Bain was an employee of Genesis at the time. The applicants seek damages from the respondents arising from an alleged contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the TPA"). Central to the claim is the allegation that the respondents, through Bain, made false and misleading representations, concerning the business carried on by GFC. It is alleged that the Purchasers, in reliance upon the representations, were induced to purchase the shares in GFC from the Vendors. The applicants also allege negligence against Bain and Genesis, breaches of the Franchising Code by Genesis, unconscionable conduct by Bain, Genesis, Guirguis and/or the fourth respondent, and have made a restitution claim.
5 Genesis filed a defence in which it alleged, amongst other things, that Bain was not authorised to make, and was acting outside the scope of his employment in making, the representations on behalf of Genesis and that any representations made by Bain were not as agent for Genesis. The defence also relevantly alleged that to the extent that Bain was acting within the scope of his employment, Genesis (through Bain) was acting as agent for the Vendors in the negotiations and that any information provided by Genesis (through Bain) was originally generated by the Vendors. It was alleged that by reason of those matters any wrongful conduct of Genesis (through Bain) concerning the sale of the business is conduct that should be attributed solely to Bain and the Vendors.
6 Bain (who was then separately represented) also filed a defence in which he alleged that he was acting in his capacity as an employee of Genesis at all material times, and that Genesis was the agent of the Vendors. He alleged alternatively that to the extent that he was not acting in his capacity as an employee of Genesis, he was acting as the agent of the Vendors at all material times.
7 Genesis and Bain each alleged in their defences that the claims of the applicants are "apportionable" within the meaning of Part 9A of the Civil Liability Act 2002 (Tas) and for the purposes of s 87CB and 87CD of the TPA. They also filed cross claims against each other and the Vendors.
8 On 25 July 2014, the applicants filed an amended statement of claim ("ASOC") with the leave of the Court. The amendments relevantly included the new allegations that:
(a) all relevant representations made by Bain were made by him in his capacity as an employee of Genesis, further and alternatively that Genesis held Bain out as a person authorised by it to negotiate and make representations on its behalf to the applicants in relation to the business; and
(b) when the respondents made the representations "they were reckless as to their truth".
9 Genesis filed an amended defence to the ASOC. Bain did not. Bain, at that time, was not legally represented.
10 On 6 November 2014, HWL Ebsworth Lawyers, which hitherto had acted only for Genesis, also commenced acting for Bain. Also on that date, Genesis and Bain discontinued their cross claims against each other, and shortly after the proposed joint amended defence and cross claim against GFC and the Vendors were served on the other parties to the proceeding.
11 Relevantly, in the proposed joint amended defence:
(a) Genesis and Bain now admit that Bain was at all relevant times during his dealings with the applicants, acting in his capacity as an employee of Genesis and/or as an agent for Genesis; and
(b) Genesis and Bain say further that in any negotiations between the Vendors and the Purchasers, Genesis (through Bain) was acting as agent for the Vendors and/or for GFC.
12 Relevantly, in the proposed joint amended cross claim it is alleged that:
(a) Bain was acting in his capacity as an employee of Genesis and as an agent for Genesis in any negotiations between the Vendors and the Purchasers concerning any sale of any interest in the business;
(b) if Genesis or Bain are liable to the applicants, Genesis (through Bain) was acting in such negotiations as agent for the Vendors and/or for GFC (para 11(c));
(c) any information provided by Genesis (through Bain) to the Purchasers concerning the business was provided by the vendors and/or GFC (para 11(d)); and
(d) by reason of the matters in para 11(c) and (d), the Vendors and/or GFC must indemnify Genesis and Bain to the extent that they are found liable to the applicants for misleading and deceptive conduct ("the indemnity claim").
13 The particulars supporting the allegation that Genesis was acting as agent for the Vendors and/or GFC plead that the information contained in the emails that Bain provided to the applicants in the course of the negotiations:
... was based upon information prepared by Guirguis (the then sole director of [GFC]) and provided to the Purchasers by Bain with the consent and approval of Guirguis (in her capacity as sole director of [GFC]).
14 The particulars also state that:
The consent and approval of Guirguis (in her capacity as sole director of [GFC]) to the provision of that information by Bain to the Purchasers is evidenced by and to be inferred from the contents of the following communications between Bain and Guirguis:
[the relevant documents are then listed]
15 It is further alleged in relation to each of the specific representations alleged by the applicants that if Genesis or Bain are liable to the applicants for contravention of s 52 of the TPA, the information was provided to Genesis (through Bain) by GFC, that Genesis and Bain relied on the accuracy and reasonableness of that information in sending the emails to the Purchasers and they have suffered loss and damages and seek an order under s 82 of the TPA ("the damages claim").