Prejudice
27 As already indicated, the defendants' submissions addressed the question of prejudice to the defendants unless an appropriate accommodation was given in terms of time both by way of a necessary, in the first instance, 12 week hiatus in the hearing and otherwise as might be appropriate.
28 It seems to me important to recognise that as long ago as the occasion when the defendants were served with Mr Martin's Report of 10 July 2000, they would clearly have seen that he had been asked:
(a) to provide his expert opinion on the question of whether the Ausmaq Service as it existed in the Ausmaq System at material dates could have been enhanced, modified or added to, if necessary, so that any or all of the four identified NAB services had similar or equivalent functionality to the Ausmaq Service [paragraph 5.1.1 of letter sent by the plaintiffs' solicitors to Mr Martin of 10 July 2000]
(b) for the purposes of his report, to make assumptions that in relation to the proposed enhancement, modification and additions to the Ausmaq Service referred to in paragraph 5.1.1 that:
(i) there would be sufficient corporate will from the NAB to cause such enhancements, modifications or additions to be made;
(ii) all adequate resources in terms of staffing, funding for external consultants and computing services and equipment would be made available;
(iii) a person was in charge of the project who, to the extent that it could be technically achieved, had as an objective, the enhancement, modification or addition to the Ausmaq Service so as to have similar or equivalent functionality to the four NAB services referred to in paragraphs 5.1.1.
29 Mr Lovell accepted under cross-examination that when he read the assumptions given to Mr Martin for the purposes of his report, he had realised :
(a) that Mr Martin was asked to make certain assumptions as to adequate resources in terms of staffing funding for external consultants and computing services and equipment. [Transcript 10402].
(b) that the statement itself, other than through the assumptions, did not deal with those matters [Transcript 10403]
30 Mr Lovell gave evidence as follows:
"Q: It was clear to you, was it not, from the service of Mr Martin's statement dated 10 July 2000, that that statement dealt with technical matters relating to the four Bank services and AUSMAQ?
A: It certainly was apparent when I read it that it dealt with technical matters. I didn't see it as going to any issue as pleaded, and I can certainly say when I read it I immediately was - what sprung to mind was what Mr Garnsey had said before the Court of Appeal that the - what was being put by the plaintiffs had nothing to do with ATM machines, and telephone banking, and there seemed to be a step right away from what Mr Garnsey had said back in February 2000 before the Court of Appeal. I must admit I was puzzled by it."
31 It is equally clear that for some considerable time now the plaintiffs have sought to mobilise evidence going to whether Ausmaq could have been enhanced, modified or added to, so as to have virtually the same or equivalent functionality to the NAB Services. It is also quite clear that the statements of Professor Thomas and Mr Hodgkinson consider in detail, aspects of the Ausmaq service and consider whether the Ausmaq Service had limitations of a technical nature and consider issues such as scalability.
32 The focus of many of the factual issues currently being litigated on the present pleadings goes to precisely what was the functionality of the Ausmaq Service at the date of the Consulting and Restructuring Agreements and at the date of completion of those agreements. The examination of the factual issues relevant to issues which are raised on the present pleadings extends to such an extent into the actual or potential functionality of the Ausmaq Service, and into the circumstances and period of time in which the Bank Services were developed and came into existence and embraces so many other matters germane to be treated with as part of the contractual obligation now sought to be pursued under cover of paragraph 18.8, that, to my mind, the plaintiffs ought be permitted to pursue the alleged implied term if any potential prejudice to the defendants is capable of being accommodated by appropriate case management directions.
33 One of the most important of the many factors to be taken into account in determining the application for leave to amend concerns the extent to which the issues of fact raised by the proposed amendments are already in some form or other, the subject of very close consideration and treatment in the statements filed by the parties as they relate to the issues which were perceived to be the pleaded issues or to be raised by the pleaded issues, at the time of filing the statements. Clearly the defendants must have had in mind at least for some considerable time now, the possibility that the plaintiffs would be permitted to plead that there existed a contractual obligation, the proper discharge of which would have required the taking of necessary steps by way of the modification, addition or enhancement to the Ausmaq Service, so as to result in the resultant modified, added to or enhanced Ausmaq Service then being of similar or equivalent functionality to the Bank Services [see for example the last sentence of paragraph 72 of the first tranche amendment judgement. And, note the date when the original form of the proposed fourth further amended statement of claim was served. And, note paragraph 4(2) of MFI P70 which was marked for identification on 30 August 2000 as part of the plaintiffs' opening]. Mr Martin has filed evidence to that effect. In the result, and although the subject amendments, it must be fairly acknowledged, raise a number of further issues, the fact is that the proceedings involve at their centre the Ausmaq Service as relevant to:
(1) the misrepresentational cases brought by both sets of parties in relation to the pre-contractual negotiations;
(2) the respective cases concerning the proper construction of the contract;
(3) the respective cases concerning the manner in which the Ausmaq Service was in fact modified, added to or enhanced following the entry into of the Consulting Agreement and Restructuring Agreement;
(4) the respective cases concerning the business plans including the sections of relevant such plans dealing with proposed enhancements, modifications &c.; and
(5) the plaintiffs' case in terms of damages/loss of opportunities.
34 It is common ground that questions concerning the Business Plans and particularly the 1997 Business Plan are raised by the current pleadings (see also the judgment allowing additional amendments in this area on the second tranche amendments [2001] NSWSC 328). To the extent that the plaintiffs' cases allege a failure by the corporate defendants, NMG and NAB, to take proper steps by way of putting into place actions to implement the JMG Business Plans, which failure is said to constitute relevant breaches of certain terms of the Consulting Agreement, it is common ground that a number of questions concerning the failure to pursue/viability of particular suggested enhancements &c. are currently being litigated in relation, for example, to the issue concerning the failure of the relevant corporate defendants to approve scenario 2 [see the discussion dealing with Business Plans at paragraphs 70 and following in the judgment [2001] NSWSC 328]. Indeed Mr Bathurst at transcript 10391 accepted that the defendants could not oppose an amendment "to say as an implied term [that the defendants were obliged to] do all things reasonably enhanced (sic ) as provided for in the 1997 Business Plan…….. [as] an issue that was already there".
35 A further consideration of relevance is of course the fact that for all the apparent width of the contractual obligation sought to be propounded as an implied term by the new proposed paragraph 18.8, the particulars of breach are confined by reference to the asserted failure to take all reasonable steps "to cause the Ausmaq Service to be enhanced &c. so as to incorporate technical development for a functionality of similar or equivalent functionality to, alternatively so as to incorporate the actual technical development for the functionality of, the [Bank Services]". In the result the particulars of breach do serve to severely constrict, at least at the important level of breach, the area of factual enquiry to be litigated.
36 The proceedings are complex in the extreme. The application for leave to amend raises a number of very difficult questions as to whether and if so precisely under cover of what presently pleaded paragraphs and supporting particulars, aspects of the allegations now sought to be pursued have already been placed in issue. The Ausmaq Service value proposition clearly sits at the centre of a great deal of the evidence sought to be mobilised by both parties.
37 I am satisfied that to the extent that the application for leave to amend, if granted, would necessarily lead to the defendants having to obtain further instructions from relevant witnesses including experts, it is likely that very many of such witnesses will already have been consulted on an extensive number of matters which both parties have accepted are being litigated on the current pleadings. Insofar as the defendants may require to expand their present evidence to deal with the new amendments, the exercise, whilst complex, is so close to the heart of the matters being litigated as to make it very difficult for the court, even at this stage, to exercise its discretion by denying the plaintiffs leave to amend. The fact is that the defendants have not been able to point to any particular prejudice but rather have taken the stance that:
(1) the leave to amend is necessary as the existing pleadings do not raise the same issues;
(2) the accommodation which would be necessary to permit the defendants to fairly treat with the additional allegations, would be likely to be substantial; and
(3) there is a public interest in the finality of litigation.
38 The plaintiffs have not accepted that the issues are not open to be litigated on the present pleadings but have in any event pursued leave to amend as within the Court's discretion.
39 On the estimates from both sides of the bar table, the proceedings are due to continue for a very considerable time. As at 1 July 2001, the defendants, on Mr Lovell's evidence, will have five full-time partners working on these proceedings; a further partner having a general role; approximately 14 or 15 full time solicitors working on the proceedings; and approximately 6 to 8 paralegals working on the proceedings, it being common ground that there are three senior counsel and three junior counsel retained to conduct the proceedings as well as a further junior counsel, Dr Bell, retained in relation to the security for costs application. On anyone's terms these are massive legal resources. To my mind following the extensive openings and the many interlocutory motions and interim judgments related to the conduct of the proceedings on a wide variety of parameters, and following the taking of evidence up to this point in time, the court is in a position to assess what is appropriate in terms of being able to accommodate any suggested prejudice to the defendants by reason of the granting of the plaintiffs application to amend in the terms earlier set out.
40 During late June, and in July and August of this year there are already in place arrangements for a five week hiatus in the hearing. Two of those weeks were identified as appropriate in terms of the mediation to be conducted by Sir Anthony Mason. Mr Lovell has given evidence under cross-examination covering certain aspects of the resources of the defendants to which I do not need to refer. He accepts that his assessment of 12 weeks set out in the last sub-paragraph of his affidavit may have room for error. He accepts also that the first three weeks of the break in hearing [principally granted to permit evidence to be prepared resulting from the first round of amendments to the pleadings] will not involve all members of the defendants' legal team. He accepts also that the continued cross-examination over the next few weeks involves certain identified members of the defendants' legal team whilst other persons are responsible for other matters. Mr Ling's evidence is to follow from 16 July. Mr Sackar is to cross examine Mr Ling. Mr Lovell accepts also that the mid-August mediation will involve a more limited number of members of the defendants' legal team.
41 At the end of the day it seems to me that the defendants are not shown on the evidence to be so prejudiced by permitting the amendments as to require the application for leave to amend to be refused. The defendants should in my view be given an appropriate opportunity to come to grips with the new pleading once proper particulars are furnished. Further evidence required to be adduced by the defendants can be prepared. If it becomes necessary for the plaintiffs' witnesses, or some of them, to be recalled, that can take place.
42 It is important for the court to permit the plaintiffs the opportunity to pursue the case which they seek to pursue if this can be done within the constraints of the litigation and without any real or significant prejudice to the defendants. The defendants resources are such that I cannot accept the necessity for a hiatus of 12 weeks at this stage. The hiatus which is now to take place can certainly, to an extent, be made use of. And the balance of the hearing as it progresses towards the end of the year and across the long vacation and into next year, gives considerable leeway in terms of the defendants being able to fairly litigate any of the factual issues raised by the allegations.
43 Insofar as the Court has had to take into account the reasons for the application for leave being pursued at this point in time, I am satisfied from the general history and background that on more than one occasion, difficult questions of construction of the extant pleadings have arisen. Ultimately I doubt that the plaintiffs can make good the proposition that the issues raised by the amendments now sought to be pursued remained open on the present pleadings [cf transcript page 1678.16-.38 and 1678.55-1679.1] [But compare transcript 16605.10-.20, 1669.5-.10] and/or in any event can be said to have remained open following the plaintiffs previous decision not to pursue paragraphs 18.6 (ii) and (iii) [see transcript 6603.37-.53]. It becomes strictly unnecessary to determine that issue presently although the matter may well required to be determined at some stage in relation to costs.
44 I have of course, taken into account my knowledge of the issues and sub-issues in my assessment of the extent to which the new issues overlap with or are related to existing issues.
45 At paragraph 75 of the judgment [2001] NSWSC 142, reference was made to Part 1 of the Supreme Court Rules as modified by Amendment No 337. As there, I particularly presently take into account the overriding purpose of the Rules being to facilitate the just, quick and cheap resolution of the real issues in civil proceedings. As there, I am very clearly of the view that as a matter of case management, the appropriate course is to permit the evidence of the witnesses to proceed whilst the defendants take such instructions and steps as they may see as necessary to deal with the further amendments. As there, it seems to me that there must surely be a number of occasions when such solicitors and counsel as are retained by the defendants as may be appropriate for the exercise, are able to put into place the necessary plans to deal with any of the new issues seen as now arising. As there, and whilst I accept Mr Lovell's evidence of the need to take care in ensuring that proper investigations are put in place to treat with any of the new issues, the resources which on the evidence are being utilised by the defendants, suggest to me that the Court requires to take very special care indeed before acceding to any form of hiatus otherwise than upon a very informed basis. That basis has not yet been established on the evidence before me on this application. The position may alter. It may not. The Court will continue to case manage the ongoing hearing with an open view to protecting both parties against unfair prejudice.