REASONS FOR DECISION
1 On 31 May 2011, the Court indicated that leave would be granted in respect of certain amendments sought by the applicants to their respective statements of claim in the above proceedings. I now provide my reasons for that decision. The terms used in these reasons adopt those in the written submissions of the parties.
2 There were two main sets of amendments that the applicants sought to make. At a very general level the amendments sought are as follows, more particularly described in the written submissions of the Kirby and Stott applicants dated 16 May 2011 and 31 May 2011. The first set of proposed amendments raised an allegation that the debts associated with Super LLC should have been included as current liabilities on the balance sheets of CNP and CER because CNP and CER had control of Super LLC within the meaning of AASB 127 and s 286 and/or s 295 of the Corporations Act 2001 (Cth). The second set of proposed amendments raised an allegation that debts associated with Super LLC should have been included as current liabilities on the balance sheets of CNP and CER because notwithstanding a purported disclosure of its ability to control units held in the Centro Retail Trust, CNP actually controlled more than 50% of the units in the Centro Retail Trust. The applicants also advanced an alternative argument that CNP controlled each of DPF and DPFI notwithstanding that CNP did not have a majority interest in either fund.
3 Before leaving the description of the amendments, I mention that it was contended by the CNP respondents that the proposed amendment to the definition of JV Debt was embarrassing although during the course of the debate before the Court the applicants proposed an altered version of the definition to overcome some of the concerns of the CNP respondents. In my opinion, the definition now adopted by the applicants read in the context of the relevant paragraphs in which the definition appears (at least in the Kirby proceedings where it has been completely formulated) is no longer embarrassing. In the Vlachos proceedings, I will assume that the applicants will adopt a similar approach to that of the applicants in the Kirby proceedings.
4 It was submitted by the respondents that the amendments sought did not disclose a properly arguable case and would be liable to summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) and should not be permitted. It was also submitted the amendments should not be permitted on discretionary grounds given their lateness, the proximity to the hearing date, the fact that they require amendment to the numerous defences and cross-claims filed in the proceedings and by virtue of the fact that these difficulties are compounded where there is already extensive work to be done preparing for trial in a few months.
5 The trial for the hearing of these proceedings is set down to commence on 22 August 2011, although in the course of debate before the Court, the Court had indicated that a trial could be delayed to commence in September or October this year, so that it would be completed prior to Christmas 2011. I will return to the question of the trial date later.
6 As to whether there was a properly arguable case, it was contended by the respondents that the new allegations cannot succeed, and a number of legal and factual arguments were advanced in support of this contention. I do not find it necessary to detail the arguments advanced by the respondents. On the basis of the written submissions of the Kirby and Stott applicants, in my view, the allegations are arguable and certainly would not be dismissed as being futile or because of the operation of s 31A of the Federal Court of Australia Act 1976 (Cth).
7 In any event, where allegations (as here) involve a number of issues of law and fact, which cannot be conclusively decided by recourse only to legal argument, it is inappropriate to summarily treat such allegations as being without foundation and prevent them from being pleaded. As French CJ and Gummow J said in Spencer v Commonwealth (2010) 241 CLR 118 at paras [25] and [26]:
[25] Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.
[26] Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant (58). The importance of those considerations is amplified if the case involves resolution of issues of law and fact, or mixed law and fact.
8 The reference above to Lord Hope was to his comments in Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at para [47] where his Lordship said:
The method by which issues of fact are tried in our courts is well settled. After the normal processes of discovery and interrogatories have been completed, the parties are allowed to lead their evidence so that the trial judge can determine where the truth lies in the light of that evidence. To that rule there are some well-recognised exceptions. For example, it may be clear as a matter of law at the outset that even if a party were to succeed in proving all the facts that he offers to prove he will not be entitled to the remedy that he seeks. In that event a trial of the facts would be a waste of time and money, and it is proper that the action should be taken out of court as soon as possible. In other cases it may be possible to say with confidence before trial that the factual basis for the claim is fanciful because it is entirely without substance. It may be clear beyond question that the statement of facts is contradicted by all the documents or other material on which it is based. The simpler the case the easier it is likely to be to take that view and resort to what is properly called summary judgment. But more complex cases are unlikely to be capable of being resolved in that way without conducting a mini-trial on the documents without discovery and without oral evidence. As Lord Woolf said in Swain v Hillman, … that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all.
9 As to the issue of delay, I accept that there are certain relevant documents that were either in the public domain or have been in the possession of the applicants for some time, as submitted by the respondents. However, I do not think that it can be suggested that the applicants have been dilatory in advancing the amendments. Taking into account the nature of the dispute, the time of receipt of the documentation that has been discovered, I find that the applicants have acted conscientiously and without any inexplicable delay in bringing the amendments forward. In my view, the applicants needed to consider the documents in context and to take advice as to the proper formulation of the amendments. I do not think that there has been unreasonable delay and certainly not to a sufficient extent to be a basis for or significant factor to refuse the applications to amend.
10 Therefore, if not for a pending trial and flow-on effects following the amendments, it would be appropriate to allow the amendments.
11 It is to be recalled that the amendments relate to matters in contention already before the Court. Accepting though that the amendments will involve further investigation and a separate analysis by expert witnesses, if a trial is not conducted this year, the respondents will have time to prepare for the trial. It also seems to me that the applicants in seeking the amendments wish to agitate claims having regard to the information now available as to the possibility of recovery against only some of the respondents. Further, there is nothing to prevent another applicant in separate Part IVA proceedings seeking to vindicate claims in similar form to the amendments now sought in these proceedings.
12 The real issue is whether or not there are factors militating against the grant of leave because of the pending trial date and the prejudice to the respondents.
13 I accept that in allowing proposed amendments there will be a need for further discovery and other procedural interlocutory steps before the hearing, including the filing of amended defences and amended cross-claims and the preparation of additional expert evidence. I also accept that allowing the proposed amendments means a trial would not be able to be concluded this year. I also accept that the respondents will be subjected to various costs in defending the present allegations and that the amendments would expose the respondents to further costs which could have been avoided if the amendments had been made earlier in time.
14 The Court has a wide discretion in allowing an amendment, even an amendment which comes at the cost of vacating a trial date. The principles regarding the grant of leave to amend were enunciated by the High Court of Australia in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. Each factor to be taken into account must be considered from the point of view of doing justice between the parties according to law and consistently with s 37M of the Federal Court of Australia Act 1976 (Cth). I am mindful of a number of considerations relevant to these applications to amend. It is to be recalled that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. Further, there will be flow-on effects in terms of repleading and discovery involving time and expense.
15 Nevertheless, I came to the conclusion the amendments should be allowed accepting the matters raised were arguable and no unreasonable delay was involved.
16 An important consideration was the trial date. It is fair to conclude on the basis of the material before me and the submissions of all the parties that a trial this year was going to be difficult to achieve even without the amendments. So it seemed to me inevitable that a vacation of the trial date to next year would have been necessary on the current pleadings. The Court could accommodate a hearing next year. A trial commencing 5 March 2012 could be set down. The only real consideration against a trial next year was the unavailability of certain Senior Counsel if the matter could not be heard this year. Having regard to the fact that there are some many months away before a hearing would commence if delayed to early 2012, the availability of counsel, whilst a relevant consideration, is not a major consideration having regard to the lack of preparedness of the parties for a trial this year.
17 In view of the fact that a more appropriate trial commencement date is now 5 March 2012, there is a longer period for the respondents to prepare their cases for trial and particularly their lay and expert evidence. I am particularly mindful that sufficient time be given to PwC and PwCS to complete the various interlocutory steps that have been placed upon them by the existing timetable. This is not to say I am not mindful of the tasks still required to be taken by the other respondents.
18 As I have indicated, in allowing the amendments, additional tasks are placed on the respondents. In relation to these flow-on effects I should make some further comments. The applicants only require limited discovery. As far as discovery between the other parties is concerned the Court is in a position to manage that without there being general discovery. I do accept, however, that each party will need to make their own searches so as to properly prepare for any new allegations made against them irrespective of whether discovery is required or not.
19 However, looking at the material before the Court and the documentation that has already been provided, it would seem to me that most of the material relevant to the amendments will already have been traversed or at least the parties will know where to seek further documentation relevant to the amendments. Whilst very experienced litigation solicitors have presented evidence as to the future tasks required (including discovery), this evidence is at a generalised level and is necessarily qualified. In any event, a trial being heard next year will allow time to undertake the further tasks, although I appreciate there is always the question of extra costs. However, in the circumstances of these proceedings, I do not regard the extra costs as weighing against the appropriateness of allowing the amendments.
20 For the above reasons, I made my decision to allow the amendments. I asked the parties to consider the appropriate timetable for a trial commencing on Monday 5 March 2012. The parties were also to consider any other matters which needed to be dealt with (including questions of costs) and raise them at a further directions hearing at 11.00am on 14 June 2011.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.