MIRABELA NICKEL LTD (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED) -v- MINING STANDARDS INTERNATIONAL PTY LTD [No 3] [2020] WASC 372 (14 October 2020)

1. Unless leave is granted to the defendant, the defendant will be required to proceed on its case as presently pleaded. On that case, the defendant will succeed or not succeed. However, the defendant may not succeed by proving another case without amending its pleading so as to make it conform to the new case. The question whether the defendant should be given leave to change its case by amendment is a different question from the scope of the case the defendant may advance in accordance with its existing defence.
2. Order 21 of the Rules allows a party to amend a pleading without leave at any time until seven weeks prior to trial.
3. As was noted by Corboy J in Soia v Bennett:[1]

O[rder] 21 r 3 indicates that the court's supervision over the amendments of pleadings is now primarily concerned with questions of case management in the period shortly prior to and at trial. In that regard, the rule reflects the observations of the High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2007) 239 CLR 175 that there is a public interest in the efficient allocation of judicial resources which is a significant factor in the exercise of the court's discretion to grant leave to amend.

Order 21 r 5 provides that a pleading may be amended at any stage of the proceedings with leave of the court. Unlike the rules relating to amendment in some other jurisdictions, O 21 r 5 does not describe the purpose for which the discretion to allow an amendment is to be exercised. However, the principles relating to an amendment are well established. As with all interlocutory discretions, the question of whether leave to permit an amendment should be allowed is ultimately one of doing justice as between the parties in all of the circumstances, having regard to the public interest in efficient case management and the proper allocation of the court's resources.

1. Where an application is made by a party for leave to amend their pleadings, the court must have regard to considerations of case management, cost and delay.[2] In considering these matters, it is relevant to consider the extent to which any proposed amendment expands the issues to be litigated at the trial.
2. In considering the application, there must be an explanation for the delay in making the amendments. This is so that the court may be satisfied that the application is made in good faith and has before it all of the circumstances which are relevant to a consideration of the application.
3. If I allow the adjournment, I accept it will be necessary for the defendant to file a supplementary outline of Mr Milbourne and for the plaintiffs to respond to that. This will require the plaintiffs to consider what, if any, amendments need to be made to their reply and whether they wish to adduce any additional evidence. I accept that this will require the plaintiffs, at a minimum, to consider what additional evidence may need to be adduced from Mr Tucker and whether it should now seek to call Mr Carruthers, Mr Rathborne and Mr Loftus‑Hills. The plaintiffs say that they will not have sufficient time to consider the amendments and to prepare any necessary response (including any responsive evidence) before the trial is due to commence on Monday. From the affidavit evidence filed by the defendant, the defendant initially opposed any delay in the commencement of the trial. That position has now changed.[3]

1. From the evidence before me, I accept that the matters pleaded in the particulars to par 14(g)(ii) of the FFAD were the subject of discovery by the plaintiffs in October 2019 and April 2020. The documents that were the subject of the late discovery are pleaded at pars 22(lb) and 22(o). In my view, the documents at 22(lb) supplement but do not materially alter the pleading that was previously advanced by the defendant in par 22.
2. However, in my view, the document referred to at par 22(o) is of a different character. The file note is of a discussion between Mr Tucker and representatives of Appian. On its face, it suggests that Mr Tucker informed Appian firstly, that the defendant's offer was subject to funding being provided within 14 days, secondly, what might need to be done to improve Appian's offer and, thirdly, whether Appian remained engaged on the offer.
3. The defendant alleges that, on 10 November 2020, Mr Tucker informed him that the receivers were not in discussions with any other party. I accept that on the evidence currently before me, until receipt of the file note, while the defendant was aware discussions were continuing between the plaintiffs and Appian, they were not aware of the content of those discussions.
4. For these reasons, I consider that the plaintiffs could have made some, but not all, of the proposed amendments at an earlier stage.

1. The plaintiffs contend that the FFAD is defective as it is said to introduce into the pleading an allegation concerning false and misleading statements.
2. The plaintiffs contend that this is deficient in a number of respects, namely that no claim or consequence is said to flow from this, it raises two inconsistent states of mind, and it does not consider cl 9 of the Agreement.
3. For the following reasons, I do not accept that any of these matters should prevent the amendment being allowed.
4. First, the defendant's current pleading alleges that any agreement to extend the date for satisfaction of the finance condition was not valid because it was procured by an assertion of a right to termination which was knowingly false (par 14(g)) and that the alleged notice of termination was founded on unconscionable or inequitable conduct (par 22(f)). For this reason, I do not accept that the proposed pleading introduces an allegation of false and misleading statements. In this regard, I note that the plaintiffs have already dealt with the existing paragraphs of the defendant's defence in their opening submissions.[4]
5. I consider that the proposed amendments supplement and expand the existing pleadings by referring to the receipt of competing offers, discussions with a competing bidder, and whether the plaintiffs were seeking to terminate the Agreement. In this regard, I note that the question of whether the plaintiffs were in discussions with a competing bidder was already raised in par 22(e) of the third further amended defence. For this reason, I consider that the additional matters raised by the defendant in the proposed amendments are of relatively narrow compass. They concern whether certain representations were made in a telephone call on 10 November 2017 between Mr Tucker, Mr Milbourne, Mr Ford and Mr Carruthers, whether those representations were 'knowingly false', and the legal consequences that flow from these matters.
6. Second, I do not accept that there is any inconsistency in the proposed pleading. The defendant's case is that communications which passed between the plaintiffs and defendant did not constitute an agreement. If the court was to find that the communications did constitute an agreement, the defendant raises a number of matters in answer to that allegation, including that the agreement is not valid or enforceable because the communications were procured by misrepresentations.
7. Third, the question as to whether cl 9 of the Agreement applies can be pleaded by way of reply, as is currently the case. In this regard, I refer to par 9(l) of the third further amended reply.
8. In my view, the question as to whether the proposed amendments disclose an arguable ground of defence can be resolved at trial.

Plaintiffs' prejudice and need for an adjournment if leave is granted

1. The plaintiffs contend that, if an amendment is granted, the plaintiffs will suffer prejudice in having to deal with the matter on the run without further factual investigations as well as categories and avenues of discovery.
2. The alleged misrepresentations the subject of the amendments in the FFAD occurred in a telephone conversation on 10 November 2017 between Mr Tucker and Mr Milbourne, Mr Ford and Mr Carruthers. Each of Mr Tucker, Mr Milbourne and Mr Ford are already proposed to be called as witnesses at the trial.
3. The plaintiffs say that they will need to conduct further factual inquiries. I accept that it will be necessary to speak to Mr Tucker and the other people who participated in the conversation. However, it is not clear as to why it will be necessary for the plaintiffs to make the remainder of the factual inquiries that are set out in par 39 of their submissions.
4. In my view, the proposed amendments do not significantly add to the issues to be determined at trial. As presently pleaded, it will be necessary to make factual findings as to whether there were ongoing discussions with Appian. I accept that there are additional matters on which findings will now need to be made, including whether there were additional representations made during a conversation on 10 November 2017 and Mr Tucker's knowledge of these matters at that stage. I do not consider that the proposed amendment opens the possibility for significant further evidence to be adduced, although I accept that it is likely that some further evidence will be required.
5. That said, I accept that the proposed amendments raise additional and very serious allegations against the plaintiffs that the plaintiffs require sufficient time to address. Senior counsel for the plaintiff indicated that the plaintiff will require three to four weeks to enable them to take instructions on these allegations. This is, in part, because the witnesses are located in a number of locations, including New York and Brazil. Given the trial is listed to commence on Monday, if the amendment is allowed, the trial would not be able to proceed.
6. In balancing the interests of justice, including not only the parties in this proceeding but other members of the public who are waiting to have their matters listed, I inquired of counsel as to their availability for a trial during the remainder of the year in the event I allowed the amendment. The parties and counsel indicated they are available from 10 December 2020, which would enable the matter to be heard this year. For this reason, if I was to allow the amendment and vacate the trial, the interests of the general public and the use of public resources will not be impacted or wasted.

1. This is a borderline case. While I accept that most of the amendments could have been made at the time of that last amendment in July 2020, I accept that at least part of the reason for the late amendment is the late discovery on 9 September 2020 by the plaintiff. For this reason, in balancing the interests of the parties, I do not consider it would be just for the defendant to be shut out from pleading these amendments.
2. For these reasons, I do not consider that the amendments should be refused on the basis of delay. After careful consideration of the evidence before me and the submissions of the parties both in writing and orally, I have decided that the amendments should be allowed, subject to the following.
3. Given the seriousness of the allegations raised against the plaintiffs, I consider that it is appropriate that the plaintiffs be given some time to consider the allegations and what, if any, additional evidence they wish to adduce at trial. For that reason, I consider that the amendments should be allowed on the basis that the current trial dates are vacated and the proceedings are relisted to commence on 10 December 2020.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Soia v Bennett [2011] WASC 59 [53] - [54].

[2] See Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2007) 239 CLR 175.

[4] Plaintiffs submissions filed 18 September 2020 [77] - [78], [61(c)], [154].