JUDGMENT
1 Shaw J: This case concerns an attempt by Randwick City Council (the plaintiff) to recover rents said to be owed by the defendants in relation to a gymnasium at Heffron Park within the area of Randwick Council and which has been variously described as located in Maroubra or Matraville. The critical question, which will need to be determined in due course, is whether the defendants are personally liable for that rent or whether they are protected by some corporate entity which, in point of law, may have been obliged to pay the rent. This defence is mounted despite the fact that it seems as a matter of practical reality, that the two personal defendants may have operated the gym at material times, although I make no final finding on this because the evidence is incomplete.
2 The gymnasium was variously described in its initial stages (more exotically) as Tarzan and Jane, then as Pace Gymnasium, and finally as Gold's Gymnasium. The question of the corporate responsibility to make payments pursuant to a sub-lease will be the subject of further evidence and submissions before this court. I have an open mind about these questions and will be assisted by the submissions on questions of fact and law by counsel for the respective parties.
3 The present question is an interlocutory one, being an application by the plaintiff to amend its pleadings.
4 The application for amendment arises out of a cross claim filed by the defendants to the effect that the defendants were entitled to certain gym equipment left in the premises and that, despite their request, they had been refused access to the equipment and the premises. It is said by the defendants that the plaintiff has unlawfully converted the equipment.
5 Solicitors for the plaintiff have sought leave to file an amended defence for the cross claim based, in essence, on provisions of the Impounding Act 1993 (NSW) (the Act). The amendments are detailed but, in summary, contend that the plaintiffs sold the gym equipment lawfully, arising out of rights that were exercised in accordance with the provisions of the Act.
6 Reliance by the plaintiff upon this legislative provision was announced in the opening of counsel for the plaintiff on the first day of the trial. Thus, the defendants were given due notice of it, particularly in the light of the events that have since transpired. The trial proceeded for some days before me, but then was adjourned by consent because both parties felt the need to revisit the discovery process and to produce further documents. It is said by the defendants that the substantial fault was on the part of the plaintiff, but I do not need to express any opinion on that point for present purposes. The important point is that an adjournment has been granted and the matter will be resumed at a date to be determined either by agreement between the parties or by the court. Hence, it seems to me that any prejudice in terms of surprise, or to resort to a cliché of legal discourse, trial by ambush has been effectively negated by the stubborn reality of an adjournment which will obviously give the defendants adequate time to consider the new matter which is now sought to be pleaded. Moreover, the plaintiff has expressly and candidly indicated to the court that any witnesses previously the subject of cross-examination will be made available for further cross-examination if the amendment is granted, and that therefore the defendants will have every opportunity to explore these issues with witnesses whether they have been excused from further attendance or not. Finally, any detriment to the defendants can be dealt with by way of a carefully crafted costs order which would, depending upon the outcome of the proceedings, be designed to compensate for any costs thrown away by reason of the relatively belated application to amend the pleadings.
7 In my opinion, the determination of proceedings before this court should, if it can be avoided, not be determined on pleading points or matters of form but should be determined upon the substantial merits and justice of the particular case. I believe that is common ground. The defendants realistically recognise that the inclination of modern of courts is to allow amendment of pleadings at any stage of the case if prejudice can be obviated in the ways that I have suggested. Obviously, procedural fairness is paramount, but subject to that consideration, parties should be able to agitate all relevant issues reasonably open to them in the one proceeding, as distinct from encouraging multiple or subsequent proceedings raising further and other matters. The contemporary court system has its emphasis upon efficiency, expedition and the due resolution of all issues which are outstanding between parties. The times when curial proceedings were determined on the basis of bare technicalities or pleading points are over.
8 The practical, modern rules of this court, Part 20, rule 1(2), make it clear that all "necessary" amendments "shall" be made for the purposes of determining the real questions, correcting defects or avoiding multiplicity of proceedings. It follows that the court, in entertaining an amendment application, must balance considerations of prejudice; compensation by consequential and appropriate costs orders; whether the amendment is made for a proper purpose; whether adjournment allows for procedural fairness; whether the amendment would serve the administration of justice; and whether (and this seems to me to be the issue of substance in the present debate) the amendment would be "obviously futile", the latter terminology having been used by Sir Frederick Jordan in Horton v Jones & Ors (No 2) (1939) 39 SR (NSW) 305 at 3110.
9 I think it is correct to identify the real and substantial ground of objection to the amendment of the proceedings by the defendants as being that the defence to the cross claim now sought to be propounded is either futile or not reasonably arguable. This argument depends upon a consideration of the Act. It is also suggested that the amendment is not made in "good faith", that the plaintiff has not discharged the onus imposed upon it to persuade the court that an amendment should be granted at this late stage, that the defendant should not be put to the time, trouble and expense of meeting a late amended defence which is futile when they are "little people" as distinct from the plaintiff, being a governmental body with substantial resources. I have had regard to all of these contentions.
10 It is common ground that the determination of the question of whether an amendment should be allowed at this stage is a matter of discretion, a discretion however which must be exercised judicially and not in some unfettered or arbitrary way. It is obviously a discretion which must consider the due administration of justice and any prejudice to the parties resulting from such an amendment if it were to be allowed.
11 Counsel for the defendants cogently pointed to observations by Lord Griffith in Ketteman v Hansel Properties Ltd [1987] 1 AC 189 at 233, where his Lordship regarded as relevant factors as to the disallowance of the pleading amendment that the plaintiffs were "personal", the trial was nearly ended, the merits of the case had been fully investigated, the defendants had been parties to the litigation for some years and that "they had no one but themselves to blame for not pleading limitation in the original defence if they had wished to do so". Accordingly, it was held that there were "ample grounds" upon which the discretion could be exercised to deny a particular amendment of the pleadings, which was sought in that case.