Explanation for delay
21The plaintiff submitted that the cases make it clear that the processes of exercising the discretion to allow amendments involve a balancing exercise of the interests of both parties to the litigation and the other litigants in the court system.
22In support of this submission, the plaintiffs naturally referred to the decision of Aon Risk Services Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175. The plaintiffs helpfully summarised some of the principles taken from this case in these terms:
(1)To be taken into the exercise of interlocutory discretions is "[the] waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants ... Also to be considered is the potential for loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification ...".
(2)A party is not "to be rewarded by weighing in its favour the disruptive consequences of its own application" (in this case, the notice of motion disrupting the matter being set down for hearing, and the need for an amended defence to the cross-claim and further affidavits and other evidence, including expert evidence, discovery and subpoenas).
(3)There is no "right" to amend, and "An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation".
(4)"Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs".
(5)It has been long recognised that "personal litigants are likely to feel the strain of litigation more than business corporations or commercial persons ... The stated object [of the rules], of minimising delay, may be taken to recognise the ill-effects of delay upon the parties to proceedings and that such effects extend to other litigants who are also seeking a resolution in their proceedings".
(6)Whilst an application to amend will not necessarily be refused because of some waste of costs and some degree of delay, "It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates.
(7)When the court is considering whether to exercise its discretion to allow an amendment to pleadings, "[i]nvariably the exercise of that discretion will require an explanation to be given where there is delay in applying for an amendment" and that "[n]ot only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules".
(8)Although a party has a right to bring proceedings, "limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced".
(9)"[D]elay and costs are undesirable and that delay has deleterious effects, not only upon other parties to the proceedings..., but to other litigants".
23The plaintiffs placed great emphasis on what they say is a complete lack of explanation for the failure to bring a cross-claim within the numerous times which the Court has given the opportunity for Mr Magrath to do so.
24In the affidavit of Rebecca Jancauskas sworn 13 June 2012, the solicitor referred to the order giving leave by Associate Justice Hallen to file and serve any amended statement of claim (meaning cross-claim) by 27 April 2011. In paragraph 3 they state, "We did not comply with Associate Justice Hallen's order". I am asked to infer that this is an admission by them that it was their fault that the failure occurred.
25When one comes to the end of 2011, there is some clue as to what might be the cause, namely the statement that Mr Magrath was in financial difficulty and had a creditors petition against him in the Federal Magistrates Court by BMW Australia.
26During early 2012, the Court once again gave further time to serve his proposed pleadings and then bring the motion for leave to amend his pleadings. There is no explanation as to why these delays occurred in the early part of 2012. Eventually the motion was filed on 26 June 2012 and the delay thereafter is not due to Mr Magrath.
27As the plaintiffs point out, invariably the exercise of discretion to allow an amendment to the pleadings will require an explanation to be given where there is delay in applying for an amendment. This is so the Court is able to carry out the appropriate weighing of any explanation against the effects of any delay and the objectives of the rules.
28Here there is some explanation, namely solicitor's fault for some delays in the first half of 2011 and a possible explanation towards the end of 2011, that of Mr Magrath's business partner's pending bankruptcy. The proceedings were delayed on a number of occasions by adjournments in 2012 because of the bankruptcy of Mr Magrath's business partner. But that had nothing to do with the progressing of Mr Magrath's claim. Essentially there are no explanations for the first six months of delay in the year 2012. The number of things to be balanced against this minimal explanation of delay include:
(i)There is a strong and viable cross-claim not dependent upon the vagaries of oral evidence but which is clear.
(ii)The substance of the claim has not changed since it was first propounded in 2009.
(iii)Mr Magrath has progressed the claim by serving a detailed quantum report in December 2011.
(iv)As yet no hearing date has been fixed.
29It is suggested that there will be substantial further recasting in the evidence necessary and further costs be incurred by the plaintiffs. Naturally of course any costs thrown away as a result of the amendment should be recoverable against Mr Magrath. Given the nature of the closeness of the claim in a factual sense to that which was propounded initially, I doubt that the additional cost will be substantial even though there is a claim for damages in place of the claim for relief from the guarantee and indemnity. I acknowledge that there will be some additional evidence which the plaintiffs will have to call to deal with the damages now claimed.
30This amendment comes before the matter is set down for hearing and there is not a waste of precious court time in respect of an abandoned hearing or part of a hearing.
31In my view, subject to the appropriate protection being provided to the plaintiffs in respect of costs, these factors tend to suggest that it is appropriate for the Court to allow the amendment.
32I note that there has been no reference to any specific prejudice caused by the delay but there is the usual prejudice which one cannot identify simply by the passing of time. As was stated by McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551:
"The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates'. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, 'what has been forgotten can rarely be shown'. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose."
(Citations omitted.)
I note that this general prejudice exists.
33It seems to be me, given all these factors, I should allow the amended pleading to be filed and that order will be subject to orders that:
(i)the cross-claimant pay the costs thrown away as a result of the amendment;
(ii)the cross-claimant pay the costs of the plaintiffs in respect of all directions hearings in this court from 31 May 2011 to the present incurred by the plaintiffs except to the extent that orders have already been made to date in respect of any particular days in favour of the plaintiffs;
(iii)leave to assess forthwith.
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Decision last updated: 08 November 2012