1 MASTER SANDERSON: This is the defendant's chamber summons which is dated 21 July 2000 seeking leave to amend the defence and counterclaim in accordance with a minute of proposed further amended defence and counterclaim. The document in question is the minute of 3 August 2000. For reasons which I will explain, there was an earlier minute, but that has now been superseded, and the minute that I am dealing with today is the minute of 3 August 2000.

2 Before dealing with the application itself, I should give some history of the matters relevant to this application. On 24 March 2000 the plaintiffs gave notice of their objections to the defendant's counterclaim which was dated 9 March 2000. On 31 March 2000 the defendant's then solicitors advised the plaintiffs' solicitors that on receipt of an amended statement of claim, the defendant would amend its defence and counterclaim. This was to be done within 14 days.

3 On 12 April 2000 the plaintiffs forwarded an amended statement of claim, dated 10 April 2000, to the defendant. The plaintiffs heard nothing, and on 28 April 2000, they filed an application for leave to amend the statement of claim in terms of the document dated 10 April, and to strike out the counterclaim. The matter came on for a status conference before Registrar Martin on 5 May, and the learned Registrar referred the application for leave to amend and the strike-out application through to Master's chambers.

4 The matter came on in Master's chambers on 22 May 2000. The plaintiffs were granted leave to amend the statement of claim in terms of the minute dated 10 April. The strike-out application was deferred until 29 May 2000. When the matter came on on that day, I struck out the defendant's counterclaim in its entirety. On 29 June 2000 the plaintiffs advised the defendant that they intended to enter the matter for trial. The day after, the defendant informed the plaintiff that it wished to amend its defence and to put on a counterclaim, and that 14 days were required to bring on the application.

5 On 14 July 2000 the defence, which was dated 9 March 2000, was struck out and the defendant was given seven days to file an amended defence. On 21 July 2000 the defendant filed a minute of proposed counterclaim which was substantially in the same terms as the counterclaim struck out on 29 May 2000. A chamber summons was also taken out on 21 July 2000 and that sought leave to file a counterclaim. It is that chamber summons of 21 July 2000 which I am dealing with today.

6 In relation to the defence the plaintiffs do not oppose leave being granted save with respect to certain matters which are to be found in the particulars to par 14.2 of the proposed defence. Before detailing those complaints I should say something about the facts of the case.

7 The claim is, as counsel describes it, a sophisticated debt-collection case. The plaintiff says that he was engaged to do certain work, that he has done it and he is entitled to be paid for his services. Without going through in detail the nature of the claim, it is sufficient if I say that the services to be provided by the plaintiffs to the defendant were in the nature of accounting services and company secretarial services.

8 Paragraph 14 of the defence raises a claim by the defendant that the first plaintiff failed to perform his duties as an executive of the defendant for a certain specified period. The particulars plead in (ii) that the first plaintiff failed to provide certain information to a named individual, "the information, which included, but was not limited to the following." There is then reference to subpar (A) through to (L).

9 In my view the complaint made about the particulars in (ii) is properly made. Given the length of time that has passed since the defence was first pleaded I think it is incumbent upon the defendant to specify with precision what it is that was not done. To leave the plea at large as is done by the present wording I think is potentially embarrassing to the plaintiff. The plaintiff simply does not know what case it has to meet.

10 I do not think that this is properly a situation where a request for further and better particulars will suffice. It would not be further and better particulars the plaintiff would be seeking if a request was made, but actual particulars. If there are complaints about the plaintiffs' conduct, and clearly that is what is intended in par 14, then they should be particularised and to leave the matter as it stands at present is embarrassing and unfair.

11 There are also complaints in relation to pars 14.2(ii) A, D, E, F, I and K. The difficulties with these paragraphs really is that it is not possible to ascertain from the pleadings just what they mean. For instance, in relation to par (ii)A of the particulars it is said that the plaintiff was at fault in failing to provide to the auditor, "An independent review of the valuation report of Luen Heng Holdings Ltd (a Malaysian property development company in which the Defendant had invested) aimed at assessing the impact on its current operating budgets."

12 If a plea of that sort is to be made, some background facts have to be pleaded to indicated how it is that the provision of the particular document specified is relevant to the complaint made. Without the benefit of these background pleas the particulars are meaningless.

13 I would therefore not be prepared to allow the amendment insofar as these six subparagraphs of par 14.2(ii) are concerned. Having said that, I do think that it would be possible for the defendant perhaps quite simply to rectify the difficulties to be found in par 14.2(ii) and I would give the necessary leave to make amendments to that subparagraph.

14 That then leads to the question of whether or not leave ought be given to bring in a further version of the counterclaim.

15 I think it is apparent that the counterclaim has deficiencies. Although no concession was made by counsel for the defendant during the course of his submissions, I think the thrust of his argument was that relatively simple amendments which could be made within 14 days would cure any defects. The defects, it was submitted, were not so substantial as to lead to an order putting the defendant out of court with respect to the counterclaim.

16 The position of the plaintiffs was that the matter had gone on long enough. The counterclaim had been pleaded and repleaded and it was still manifestly defective. The plaintiffs were anxious to get on with what, they say, is a simple case, and to allow further time for the pleading of a counterclaim would be to unduly delay the plaintiffs, was not consistent with case-flow management principles and certainly was not in the interests of justice.

17 In my view, the problems with the present version of the counterclaim are significant. Paragraph 24 of the counterclaim pleads an implied term of the contract between the first plaintiff and the defendant. The term said to be implied is a term requiring the first plaintiff, as company secretary, to act with due care and skill. Such a plea is, I think, unexceptional and would in all probability be implied.

18 Paragraph 25 pleads tortious duty to the same effect. That is to say that the first plaintiff would discharge his duty with care and skill. Once again, that is an unexceptional plea. Paragraph 25A then pleads an express term of the contract between the first plaintiff and the defendant. The term is said to be as follows:

"... the First Plaintiff was under a contractual obligation to 'undertake such duties and exercise such powers in relation to the [Defendant] and its business as the Board of the [Defendant] shall from time to time assign to or vest in him'."

19 For any claim to arise pursuant to an alleged breach of that term it would be essential for the defendant to plead what duties or powers were assigned to the first plaintiff or vested in him pursuant to a decision of the board. There is no such plea. Absent such plea, I simply can not see how a claim in contract could arise pursuant to par 25A.

20 It might perhaps be the case that an amendment to the counterclaim setting out the board's decision would solve the problem, but it must be said that the omission from the pleading at present is obvious and glaring and does call into question why such an omission should have occurred. It certainly can be said that at the moment no cause of action arises consequent upon the contractual plea in par 25A. In relation to the plea that skill and care was required in the first plaintiff's exercise of his duties, there is no plea as to what particular duties arose consequent upon the general duty to exercise skill and care.

21 Paragraph 26 pleads that there was an obligation on the first plaintiff or a duty to supply certain information to auditors. Just assuming for present purposes that this duty arises as a consequence of the duty of skill and care, the plead leads nowhere.

22 Paragraph 27 pleads that it was a breach of the first plaintiff's duty not to provide certain information specified in par 27(a) through to (l). There are no facts pleaded which would, in my view, give rise to such a duty. It may be that a duty of skill and care the first plaintiff owed the defendant could lead to a requirement that, taking an example, the document referred to in par 27A should have been provided to the auditor but there is nothing in the pleading itself which could lead to that conclusion. In other words, there's a total absence of background facts which could lead to the requirements said to flow from the duty of skill and care as pleaded in par 27.

23 It may be that is a problem that can be cured but if it is to be cured it seems to me that it would require a substantial amendment to this document to greatly expand upon the financial position of the defendant, its inter-relationship with other corporations and the importance of the documents referred to in par 27 to what I might call a clean audit report.

24 I am not confident that such a pleading could be easily framed or that it could be properly done within a short period of time. I say that in light of the history of this matter and the fact that the defendant has been on notice since March of this year, five months ago, of the difficulties the plaintiffs perceive bedevils the counterclaim.

25 There are further difficulties with the counterclaim. The reference to particular documents found in par 27 is occasioned by the same difficulties as par 14. The documents referred to are, in the context of the pleading, meaningless and par 27 is therefore confusing.

26 A number of other complaints were raised about the counterclaim. In par 28 there is a pleading verbatim of certain reports produced by the auditors. While I would accept that the form of the plea is not consistent with good pleading practice, the problems with par 28 are not so significant that I would, were there no other difficulties with the pleading, refuse to allow the document to stand.

27 Of significance, however, is the fact that the damages said to have been suffered by the defendant as a result of the conduct of the plaintiffs are not fully particularised. Particulars are to be found in par 31 but they are, with respect, wholly inadequate. Given that the problem has been extant for five months I think it is only reasonable that the plaintiffs should have been provided in this document with full and complete particulars of what is, at $615,000, a very significant claim.

28 In all the circumstances then I am not satisfied that it would be appropriate to grant leave to the defendant to bring in a further counterclaim. In reaching that conclusion I am mindful of the fact that what will almost inevitably happen is that the defendant will issue separate proceedings and perhaps seek to have the two actions joined together.

29 It would make no practical sense to have two separate actions in relation to the matters at issue between the parties. But it seems to me that the plaintiff is entitled to press on with its claim and to be continually held back by a defendant who, despite repeated attempts, has been unable to put its house in order is simply unfair. As a matter of practice it may be that the two actions can conveniently be heard together.

30 The plaintiff now wishes to enter the matter for trial. As I understand it, discovery has been given and there is no reason why the entry by the plaintiff could not be completed in the near future. Given that at present the delay in obtaining a date for hearing is approaching 14 months it is reasonable to assume that if the defendant was to issue separate proceedings and move expeditiously, bearing in mind always that discovery has been given in these proceedings by both parties, then the two matters could be heard together. It is certainly possible and it is dependent upon the way in which any fresh proceedings are handled by the present defendant.

31 The consequence then of not granting leave to bring in a further amended counterclaim is, I think, to transfer the onus to move expeditiously in any fresh action to the defendant.

32 It is up to the defendant to ensure that the two matters can properly be heard together. I think that is a preferable case management approach to continually saddling the plaintiffs with the consequences of the dilatory conduct on the part of the defendant.

33 In conclusion can I just make one final comment about the present solicitors for the defendant.

34 It is plain from the file and my contact with this action, generally, that the defendant's present solicitors have battled manfully to comply with directions I have made from time to time and to put the defendant's case before the Court. I would not want it to be thought that anything in these reasons is either directly or indirectly a criticism of the defendant's present solicitors. I think they have been, from what I know of the file, confronted with a very difficult situation and I cannot see that they could realistically have done more than they have. I think, however, that is not a sufficient reason for providing more time to plead a counterclaim.

35 I think that the point has been reached where fairness to the plaintiffs requires that they be allowed to proceed with the action and that the defendant be left to initiate fresh proceedings and make the running with those proceedings so as to allow the two actions to be heard together. If that then does not occur it is simply a fault of the defendant.

36 In all the circumstances then I think that I ought grant leave to the defendant to amend its defence substantially in terms of the minute of 3 August with leave to further amend the particulars to be found in par 14.2 of the defence. I would dismiss the application for leave to file an amended or indeed any counterclaim. The costs thrown away by reason of the amendment to the defence ought be paid by the defendant in any event. The amended defence ought be filed and served within 14 days and the defendant ought pay the costs of this application, in any event.