discussion
41 By his affidavit sworn on 6 July 2011, Mr O'Brien deposed to the history of the matter and stated:
4. In terms of the background of the matter, I refer to my affidavit sworn on 25 May 2011. In that affidavit, at paragraph 12, I refer to the Applicant having filed and served an Amended Application and Amended Statement of Claim on 25 February 2011. Since March of this year, the Respondents have been seeking further and better particulars of the Applicant's claim. In this regard I refer to my letter to the Applicant of 18 March 2011, as referred to in paragraph 14 of my 25 May 2011 affidavit.
5. Since early in the proceeding, it has been the Respondents' intention to put on expert evidence to respond to the Applicant's claim for loss and damage. In particular, it has been my intention, once the Applicant has properly articulated its claim for loss and damage, to obtain a report from an expert in the real estate industry on whether the claim for loss and damage by the Applicant is sustainable. I have withheld engaging an expert to provide such a report until the Applicant has properly set out its claim for loss and damage, in order that the expert engaged is focused only on relevant issues and prepares a report accordingly. Notwithstanding this, in early May of this year I and lawyers assisting me in this matter prepared draft briefing documents, and conducted some enquiries, with a view to engaging an expert. Those enquiries did not involve contacting potential experts in the real estate industry, but they did involve identifying some potential experts who might be contacted in due course.
6. It has been my practice to brief experts with a copy of the relevant pleadings, including the final version of the statement of claim and defence and, where relevant, further and better particulars. That is a practice that I propose to adopt when engaging an expert to prepare a report for the Respondents in this proceeding. However, I have had significant difficulty understanding the Applicant's claim for loss and damage, which has been borne out by my letters to the Applicant since March of this year.
7. On 20 June 2011, the Applicant was ordered to provide further and better particulars of its loss and damage, or an amended pleading setting out full particulars of loss and damage, by 22 June 2011. When these orders were made I was expecting that the Applicant would fully particularise its claim for loss and damage in order that I would be in a position to engage an expert to provide a report in relation to the Applicant's claim for loss and damage. However, the Further Amended Statement of Claim did not, in my view, comply with the Court's orders. I therefore sought clarification of the Applicant's position. In this regard, I refer to my two affidavits of 4 July 2011, which set out relevant correspondence between the parties. It was only in the Applicant's facsimile to me of 1 July 2011 (exhibit MJO-25 to my Second Affidavit of 4 July 2011) that I understood the Applicant to be saying that it would be in the same financial position, but for the alleged misrepresentations, and its reliance upon them, in entering into the Licence Deed - but without any obligation to pay commission to be [sic] Respondents. Until that point, I had expected that the Applicant would be providing calculations in support of the financial position it alleges it would have been in had it not entered into the Licence Deed.
42 Mr O'Brien further stated that he now required time to plead to the FASOC and then would need to commission and receive a responsive expert report, which cut across preparation for trial in accordance with the orders.
43 Before me, senior counsel for Tada made clear that Tada no longer based its claimed loss and damage on goodwill and simply claimed the payments which it had made and would have to make under the licence deed (which it would not otherwise have been obliged to make).
44 Senior counsel for Tada submitted that it sought relief by way of damages under ss 82 and 87 of the TPA and was required to do no more at this stage to articulate that there was loss of damage. It had pleaded such loss and damage in accordance with Murphy & Anor v Overton Investments Pty Ltd (2004) 216 CLR 388 ("Murphy v Overton"), which established that loss or damage under Part IV of the TPA could be constituted by the assumption of outgoings under a lease which were larger than the representee had been led to believe, although there was no difference between the price paid under the agreement and the value of the property as at the date of the agreement, and no evidence that the representees were not receiving value for the outgoings they were obliged to pay. The High Court in Murphy v Overton observed that the representees did not contend that they suffered loss by entering the relevant lease rather than taking some other accommodation and the amount of the loss claimed was not to be "determined… only by comparing the financial position" on both those scenarios (at 413).
45 Tada submitted that as the claim based on goodwill was abandoned in the PFASOC, which was forwarded to the respondents on 29 June 2011, the respondents should have comprehended that no comparison or particulars relevant thereto were required in relation to Tada's alleged loss or damage. Further, as the PFASOC only confined or narrowed Tada's case, the respondents should have immediately consented to it, and could reasonably be required promptly to plead to it and to prepare expert evidence by the scheduled trial date.
46 Senior counsel for Tada submitted that, consistently with the decisions in Sali v SPC Ltd & Anor (1993) 67 ALJR 515 ("Sali v SPC"), Andrews v Australia and New Zealand Banking Group Ltd [2011] FCA 388 ("Andrews") and ss 37M and 37I of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act"), the trial date must not be vacated given that the proceeding probably could not be refixed within a short time, and there was no sufficient admissible evidence that maintaining the existing trial date entailed any prejudice to the respondents. Senior counsel contended that, accordingly, the trial should proceed as scheduled to achieve justice to Tada, although that course might produce a sense of injustice in the respondents.
47 I rejected that submission. The principles governing the grant of an adjournment do not require a party to be held, in the interests of achieving a quick resolution of the dispute, to a trial date on which they would be inadequately prepared properly to present their case, due to inadequate pleading or other deficiencies on the part of an opponent. Further, no particular form of explanation is required.
48 In Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261, the Full Federal Court dismissed an appeal from the decision of a trial judge to grant the applicant leave to amend its pleading when it was taken by surprise after the respondents' opening at trial, although the need to amend was primarily the applicant's fault and resulted in the adjournment of the trial.
49 The Full Court discussed in detail the High Court's decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 ("Aon"), observing that the philosophy identified as informing the rule particularly at issue in Aon was also evident in ss 37M and 37N of the Federal Court Act. Their Honours observed at 275:
The trial judge found that there was an error of judgment by the ACCC of the type contemplated by the High Court in Aon Risk… In so finding, his Honour acted upon the acknowledgment by counsel for the ACCC that they had not previously identified the problem… The Cement Australia parties submit that his Honour erred in this regard.
50 The Full Court noted that in the case before it, the applicant had made an error of judgment, and although there was no sworn evidence providing an explanation, the Full Court considered that in the circumstances, the limited explanation by counsel responsible for the pleading sufficed, and was capable of acceptance by the primary judge. It was a very different position from that in Aon, where the claim introduced by the amendment had not previously been raised as a result of a deliberate tactical decision (at 276). Their Honours also observed at 277 that the High Court in Aon was "more concerned that there be an explanation… than the form in which the explanation was proffered".
51 The Full Court stated at 275-276:
Aon Risk is not a one size fits all case. While various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application.
52 The Full Court at 278-279 rejected the submission that the primary judge had failed to give proper consideration to:
the effect upon the administration of justice of a six-week trial that had been set down for approximately 18 months being adjourned, which encompassed the Cement Australia parties having both to revisit interlocutory steps, their evidence, cross-examination and other steps for trial as well as the potential waste of court resources and the strain that the litigation imposes upon the litigants, particularly in the context of the present proceedings involving individuals.
53 Their Honours noted that the trial judge may have been conscious of, and, on the basis of Sali v SPC Ltd was entitled to factor into his judgment, the state of the listings, the question of likely delay and the effect on other litigants whose cases were awaiting trial (at 279).
54 Their Honours stated at 279:
The trial judge did not mention all of these matters in his reasons. However, ultimately, against his assumed knowledge of the listings of the court it may be inferred that his Honour considered that any delay would not be undue. Accordingly it follows implicitly in his Honour's reasoning that while there will always be inevitable irreparable prejudice which follows delay, it would not in this case likely be undue prejudice. The exercise of discretion involves, necessarily, a balancing exercise.
Importantly, to adapt the joint judgment in Aon Risk 239 CLR 175 at [102] to reflect the relevant statutory provision in the present case, the objectives in s 37M of the Federal Court Act do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked.
There is nothing in Aon Risk or ss 37M and 37N of the Federal Court Act which would suggest that the consideration that it is desirable that the case be decided on its merits, so as to preserve public confidence in the administration of justice, is a consideration irrelevant to the exercise of his discretion.
It should be borne in mind that the extent to which the granting of an amendment which will lead to an adjournment of a trial may have the adverse effect upon the orderly administration of justice envisaged by the High Court in Aon Risk is a question in relation to which a trial judge of the Federal Court enjoyed a peculiar advantage.
55 In Andrews, Gordon J, in the context of an application for the trial of a separate question and to strike out a paragraph of the respondents' fast track response in a representative action, observed that recognition of case management principles had modified the traditional restraint on strike out applications, albeit as the High Court stated, "case management principles should not supplant the objective of doing justice between the parties according to law".
56 In that context, her Honour stated at [27]:
The High Court in AON then went further - their Honours acknowledged that it may be necessary in an appropriate case to make a decision which may produce a sense of injustice, for the sake of doing justice to the opponent or to other litigants: AON at [94]. Such an approach is consistent with the direction in s 37M(3) of the FCA that the Rules must be interpreted and applied, and any power conferred must be exercised or carried out, in a way that best promotes the overarching purpose - the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: see s 37M of the FCA and AON at [97]-[98].
57 In the present case, the respondents' complaints in relation to the FASOC filed on 22 June 2011 were, in my opinion, well founded. Not only were the amendments more extensive than the order permitted, but the particulars of calculation of loss and damage were wanting and retained, without any elucidation, the confusing goodwill allegation, which was potentially inconsistent with the claim underpinning the following particulars.
58 Further, as stated in the June reasons, the pleading of the ASOC was unsatisfactory in crucial respects, fully justifying the respondents' complaints that its obscurities, confusing features (including the relationship of the loss and damage pleaded to the expert evidence served) and the omission of fundamental particulars did not permit them to prepare answering expert evidence. The respondents' complaints remained unaddressed for a prolonged period without any satisfactory explanation.
59 In my opinion, the eleventh hour deletion of the goodwill particular from the PFASOC, which Tada (even had it obtained the respondents' consent) required leave to serve, did not, in the context of the long-standing confusion generated by the three previous statements of claim, amplified by inconsistent or ambiguous statements in hearings and in correspondence, make clear how Tada put its case on loss and damage.
60 The cases on which Tada relied to oppose vacation of the trial date involved very different facts from those of this case, which entailed last minute repleading by the party resisting the vacation of trial date. The FASOC's deficiencies, in my opinion, fully justified the striking out of at least paragraphs 12 and 16. Tada required leave to file and serve the PFASOC, which, save for the respondents' concession that it could plead to it, may not have been granted, given the shifts in, and obscurity of, Tada's loss and damage claim throughout four successive iterations. The need to vacate the trial date was, in my view, adequately explained and necessary in order to afford the respondents an adequate opportunity to prepare for trial, and to permit the case to be decided on its merits. While, as in almost every instance where a trial date is vacated, delay will be entailed, it was occasioned by the deficient or recast pleadings, associated delay and inadequate explanations of Tada. Accordingly, I ordered Tada to pay the respondents' costs.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.