Supreme Court of the ACT|2014-08-18|Before: Kevin J

Tuggeranong Town Centre Pty Limited v Brenda Hungerford Pty Limited and Leda Commercial Properties Pty Limited [2014] ACTSC 197 (18 August 2014)

TUGGERANONG TOWN CENTRE PTY LIMITED v BRENDA HUNGERFORD PTY LIMITED AND LEDA COMMERCIAL PROPERTIES PTY LIMITED

[2014] ACTSC 197 (18 August 2014)

LIMITATION OF ACTIONS - general - whether amendment of pleading introduced a new cause of action - whether any new cause of action based on substantially the same facts.

Court Procedures Rules 2006 (ACT), rr 21, 406, 480, 481, 482, 501, 502, 503,

JA Simpson and ESC Werner, Oxford English Dictionary (2nd ed, 1989, Clarendon Press: Oxford) vol v

Daniel Groenberg and Alexandra Mullbrook, Stroud's Judicial Dictionary of Words and Phrases (6th ed, 2000, Sweet and Maxwell: London) v 1

William Blackstone, Commentaries on the Laws of England (1768, Clarendon Press: Oxford) v 3

Thomas Chitty and Herbert Chitty_, Chitty's Forms of Civil Proceedings in the Kings Bench Division of the High Court of Justice_ (Sweet and Maxwell: London, 1902) 13th ed

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

Baker v Hallett [2004] QSC 132

Brickfield Properties Ltd v Newton [1971] 1 WLR 862

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541

Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd (2010) 4 ACTLR 114

Cooke v Gill (1873) LR 8 CP 107

Cropper v Smith (1884) 26 Ch D 700

Draney v Barry [2002] 1 Qd R 145

Harris v Western Australian Exim Corporation [1994] FCA 1065; (1994) 50 FCR 1

Inglis v Moore (1981) 51 FLR 293

J v Australian Capital Territory [2009] ACTSC 170; (2009) 172 ACTR 1

Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (2009) 4 ACTLR 20

Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666

Macpherson & Kelley v Kevin J Prunty & Associates [1983] VicRp 53; [1983] 1 VR 573

Meredith v Commonwealth [2009] ACTSC 168

Nectaria Nominees Pty Ltd v Commonwealth (1992) 111 FLR 459

Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233

Thomas v State of Queensland [2001] QCA 336

Tildseley v Harper (1878) 10 Ch D 393

Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514

Warner v Sampson [1959] 1 QB 297

Western Australia v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245

Westpac Banking Corporation v Hughes (2011) 278 ALR 145

BETWEEN: TUGGERANONG TOWN CENTRE PTY LIMITED (ACN 117 384 424)

AND: BRENDA HUNGERFORD PTY LIMITED (ACN 105 607 805)

LEDA COMMERCIAL PROPERTIES PTY LIMITED (ACN 008 613 447)

1. The defendant bring in on a date to be fixed copies of the documents to be amended in accordance with these reasons and the argument of the parties for leave to file them to be granted.

2. The parties appear on a date to be fixed to seek all directions necessary in consequence of the amendments to the pleadings to be granted under Order 1 and any other directions required to prepare the proceedings for hearing.

3. The defendant pay the costs of the plaintiff and the third party, including costs thrown away by the amendments.

1. In 2000, the third party, Leda Commercial Properties Pty Limited, was the owner as Crown Lessee of a shopping centre complex known as the Tuggeranong Town Centre.

2. The third party sublet certain premises in the Centre to Giving and Living Pty Limited commencing on 1 September 2000. It is alleged in these proceedings that Giving and Living Pty Limited transferred its interests as sublessee in the sublease for those premises to the defendant, Brenda Hungerford Pty Limited, on or about 4 November 2003, when it sold its business to the defendant and that, at that time, the third party agreed with the defendant to an extension of the term of the sublease. There may have been other amendments to the terms of the sublease.

3. It is also alleged in the proceedings that, on or about 6 December 2005, the third party transferred its interests as sublessor in the sublease to the plaintiff, Tuggeranong Town Centre Pty Limited.

4. The defendant alleges in the proceedings that neither the third party nor the plaintiff notified it of the transfer of these interests. This, it is said, will raise an issue as to when, if at all, the transfer affected the defendant.

5. It is alleged in the pleadings that, on or about 31 January 2008, the defendant abandoned the premises, though there was a significant period of the term of the sublease yet to run.

6. On 20 February 2008, the plaintiff commenced proceedings in the Magistrates Court against the defendant under the Leases (Commercial and Retail) Act 2001 (ACT) seeking

(1) an order confirming the termination of the tenancy on 28 December 2006;

(2) judgment for $21,384.77 (subsequently amended to $21,404.77) in respect of unpaid rent, contribution to outgoings, promotional levy and goods and services tax for December 2007 and January 208 said to be payable under the sublease;

(3) compensation for making good the premises (later amended to claim $12,640) and loss of the rent for the sublease as a result of the abandonment of the premises by the defendant until the expiry of the lease or until a new tenant enters into a sublease for the premises (subsequently amended to 31 May 2008).

7. On 20 May 2008, the plaintiff filed an Amended Application. On 1 August 2008, these proceedings were transferred to this Court. On 5 January 2010, the plaintiff filed an Amended Originating Claim with a Further Amended Statement of Claim dated 4 January 2010.

8. The defendant filed a defence and counterclaim. This was subsequently amended. The Amended Defence denied certain of the allegations made in the Further Amended Statement of Claim. It denied that it was liable under the sublease because no notice of the assignment was given to it, as noted above (at [4]). It denied liability for the outgoings and other amounts claimed as also noted above (at (2) in [6]) because of alleged breaches of some terms of the sublease by the plaintiff.

9. An Amended Counterclaim of the defendant pleaded that certain representations were made on behalf of the third party or the defendant, as the case may be, and that the relevant parties breached those representations or they were not true and this caused the defendant loss and entitled it to terminate the sublease.

10. On 22 October 2013, application was made by the defendant for the further amendment of certain of its pleadings. That application was heard by me on 17 December 2013. I reserved my decision.

11. Application was made by Application in Proceedings dated 22 October 2013 for the amendment of certain of the pleadings of the defendant and for the filing of certain further pleadings and for costs.

12. The application was not entirely straightforward because some of the proposed amendments were not in dispute, some were abandoned and some were contested.

13. There were four documents involved; two to be amended and two to be filed. The documents, were I to permit the amendments or their filing, would be as follows (with the terms I will use in these remarks in brackets)

(a) a further amended defence to further amend statement of claim and further amended counterclaim. (I shall refer to this as the Defence when referring to the first part of the document and Counterclaim when referring to the other part);

(b) a further amended statement of claim to accompany the third party notice. (I shall refer to this as the Third Party Claim);

(d) a rebutter to the amended reply to the amended defence. (I shall refer to this as the Rebutter).

14. The Court Procedures Rules 2006 (ACT) makes provision for the amendment of documents. The relevant provisions are

502 Amendment - of documents

(1) At any stage of a proceeding, the court may give leave for a party to amend, or direct a party to amend, an originating process, anything written on an originating process, a pleading, an application or any other document filed in the court in a proceeding in the way it considers appropriate.

(2) The court may give leave, or give a direction, on application by the party or on its own initiative.

Note 1 Pt 6.2 (Applications in proceedings) applies to an application for leave or a direction under this rule.

Note 2 Rule 6902 (Leave may be given on conditions) provides that, if the court gives leave under these rules, it may give the leave on the conditions it considers appropriate.

(3) The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started.

(4) If there is a mistake in the name or identity of a party, the court must give leave for, or direct the making of, amendments necessary to correct the mistake, even if the effect of the amendments is to substitute another person as a party.

(5) This rule does not apply in relation to an amendment of an order.

Note See r 6906 (Mistakes in orders or court certificates) for amendment of orders.

(6) This rule is subject to rule 503 (Amendment - after limitation period).

503 Amendment - after limitation period

(1) This rule applies in relation to an application for leave in a (1) This rule applies in relation to an application for leave in a proceeding to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.

Note Pt 6.2 (Applications in proceedings) applies to an application for leave under this rule.

(2) The court may give leave to make an amendment correcting a mistake in the name or identity of a party, even if the effect of the amendment is to substitute a new party, only if -

(a) the court considers it appropriate; and

(b) the court is satisfied that the mistake sought to be corrected -

(i) was a genuine mistake; and

(ii) was not misleading or likely to cause any reasonable doubt about the identity of the person intending to sue or intended to be sued.

(3) The court may give leave to make an amendment changing the capacity in which a party sues, whether as plaintiff or counterclaiming defendant, only if -

(a) the court considers it appropriate; and

(b) the changed capacity in which the party would then sue is a capacity in which the party might have sued on the day the proceeding was started by the party.

(4) The court may give leave to make an amendment to include a new cause of action only if -

(a) the court considers it appropriate; and

(b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.

15. Generally, amendments should be made at an early stage in proceedings and good grounds are usually required for allowing late amendments which requirements cast on an applicant for amendment what French CJ described in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at 182; [4] as "a heavy burden".

16. This is particularly so where the amendment will cause delay in proceedings, bringing with it possible prejudice to other parties and, indeed, other litigants in the court. That is of less significance in this case where the hearing date has already been set and the disruption caused by delay will not arise.

17. The defendant did not file an affidavit in support of its application to amend the pleadings. Such an affidavit would ordinarily be at least highly desirable to explain why the amendments were not sought earlier and why the lateness of the application would not result in its dismissal. The affidavit would be to discharge the "heavy burden" referred to earlier (at [15]).

18. This issue was raised squarely in correspondence from the solicitors for the plaintiff and the third party. That letter, dated 1 November 2013, would have given time for an affidavit to be filed well before the hearing.

19. Nevertheless, that matter did not feature with any prominence in the hearing before me, though Mr B Meagher SC, counsel for the plaintiff and the third party did refer to what he described as "the enormous delay that has occurred" and pointed out

that there needs to be an explanation as to why that [i.e. the making of the application earlier] hasn't happened, and there's no explanation.

20. Mr C Erskine SC, who appeared for the defendant, acknowledged this lacuna and the problem it created for the defendant. He explained, however, that the nature of the proceedings and the rather leisurely pace of discovery and filing of affidavits (indeed the plaintiff was still filing affidavits in June and July 2014 while the latest affidavit, filed by the defendant, was filed on 12 August 2014) meant that there was material which required a refining of the pleadings. As he put it, the application had to be seen "against a backdrop in which discovery has been, with all the speed of an onrushing glacier". While acknowledging delays by the defendant, he asserted, correctly, that there had been delays on all sides.

21. It seems to me that appropriate amendments, in these circumstances, may be allowable but I must beware that prejudice, such as where the amendments require significant further evidence, especially of the kind that will be affected by delay, such as through fading memories, or where the hearing date or preparation for the trial may be adversely affected, should not be allowed to disadvantage the plaintiff or the third party or the proper presentation of their cases before permitting any such amendments.

22. As Mr Erskine pointed out, the plaintiff and third party did not refer to any special prejudice and there was no evidence of such identified prejudice, though some claimed prejudice is dealt with later in these reasons.

23. I also note that there is a difference between an amendment which is required for the purpose of "deciding the real issue in the proceedings" (r 501(a) of the Court Procedures Rules) and those sought for prosecuting a new case at trial. The distinction between the two may not always be as clear in practice as this articulation suggests.

24. There is no doubt that what was in earlier times a relatively liberal approach to amendment (see, eg Tildesley v Harper (1878) 10 Ch D 393 at 397; Cropper v Smith (1884) 26 Ch D 700 at 710) has had to become more constrained in recent times with changing practice and greater strains on courts and litigants and an increasing recognition of a public interest in the effective and efficient administration of civil justice proceedings. An example of that constraint is to be found in r 21 of the Court Procedures Rules.

25. Nevertheless, as French CJ said also in Aon Risk Services Australia Ltd v Australian National University at 192; [30], "'case management principles' should not supplant the objective of doing justice between the parties according to law", though such a bald statement does not represent a prohibition on refusing amendments in appropriate cases.

26. The other issue raised by these rules and by this application is the question of when a new cause of action may be pleaded after the expiry of the relevant limitation period. Rule 503 of the Court Procedures Rules regulates this consideration and, particularly relevant to these proceedings, is r 503(4) as set out above (at [14]). This provision has been the subject of consideration recently in this court.

27. A cause of action is defined in Cooke v Gill (1873) LR 8 CP 107 at 116 as "every fact which is material to be proved to entitle the plaintiff to succeed". That does not, of course, mean that every new fact added to a pleading results in a new cause of action. In Meredith v Commonwealth [2009] ACTSC 168 at [23], I suggested the following as one test for whether newly pleaded facts constituted a new cause of action as follows:

If a plaintiff fails to prove to the court's satisfaction the material facts, not including prefatory averments or matters of inducement, in respect of the pleaded cause of action to the requisite satisfaction of the trial court or at least substantially as to all them, yet does prove the material facts proposed to be included in the amendment, would the plaintiff still be entitled to relief from the court? If the answer is 'no', then that is a strong indication that what is pleaded is not in the relevant sense a new cause of action. Conversely if the answer is yes it seems likely that it is a new cause of action.

28. As to the question of whether or not the cause of action arises out of the same facts or substantially the same facts, there is no bright line. The two concepts are, of course, different and Thomas J made the point in Draney v Barry [2002] 1 Qd R 145 at 164; [57] that "'substantially the same facts' should [not] be read as tantamount to the same facts".

29. The challenge is that r 503 of the Court Procedures Rules concerns amendment; logically that requires a change in the pleading and, of course, a pleading contains material facts only and not evidence or matters of law (r 406). Almost invariably, therefore, an amendment will require the introduction of a fact which, unless repetitive with what is already pleaded, will be a new fact or facts.

30. Much of the consideration in the authorities seems to proceed on the basis that the consideration of "substantially the same facts" is limited to what is already pleaded. Master Mossop has, in Naidu v Fergusson (2013) 8 ACTLR 150 at 163-4; [53]-[54] helpfully summarised the approaches as follows:

A useful overview of the authorities is given in the decision in Meredith v Commonwealth of Australia [2009] ACTSC 168 at [29]- [33]. Whether or not the test is satisfied is essentially 'a matter of impression': Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409 or a matter of 'degree and impression': Sagacious Procurement Ltd v Mayne Group Ltd [2005] NSWSC 1238 at [24] or 'a question of degree': Borsato at [17].
The tests to be applied have been variously articulated: whether '[t]he same - or substantially the same - set of facts falls to be investigated' in relation to the two claims: Brickfield Properties Ltd v Newton [1971] 1 WLR 862 at 873 per Sachs LJ, whether 'the overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action': Brickfield at 880 per Cross LJ, 'whether the overlap between the essential facts on which each cause of action depends is so great that the two causes of action can be said to arise out of substantially the same facts': Radford at [72].

31. It would be possible to survey cases in which the courts have dealt with the issue of what are "substantially the same facts" and consider how applications to amend on these grounds have been made or refused. It does not seem to me that this will be very fruitful.

32. I do note, however, that the courts have recognised that additional facts will often be pleaded. Thomas JA explained in Draney v Barry at 104; [57]

If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts. In short, this particular requirement should not be seen as a straitjacket.

(Footnotes omitted)

33. This approach was followed by Holmes J in Baker v Hallett [2004] QSC 132 at [43].

34. The Queensland Court of Appeal made clear, in Thomas v State of Queensland [2001] QCA 336 at [19], that "the story" referred to by Thomas JA was "a shorthand reference to the matters that the plaintiff has to prove".

35. This approach seems to me to be consistent with what Cross LJ said in Brickfield Properties Ltd v Newton [1971] 1 WLR 862 at 880 when referring to the provision equivalent in r 503(4) of the Court Procedures Rules as follows

It is no objection to amendment under O 20, r 5(5), that some of the facts out of which the new cause of action arises are peculiar to it and that some of the facts out of which the old cause of action arises are peculiar to it. It is enough if the overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action.

36. I add, too, that it seems that I can draw from Westpac Banking Corporation v Hughes (2011) 278 ALR 145 at 160-2; [55], [62] that it is permissible to rely on facts, with which the facts pleaded for the new cause of action are said to be substantially the same, but which are ascertained because they are facts necessarily involved or ordinarily involved in the facts pleaded and can be so inferred from them for these purposes.

37. In the context of these considerations, I turn to the actual proposed amendments that require consideration, excluding, of course, those that were not pressed or which were conceded by the plaintiff. Of those to which objection was taken, some were subject of substantial argument.

38. I shall deal with the latter proposed amendments first. When setting them out in these remarks the proposed amendments will be underlined.

39. The defendant proposed to amend paragraph 4 of the Defence by adding a new sub-paragraph (a) so that the paragraph would now read:

In relation to Paragraph 4, the Defendant says:

(a) Leda and the defendant agreed to enter a new Sub-lease to expire on 31 August 2009, or in the alternative

(b) (i) says that on 1 September 2003, ("the effective date") Giving & Living's interest in the Sub-lease was assigned to the Defendant;

(ii) says that prior to 1 September 2003, the Defendant gave notice to Leda of the assignment and Leda consented to it;

(iii) admits that on 4 November 2003, the assignment of Giving & Living's interest in the Sub-lease was registered;

(iv) says admits that Leda and the Defendant agreed to vary the existing Sub-lease so that:

the Sub-lease was due to expire on 31 August 2009, and

40. The proposed amendments to sub-paragraph 4(b) were not opposed.

41. This proposal is related to the proposed amendment to paragraph 14 of the Third Party Claim which is as follows:

(a) In the premises above Leda was obliged to give to the Defendant a disclosure statement:

(i) As required by s.30 of the Act, and

(ii) In the form of the document approved under s.157A(2) of the Act.

(b) In giving such a disclosure statement Leda would have been obliged by the terms of the approved form to have disclosed to the defendant the already planned extensive development works at 14(a) above.

Particulars

The approved form AF2003-4 s.5: "Changes or developments planned by the owner and timing of any changes or developments for:

(d) At no time was the defendant given a disclosure statement as referred to in 14(a)

This paragraph was proposed to be repeated as paragraph 16 of the Counterclaim which led to pleading in paragraph 27 that, with other allegation, there was a breach of the Act.

42. What is raised here as a new matter is a pleading that the transaction into which the plaintiff and defendant entered was not, as had originally been pleaded, the making of a new lease, but an assignment. This is, as pleaded in paragraph 14 of the Third Party Claim, a further matter of complaint.

43. The plaintiff pointed out that the transaction had always been described as the assignment of an existing base; that was pleaded in paragraph 4(b) of the Defence, the relevant documents describe the transaction as the assignment of an existing lease, the affidavit evidence and the defendant describes a director of the defendant as seeking a new lease but being denied that by the third party.

44. It was further said by the plaintiff that there were no material facts pleaded which would support the view that the document made between the parties was a new lease.

45. The defendant submitted that the language of the relevant legislation, the Act as construed by the courts (particularly by reference to Kingsley's Chicken Pty Ltd v Queensland Investment Corporation (2009) 4 ACTLR 20), meant that the characterisation of transactions for the purpose of regulation by the Act may not, for the purposes of the Act, be as straightforward as may appear.

46. The defendant submitted that the term "lease" in the Act was given an extended meaning. In particular, s 12(5) and (6) Leases (Commercial & Retail) Act provides

(5) For this section, a "lease" includes -

(a) an agreement, whether in writing or not, that provides for the occupation of premises exclusively or otherwise, whether for a fixed term, periodically or at will; and

(b) a sublease or licence.

(6) However, a "lease" does not include -

(a) an agreement relating to the common area of a shopping centre that would be included only because it provides for someone to use a part of the area; or

(b) a territory lease; or

(c) a lease of vacant land; or

(d) a right to occupy land to build on the land.

47. Two observations may be made about these provisions. Section 12(5) clearly describes a much wider concept than just a lease in ordinary legal usage.

48. In its terms, s 12(5)(a) would include a sublease or licence, despite the fact that s 12(5)(b) is included in the subsection. Further, it would not ordinarily be considered that the right described in s 12(6)(d) would be included in the meaning of a lease, so the fact that the legislature saw fit to make an express exclusion re-inforces the putative width of the definition.

49. The Act does clearly contemplate that there is a difference between an assignment of a lease and a lease. This can perhaps be best seen in s 15 of the Act which provides

Is assignment the same as entering into lease for working out application of Act?

(1) In working out whether this Act applies to a lease, a person (the assignee) is not taken to have entered into the lease only because the lease was assigned to the person.

(2) However, if this Act applied to the lease immediately before the lease was assigned, subsection (1) has the effect of ceasing the application of this Act to the lease, or to a dispute in relation to the lease, only -

(a) if this Act would not have applied to the lease if the assignee had been the original tenant; and

(b) while that assignee is the tenant.

50. What is notable is that the form of s 15(1) could be said to imply that a person could be taken to have entered into a lease if the lease is assigned to them, but not only because of that.

51. The defendant further says that, because of the alterations to the terms and conditions under which the defendant was to occupy the relevant premises, the actual transaction became the entry into a new lease by it rather than a mere assignment.

52. It seems to me that this amendment provides an opportunity for the defendant to make an argument about the legal effect of a transaction which is already pleaded and, in that sense, it has some similarity to the question of whether a particular relationship gives rise to an action in contract or negligence or both. See Macpherson & Kelley v Kevin J Prunty & Associates [1983] VicRp 53; [1983] 1 VR 573.

53. The plaintiff has suggested that the argument is not maintainable. It is not appropriate to hear full argument on the issue. In my view, there is an arguable point. It is not one that, so far as the proposed amendments to the Defence is concerned, depends on further evidence. The details of the transaction are already part of the current pleading.

54. While the plaintiff submits that no material facts are pleaded to support the allegation that the transaction was the making of a new lease, I am not persuaded that this is necessarily required in the circumstances. In any event, this can be dealt with by a requirement that the defendants, in making the amendment, include particulars of the facts on which it relies to show that the transaction is the making of a new lease. That does seem to be appropriate.

55. There is, of course, still a question of whether leave should be given to make the amendment. See Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 at 241.

56. I shall deal with that after I have dealt with the related issue of the amendment to the Counter-Claim as referred to above (at [41]).

57. That proposed amendment introduces, it is agreed, a new cause of action, based on the fact that no disclosure statement was given. It is submitted that s 30 of the Act requires a disclosure statement in the prescribed form to be given to a person entering into a lease, including a new lease, of course, but not to an assignee. This is one of the important consequences of the correct characterisation of the transaction.

58. This allegation, that there was no disclosure statement, is a new fact not so far pleaded. The question then is whether this arises out of the same or substantially the same facts.

59. The prescribed form for a disclosure statement is Approved Form AF 2003-4. It includes seven sections which require disclosure of a range of matters, not limited to the matters sent out in s 31 of the Act, but including, relevantly, the following

Changes or developments planned by the owner and timing of any changes or development for:

Floor plans are attached showing, in the case of a new shopping centre, the proposed tenancy mix for the centre, including the location of common areas and kiosks within the centre, and in the case of an existing shopping centre the existing and any proposed tenancy mix, and the location of common areas and kiosks within the precinct.

60. These are matters that are already in issue in the proceedings.

61. While the absence of a disclosure statement was not pleaded, the failure to disclose extensive planned developments in the Centre and the failure to disclose the position in relation to an adjacent retailer which was relevant to the commercial viability of the defendant's business are matters already pleaded.

62. Mr Erskine also submitted that, in the light of these allegations, the failure to plead that the matters allegedly not disclosed had been disclosed in a disclosure statement can be taken to infer that there was not one. It would have been a complete answer to the allegations. It is, nevertheless, not pleaded. In my view, this is a relevant factor in deciding whether the facts now to be pleaded are substantially the same as those presently pleaded.

63. It seems to me that there is such an overlap of facts that, while the precise failure to provide a disclosure statement is not a fact that is currently expressly pleaded, I am satisfied that the new cause of action arises out of substantially the same facts.

64. There remains, therefore, only the question of leave. Mr Meagher pointed to no specific prejudice arising in connection with this aspect of the application. That seems to me patently correct; it was, it seems, common ground that there was no disclosure statement and that issue would require little, if any, additional evidence and certainly none that would be affected by delay, such as fading memory. The legal argument would require some preparation, but I do not consider that to be a matter of prejudice, though there may be a need for particulars to which I have earlier referred to (at [54]).

65. It is clear that, when considering whether to permit an amendment, the court is not limited to considering prejudice. It was made clear by the High Court in Aon Risk Services Australia Ltd v Australian National University that what might be called "case management principles" need also to be considered. This includes the effect on the proper conduct of the proceedings, efficiently and expeditiously, as well as the effect on other litigants and the risk to the scarce resources of the court system.

66. Mr Meagher pointed to the significant delay in this matter and this does seem to have occurred. It does not seem to me, however, that I should punish a party for past delay by refusing an amendment unless I am satisfied that the delay has had a connection to the amendment, such as by evidencing a failure by the party to address and properly consider the issues in the proceedings, or that prejudicial dilatoriness has characterised the approach of that party over the efforts of the other party to proceed expeditiously. As noted below (at [74]-[75]), both parties have been guilty of delays, though perhaps the defendant somewhat more substantially. I am not so satisfied that the delay is connected to these amendments or otherwise requires leave to be refused.

67. I will permit the proposed amendments to be made.

68. A conversation with Mr T Bierne was subject of a pleading in the current Counter-Claim.

69. The defendant sought to add the following new paragraphs to the Third Party Claim:

(a) On or about 10 July 2003, Tim Beirne, on behalf of Leda, had a conversation with Brenda Hungerford on behalf of the Defendant.

(b) At the time of the conversation he knew or ought to have known that the information he provided in the conversation was part of the due diligence being done by Brenda Hungerford on behalf of the defendant prior to deciding whether to invest in the Giving & Living business.

In the court of that conversation he represented to Brenda Hungerford on behalf of the defendant that:

(a) the Hyperdome was a good location in which to have a Shop such as Giving & Living;

(b) the Giving & Living location was a good one because the entry door nearest to the Shop had the second highest foot traffic in the Hyperdome.

(c) There was nothing that the defendant should know about the Hyperdome that could impact upon the Giving & Living business.

(d) by implication arising from the previous representations, that the layout of the Hyperdome was not expected to alter during the term of the Sub-Lease in any way that Leda was then aware would affect the correctness of those representations;

...

70. There were three further existing sub-paragraphs to paragraph 12 with statements said to be made by Mr Bierne.

71. Relevantly identical amendments were proposed to paragraphs 13 and 14 of the Counter-Claim.

72. The defendant submitted that, as the conversation was already pleaded, all that the proposed amendment was doing was further particularising the conversation and its context. In effect, the submission was that what was now pleaded was not a new cause of action but more details of a currently pleaded conversation, its import and its context.

73. The plaintiff submitted, in reliance upon Meredith v Commonwealth, that the further representation in paragraph 12(c) was a new cause of action.

It seems to me that every statement by a different relevant person is a cause of action in which Mr Meredith can rely to found his claim. While there is clearly a sense in which the repetition of the same negligent advice has the capacity to reinforce the reliance that Mr Meredith would place on the advice already received, I do not consider it sufficient to render the separate occasion in this case merely as a particular of a cause of action otherwise pleaded. Accordingly I find that the amendments proposed are to include a new cause of action.

75. I am not satisfied that this means that every representation in a conversation amounts to a separate cause of action. That may depend on the circumstances, but it seems to me that this would be taking the principle too far as generally stated. There may be a number of separate representations in the one conversation, but I consider that they ordinarily constitute the one cause of action.

76. I am, therefore, not satisfied that the amendments to paragraph 12 of the Third Party Claim (and paragraph 14 of the Counter-Claim) do constitute a new cause of action. I do not consider it does.

77. The only question, then, is whether leave should be given. The principal reason suggested by Mr Meagher was the prejudice of the passage of time in relation to a conversation. As he put it, with reference to the proposed addition of paragraph 12(c):

This was a statement said to have taken place 10 years ago about a conversation, the details of which would be dim in the memory of anyone and for the first time in 2013, this assertion has been made in a pleading which is significantly higher and different from the prior assertions. The prior assertions were quite confined. You could argue or it has been argued that they mean the absence of other things that deal with this but minds might differ about that. I don't know what my mind thinks about that but this is a totally new positive assertion that's never been alleged before that finds its way into this pleading in 2013 and to say ... that's not prejudicial is to ignore human memory.

78. He further referred to the well-known comment by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 551

The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates.' [R v Lawrence [1982] AC 510 at 517, per Lord Hailsham of St Marylebone LC]. 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 [(1972) [1972] USSC 146; 407 US 514 at 532] '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.

79. The additional, often unable to be described, so-called "presumptive prejudice" is an important factor in considering matters such as this.

80. This submission was supported by a chronology prepared by the plaintiff's lawyers. In summary, the proceedings were commenced by the plaintiff on 3 March 2008. It took until 10 August 2009 for the defendant to file its original pleadings. During this time, however, an application was made to transfer the proceedings, originally commenced in the Magistrates Court, to this Court. The defendant also issued a number of Notices for Non-Party Production. The plaintiff also amended its Originating Application in this time, nearly two years exactly after it commenced the proceedings. The period, since the commencement of these proceedings and this application for leave to make the proposed amendment, on which the plaintiff relied to show delay was a period in which, in the calculation, the time taken for the plaintiff to amend its Statement of Claim appeared to be attributed inappropriately to the defendant. Further, action was taken to enforce a timetable for the pleadings on 2020 August 2008 but no further action to enforce the defendant's failure to comply with that timetable was taken until 27 July 2009.

81. Since that time, both parties have delayed. The delay of the plaintiff does not vitiate the delay by the defendant in the same way that the delay in the plaintiff enforcing the timetable does not excuse the defendant's delay. It does, however, give a picture of the nature of the attitude of the parties to the proceedings and the premium placed by them (or not) on the expedition with which they should comply. It also demonstrates the complexity of the proceedings to which Mr Erskine referred, as I noted above (at [20]). That, of course, does not excuse the delay of either party nor render any prejudice to the plaintiff irrelevant.

82. The relevant conversation, however, was first alleged in August 2009. It does refer to a conversation more than five years earlier than that date, but I assume that, in the absence of any evidence to the contrary, Mr Bierne was then or at least about then asked by the plaintiff or its lawyers about the conversation and a full description then taken of it by them. It would not be in my contemplation that the details of the conversation about which Mr Bierne was asked would have been limited to the pleaded assertions but to its full content, though the pleadings would clearly be central to the discussion with him. No evidence or submission suggested that these reasonable inferences should not be drawn.

83. I note also that the allegation in paragraph 12(d) of the Third Party Claim (and in paragraph 14(o) of the Counter-Claim) refers to the knowledge of the third party. It was fairly put by the plaintiff that what was relevant was what Mr Bierne knew; it could not be assumed that he knew all that the third party knew. This point was conceded by the defendant, which sought to have the amendment there proposed further amended by substituting "Mr Bierne" for "Leda". I consider it in that form.

84. In these circumstances, I am prepared to grant leave for the amendments to be made.

85. Amendments were proposed to paragraphs 15 to 18 of the Third Party Claim. These were as follows:

In about March 2004, Shane McCann, on behalf of Leda, represented that a retailer would soon be moving into shop 190, an empty space opposite the Defendant's shop, being the location recently vacated by Go Lo, and that would lift the Shop's turnover ("the First McCann representation").
The First McCann representation was made when he knew, or ought to have known, that:

(a) No particular retailer was then in contemplation, or

(b) Leda intended to lease the empty space to Hot Dollar 2 who would not be likely to draw any foot traffic appropriate to the Defendant's shop.

Note: (i) Where the term "Hot Dollar 1" is used, that is a reference to the business carried on in shop 190 by Longchamp Enterprises Pty Ltd trading as "Hot Dollar"

(ii) Where the term "Hot Dollar 2" is used, that is a reference to the business carried on in shop 190 by Hot Dollars Australia (Canberra) Pty Ltd ("Hot Dollar 2").

17.16A From shortly after the time when Hot Dollar 2 moved into shop 190, about mid March 2004 until about mid 2007 Bob Cooper on behalf of Leda and subsequently the Plaintiff, represented to the Brenda Hungerford that Hot Dollar 2 would be moving out of the space opposite the Defendant's shop, and would be replaced by a good new retailer ("the Cooper representation")

18.16B The Cooper representations were made when he knew, or ought to have known that Hot Dollar 2 was going to move in and that no other retailer was likely to move into that space it would not be a "good new retailer" that would be likely to draw any foot traffic appropriate to the Defendant's shop.

86. Relevantly identical amendments were proposed to paragraphs 17 to 20 of the Counter-Claim.

87. It appears that these amendments were proposed so as to make the pleadings consistent with the evidence that has been presented inter partes with the filing of affidavits. That is to say that the tenants of the various spaces were actually identified as not being in accordance with the current pleadings.

88. There were, in the pleadings, allegations of what are described as "the Cooper representation". It was, in the earlier pleading (which was that sought to be amended) in the following form.

16A From about mid March 2004 until about mid 2007 Bob Cooper on behalf of Leda and subsequently the Plaintiff, represented to the Brenda Hungerford that Hot Dollar would be moving out of the space opposite the Defendant's shop, and would be replaced by a good new retailer ("the Cooper representation").

16B The Cooper representations were made when he knew, or ought to have known that Hot Dollar was not going to move and that no other retailer was likely to move in to that space.

89. While the precise content of the allegations are changed, I do not consider the amendments to be proposing a new cause of action. There is, it seems to me, a strong element of ensuring that the pleadings reflect the evidence.

90. There is no doubt that it has long been accepted that an amendment to pleadings, even if made late in the proceedings, may be made to have regard to the evidence so as to ensure that the cause of action pleaded consistent with the actual evidence is properly disclosed. See Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666 at 668 per Stephen, Mason and Jacobs JJ.

91. I am not satisfied that the proposed amendment is the case of pleading a new cause of action. In the event I am wrong, it seems to me that it is based on substantially the same facts.

92. I have considered the question of prejudice, but, while appreciating that, as with the earlier alleged "Bierne representation", there may be some presumptive prejudice, the circumstances do not satisfy me that the leave to make the amendments should be refused.

93. Amendments were proposed to paragraph (h) of the relief sought in the Third Party Claim and in paragraph 7(a) to include a new cause of action under ss 82 and 87 of the Trade Practices Act 1974 (Cth).

94. This was but faintly argued before me by both parties.

95. There is no doubt that it is the pleading of a new cause of action. No new facts are pleaded to support it. It clearly arises, if at all, from the same facts as are already pleaded. It would be allowable on that basis.

96. As I understand it, however, the challenge to it was that, as the cause of action was barred by the Trade Practices Act itself and not by the Limitation Act 1985 (ACT), it was not amenable to the ameliorating provisions of r 503 of the Court Procedures Rules.

97. This argument has been resolved in favour of permitting such an amendment by the Full Court of the Federal Court of Australia in Western Australia v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245, a decision followed in this jurisdiction in Nectaria Nominees Pty Ltd v Commonwealth (1992) 111 FLR 459 at 461.

98. On appeal from the Federal Court, the High Court in Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 dismissed the appeal. While Deane and Toohey JJ held that the Federal Court rule, equivalent to r 503 of the Court Procedures Rules, did not permit the court to allow an amendment to introduce a new cause of action after the limitation period in the Trade Practices Act had expired, the majority held that there was "no occasion to discuss the power" and did not interfere with the decision of the Federal Court on that aspect.

99. This has been further elucidated in Harris v Western Australian Exim Corporation [1994] FCA 1065; (1994) 50 FCR 1, where Hill J analysed the position carefully and at some length (at 6-10) and upheld the power of the court to allow such an amendment under the relevant rule. His Honour's is a powerful argument that persuasively suggests that, despite the views of Deane and Toohey JJ, I should follow the Full Court of the Federal Court whose decision was not upset by the High Court and which appears to me, on the explanation outlined by Hill J, to be correct.

100. No issue of prejudice was raised on this issue.

102. The plaintiff also opposed a proposed amendment to paragraph 17 of the Defence. That amendment would add the following paragraph:

In further answer to the whole of the Further Amended Statement of Claim, the defendant says that by virtue of the matters pleaded in the Further Amended Counter Claim below, any liability (and whether for rent or Outgoings or any other liability of whatsoever kind, that the defendant had (which is not admitted) under the Sub-lease was

(a) expunged in the circumstances set out and enumerated by that pleading, and

(b) abated.

103. The argument was encapsulated in a letter from the plaintiff's lawyers to the defendant's lawyers in which it was said:

The expression 'expunged' is not familiar. There is a doctrine of abatement but it is not usually associated with fact such as these. Legal concepts such as estoppel, set-off and the like are sometimes relied on in such a case but that is not what is said. On its own the pleading is not comprehensible and we suspect adds nothing and should be deleted.

104. Little oral argument was addressed to the issue.

105. It seems to me that this paragraph of the pleading is a "catch all" of the kind that used sometimes to be seen in pleadings as follows:

Save and except for the admission herein contained this defendant denies each and every allegation in the statement of claim as if the same were specifically set out and traversed seriatim.

106. Such a pleading was discussed by Lord Denning in Warner v Sampson [1959] 1 QB 297 at 310-1. His Lordship concluded that it was no longer to be considered as embarrassing; it acted as a denial, putting the plaintiff to proof of each allegation.

107. The claim that "expunged" renders the allegation not comprehensible must be rejected. The word is an ordinary English word. In JA Simpson and ESC Werner, Oxford English Dictionary (2nd ed, 1989, Clarendon Press: Oxford) vol v at p 588 it is said that it means

Trans. To strike out, blot out, erase, omit (a name or word from a list, a phrase or passage from a book or record).

fig. To wipe out, efface, annihilate, annul, destroy, put an end to.

108. While it may amount to a somewhat literary or rhetorical flourish, it seems to me to express adequately and accurately the denial of liability that the defendant seeks to assert.

109. While accuracy and precision are desirable in pleadings and should be supported by the courts, that does not require every pleading to be prosaic nor that only jargon can be used, though the overriding concern is that the meaning is properly communicated. I consider "expunged" does so.

110. As to the use of the word "abated", it does seem to me to have a respectable history independent of the use in the special doctrine of abatement.

111. Thus, from Littleton's Tenures, we are told in Daniel Groenberg and Alexandra Mullbrook, Stroud's Judicial Dictionary of Words and Phrases (6th ed, 2000, Sweet and Maxwell: London) v 1, p 3 that

'Abate' is both an English and French word, and signifieth, in his proper sense, to diminish or take away, as here (s 475, Litt.) by his entrie he diminisheth and taketh away the freehold in law descended to the heire: and so it is said, to abate an account, signifying subtraction or withdrawing, &c., and to abate the courage of a man.

112. While there might be said to be some archaism in the use of the word in its ordinary meaning, it does not seem to me that this makes it objectionable.

114. An amendment to what was paragraph 17 but became, if other amendments were permitted, paragraph 21, was as follows:

21.(17.(a) On or about 23 March 2006, Shane McCann, on behalf of Leda, represented to the Defendant that Leda would negotiate with prospective purchasers of the Defendant's business in good faith regarding the reduction of the Shop space and continuity of rent relief, which the Defendant was then in the process of negotiating with Leda ('the Second McCann representation');

(b) The Second McCann representation was made when Leda knew or ought to have known that it was not intending to engage in those negotiations.

(c) On or about 23 March 2006, Shane McCann, on behalf of the Plaintiff represented to the Defendant that the Plaintiff would negotiate rent relief for the Defendant in the order of 50-30% ('the third McCann representation');

115. This seems to me to be in the same position as the Bierne representation, namely, that it did not add a representation but particularised an element of an already pleaded representation.

116. Accordingly, for the reasons set out above (at [68]-[82]), I shall permit the amendment.

117. The defendant sought leave to file a Reply to the plaintiff's amended answer to the amended counter-claim. One sub-paragraph (paragraph 2(b)) was not pressed. That left in paragraph 2 only a denial.

118. Unless admitted in a reply, an allegation in a defence is deemed denied and there is no need for a reply to be filed to do that. See r 480(2) of the Court Procedures Rules.

119. Nevertheless, some refinement of the issues was raised in other provisions pleaded in the reply and I shall permit the reply, without subparagraph 2(b) included, to be filed.

Tuggeranong Town Centre Pty Limited v Brenda Hungerford Pty Limited and Leda Commercial Properties Pty Limited [2014] ACTSC 197

At a glance

Court

Decision date

Before

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Judgment (222 paragraphs)

Tuggeranong Town Centre Pty Limited v Brenda Hungerford Pty Limited and Leda Commercial Properties Pty Limited [2014] ACTSC 197 (18 August 2014)

Parties

Legislation Cited (6)

Cases Cited (12)