Zimmerman v Perkiss

The entitlement to amend

1. UCPR r 19.1 provides that the plaintiff may not amend a pleading without leave: Amending a statement of claim 19.1 Amending a statement of claim (1) A plaintiff may, without leave, amend a statement of claim once within 28 days after the date on which it was filed, but, unless the court otherwise orders, may not amend it after a date has been fixed for trial. (2) If a plaintiff amends his or her statement of claim under subrule (1) after the defendant has filed a defence, the defendant may amend his or her defence at any time within 14 days after service of the amended statement of claim. (3) A plaintiff's right to make an amendment under subrule (1) is not affected by any amendment the plaintiff has made under rule 7.22.
2. Any party bringing a late application to amend faces a heavy burden. While it is not uncommon for an application to amend after proceedings have begun, applications to amend after judgment has been handed down, in terms of a request that the judgment not be entered so that the party seeking the order can amend the pleading to bring unspecified further claims, are not merely exceptional, but unheard of.
3. A key reason in the court's reluctance to permit late amendment is the need to maintain public confidence in the judicial system, as is noted in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 ("Aon") at [5]: "In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU's statement of claim should not have been allowed. The discretion of the primary judge miscarried." [Emphasis added]
4. This was further supplemented at [30]: "It might be thought a truism that "case management principles" should not supplant the objective of doing justice between the parties according to law. Accepting that proposition, J L Holdings cannot be taken as authority for the view that waste of public resources and undue delay, with the concomitant strain and uncertainty imposed on litigants, should not be taken into account in the exercise of interlocutory discretions of the kind conferred by r 502. 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, whether they be for adjournment, for amendments giving rise to adjournment, or for vacation of fixed trial dates resulting in the resetting of interlocutory processes." [Emphasis added]
5. The issue of delay and lack of finality was further stressed at [35]: It might be said that the adjournment effected by the primary judge's decision to entertain the amendment application and to allow written submissions to be filed and evidence to be put on, and the subsequent delay in his decision, rendered academic any concern about further waste of court resources or inefficiencies flowing from the amendment ultimately being allowed. It might be said that, in those circumstances, to refuse the amendment would be punitive. It is true that a punitive response to the substance of a late amendment application is not appropriate. But neither is a party to be rewarded by weighing in its favour the disruptive consequences of its own application. In any event the granting of the amendment in this case, at the time it was granted, meant that there would still be further delay while interlocutory processes flowing from the new claims were put in place. Aon had to prepare a new defence. The further delay, in the circumstances of this case, would be such as to undermine confidence in the administration of civil justice. This factor was not taken into account by the primary judge, nor by the Court of Appeal. The discretion of the primary judge miscarried and the Court of Appeal was in error in not allowing the appeal. In the circumstances, giving proper weight to the factors to which I have referred, the application for the amendment should have been refused. [Emphasis added]
6. While it is generally acknowledged that public confidence in the judicial system requires finality, this is a principle that tends to be taken for granted until an application of the kind now before the court is made.

What amendments are proposed?

1. Where an application of this nature is made, the court should expect not only a degree of forewarning but also some idea of the amendments in question. Neither of these was afforded to the court or to the defendant's legal representative.
2. Ms Hall was reluctant to be drawn as to the nature of the amendments. When I inquired if she was seeking leave to reopen her case to amend the particulars of serious harm, she indicated that this was not what was sought. What Ms Hall has in mind is the addition of other causes of action arising from the same factual matrix, although she was not prepared to say what these were. The claims would appear to be an action for misleading or deceptive conduct and/or injurious falsehood, probably (but not certainly) based on the same publications. Unfortunately, Ms Hall does not yet have instructions, because she has not been able to speak to her clients because of a family tragedy.
3. A party seeking such an order would need to have, at the very least, a proposed amended pleading. In Tarrant v Statewide Secured Investments Ltd [2011] NSWCA 248 at [17], the orders had not been properly entered and a belated application was brought two years after judgment for judgment not to be entered, so that the case could still proceed. In the course of refusing the application, Basten JA particularly noted that (as is the case here) the proposed amendments had not been reduced to an appropriate pleading: "An application for leave to appeal was filed on the last available day, namely 9 June 2011. A summary of argument filed in support of the application asserted a number of matters of fact, which, if they had been properly raised in a timely fashion, and were established, might have provided an arguable basis for a defence. However, more than two years after judgment was entered, they have never been reduced to an appropriate pleading. As explained by Garling J, if the applicant sought to rely upon a representation giving rise to an estoppel against Statewide, it would have been necessary to identify the conduct or statement relied upon with some precision, together with the basis of the reliance: [2011] NSWSC 144 at [85]-[88]. His Honour noted that no draft amended defence or affidavit had been filed: at [98]. That is still the case."
4. In addition, the reason for the application needs to be of a compelling nature, such as a denial of procedural fairness (Gregory's Transport Pty Ltd v Ray's Haulage Pty Ltd [2008] NSWCA 333), as is explained in Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd (No 2) [2007] FCAFC 41 at [6]: "6. The discretion under O 35 r 7(1) to vary or set aside a judgment before it has been entered is to be exercised sparingly. The public interest in the finality of litigation requires no less. A liberal approach would open the way to disappointed litigants to seek to re-argue cases generally on the basis that the Court failed to properly consider their submissions on the law or the facts. On the other hand, where a court has adopted a proposition of fact or law which the unsuccessful party has not had a reasonable opportunity to argue there may be a denial of procedural fairness if that party is not allowed to reopen argument for the purpose of meeting the adverse proposition: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 309 (Brennan J)."
5. In such a case, an outline of submissions and careful enunciation of the reasons are essential, as the court goes on to note at [8]-[10]: "Although O 35 r 7(1) does not specify a leave requirement the Court will ordinarily consider whether the application to vary or set aside its judgment is one which it should entertain. That first step, which may be regarded as akin to an application for leave to reopen reflects the necessary caution with which the Court will consider such an approach. In this case the Court has received full written argument on the question whether it should vary its judgment. The same process was followed by the Full Court in Li Shi Ping v Minister for Immigration, Local Government & Ethnic Affairs [1995] FCA 212. In De L v Director-General, NSW Department of Community Services (No 2) (1997) 190 CLR 207 the High Court was asked to vacate a costs order it had made against the Director-General. It was put that the Director-General had not had an opportunity to make submissions about costs. In their joint judgment the majority said (at 215): The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded "on a misapprehension as to the facts or the law", where "there is some matter calling for review" or where "the interests of justice so require". It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required "without fault on his part", ie without the attribution of neglect or default to the party seeking reopening. By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. The circumstances in which the Court will embark upon a reconsideration of its decision on an application under O 35 r 7(1) are various. But they will be exceptional. They may involve want of procedural fairness. They may involve, for reasons not attributable to the moving party, failure to consider a critical fact or a failure to consider some direct and binding authority. As appears below the present case is one in which, in effect, the appellants say they have been denied procedural fairness because the majority in the Court decided the appeal on the basis of propositions which they did not have a fair opportunity to argue."
6. Ms Hall's concern is that if these proceedings are dismissed by reason of my findings as to serious harm, this may constitute an estoppel or res judicata in relation to findings necessary for the alternate claims she proposes to plead.
7. It is difficult for me to deal with this issue because Ms Hall's reticence about the amendments makes me wonder what these really are. Are they, for example, further defamation claims based on other publications, or a fresh claim of publication to another party of the matter complained of in these proceedings? If so, the judgment in these proceedings could have an impact on the plaintiff's ability to bring such a claim in fresh proceedings, as she would require leave under s 23 of the Defamation Act 2005 (NSW). However, the bringing of such a claim now, whether I enter judgment or not, risks amounting to an abuse of process for the reasons discussed by the High Court of Australia in UBS AG v Tyne (2018) 265 CLR 77 (see also Tjiong v Tjiong: 2019/278508 [2021] NSWSC 1389). Much the same would apply if the proposed new claims are for injurious falsehood or some other similar cause of action.
8. Ms Hall submits that her client is at risk as to res judicata and/or estoppel in relation to these proposed claims unless the entry of judgment is prevented. I do not accept this submission. First, if the other claims are for causes of action other than defamation, my judgment consists of a finding of no serious harm, which is not an element in causes of action other than defamation. Second, if the other causes of action are defamation, the plaintiff already faces the risk of abuse of process by reason of not having raised these at the same time, particularly if they raise the same imputations.

Mr O'Connor's submission

1. Mr Connor did not agree with Ms Hall's assertion that the court grants adjournments and stays "every day of the week", or accept that all she was seeking was a seven-day adjournment (although she was prepared to reduce this period if necessary) so that she could seek instructions about leave to amend.
2. Leave to amend is required under UCPR r 19.1. Mr O'Connor submitted that the court would not, either on the scanty grounds before the court now or after full argument, exercise the discretion necessary to grant leave. As to the application to stay the entry of judgment on JusticeLink, his client had expended considerable sums in terms of legal costs and was entitled to finality. What the plaintiff was seeking was not simply a short adjournment but the entitlement to commence a long procedure of applications to amend, argument, hearings, appeals and the like. He added that he was in a difficult position in responding to the application further as he (like the Court) had received no earlier notification of this application. It is unclear why he was not notified beforehand, but the most likely explanation is that, if the plaintiff had succeeded on serious harm, the application would not have been made.

Conclusions concerning the exercise of discretion

1. Stays following the entry of judgment are relatively common and there is generally no difficulty in accommodating parties seeking short adjournments to enable them to seek instructions about a wide-ranging matters such as appeals and costs issues. There may also be circumstances where entry of judgment is deferred until proceedings against other parties such as cross-defendants have been determined, particularly where there is a settlement between two of multiple parties: Latham v North Sydney Municipal Council & Anor [2004] NSWSC 93.
2. However, a direction that the order for judgment not be entered at all, followed by some kind of further pleading and evidence, would render that judgment a nullity. There would have to be compelling reasons for such a step to be taken. No such reasons are before the court.
3. Given the vagueness about the nature of the amendments, their extreme lateness and the need for finality in litigation, I am not prepared to exercise my discretion to defer entry of judgment. The application is dismissed with costs.

Order: 1. Plaintiff's oral application to stay the entry of the orders made in Zimmerman v Perkiss [2022] NSWDC 448 on JusticeLink refused with costs. 2. The orders in this application, as well as in Zimmerman v Perkiss [2022] NSWDC 448, are to be entered on JusticeLink forthwith.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 October 2022