Sydneyean Air Pty Ltd v Vortex Air Pty Ltd & Anor [2022] NSWDC 339

District Court New South Wales

Medium Neutral Citation: Sydneyean Air Pty Ltd v Vortex Air Pty Ltd & Anor [2022] NSWDC 339 Hearing dates: 15 August 2022 Date of orders: 16 August 2022 Decision date: 16 August 2022 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraph 49 Catchwords: CIVIL PROCEDURE – application to amend Defence – discretionary considerations Legislation Cited: Civil Procedure Act 2005 (NSW) ss 57, 58, 59, 60 64 Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Category: Procedural rulings Parties: Vortex Air Pty Ltd (first applicant) C Tucker (second applicant) Sydneyean Air Pty Ltd (respondent) Representation: Counsel: Mr Bateman for the applicants Mr McEnaney for the respondent

Solicitors: Eastern Bridge for the applicants Johnsons Law Group for the respondent File Number(s): 2021/00110956 Publication restriction: Nil

REASONS FOR JUDGMENT

BACKGROUND 1. The plaintiff, the respondent on the application (Sydneyean) operates registered aircraft and hires aircraft to third parties. The first defendant (Vortex) is an air charter operator. The second defendant (Mr Tucker) is the director of Vortex. He is sued as guarantor for Vortex' obligations. I will refer to the defendants collectively as the applicants, unless the context requires otherwise.

The existing state of the pleadings 1. The respondent commenced this proceeding on 21 April 2021 against the applicants. It was partly in the nature of a money claim, constituted by unpaid invoices relating to the first applicant's use of aircraft in October and November 2019, respectively under a hire agreement entered in May 2019. It was also partly constituted by a claim for damages for breach of contract after the respondent alleged that Vortex purported to terminate the contract in November 2019. Insofar as the money claim is concerned, and making allowance for Vortex' payment of a small sum (nearly $13,000), the respondent claimed that the total sum of unpaid invoices, comprising the debt claim, is $115,494.88, incl of GST. 2. The applicants filed a Defence on 21 May 2012, in which they disputed liability. Aside from putting the respondent to proof, the applicants raised other matters as part of an affirmative defence. Relevantly, at paragraph 18 of the Defence, in traverse of the allegation in the statement of claim that the first applicant purported to terminate the contract, the applicants contended that the agreement with the respondent had nominated a third party (whose name was abbreviated to VAM, in argument) as a maintenance organisation to carry out servicing and maintenance of the aircraft. VAM is an entity related to Vortex. It was contended that the respondent was obliged to maintain an insurance policy with Vortex nominated as the operator. The applicants contended that it had obligations under the contract, to the respondent, to render the aircraft serviceable if the aircraft was not serviceable. It alleged that, as at November 2019, the respondent had failed to pay VAM maintenance costs amounting to $82,369.21. It was alleged further that the respondent took certain steps with a view to removing Vortex as the Air Operations Certificate (AOC) holder on the respondent's insurance policy with respect to the aircraft. The applicants alleged that by taking those steps, the respondent repudiated the contract, or purported to terminate the contract, since Vortex had been removed as the Air Operations Certificate (AOC) holder on the insurance policy. The aircraft could not be flown without maintenance. Vortex alleged that from November 2019 to June 2020, the respondent was able to return the aircraft to serviceability and collect the aircraft, but it did not so. 3. On 18 August 2021, nearly a year ago to the present day, the respondent filed a Reply. A material part of the Reply, for present purposes, is paragraph 5, which comprised multiple sub-paragraphs. In particular, at sub-paragraph 5(m)(i), the respondent alleged that it was Vortex that organised VAM to perform the maintenance (Vortex being the registered operator of the aircraft). The respondent alleged that in November 2019, Vortex made written representation that it would clear VAM's invoices, after the 100-hourly service was performed and would pay the balance owing to Sydneyean for the unpaid invoices. 4. This alleged representation was the starting point to an action Sydneyean brought against Vortex in its Reply, and against the second defendant (as someone involved in Vortex' contravention) under the Australian Consumer Law for misleading or deceptive conduct. It was said Sydneyean relied upon the representation to refrain from paying any monies to VAM and when VAM responded, by refusing to perform the maintenance up to release of the aircraft in March 2020, it was not safe to operate. This, it was said, forced Sydneyean to arrange for a different entity to complete the work so as to ensure that the aircraft was in a safe condition, by late August 2020. Sydneyean claims, as part of its loss, which was alleged to have been caused by Vortex' misleading conduct, the sum of $85,703.99, which VAM was claiming from the respondent. 5. The hearing of this proceeding was fixed to commence within the 3-week sitting of civil matters at Parramatta, which sittings commenced yesterday. 6. On 8 August 2022, the applicants filed a motion in which they sought leave to amend their Defence, pursuant to s 64 of the Civil Procedure Act 2005 (NSW) (the CP Act). Essentially, the applicants wish to run, as defences, the debt claims against the respondent, as set-offs, in statute and in equity, to extinguish or reduce any liability they have to the respondent for unpaid invoices. 7. The respondent opposes the application. Because of the urgency of an imminent hearing in these sittings, a prompt decision is required with concise reasons. 8. On the application, the applicants relied upon affidavits of Mr Tucker dated and 8 August 2022, as well as one dated 28 July 2022. The respondent initially objected to the admissibility of the latter affidavit to the amendment application – it was expected to be relied upon for the substantive hearing - but ultimately I did not understand the respondent to resist its use at least for the purposes of determining the present interlocutory application. 9. A Joint Court Book had been prepared by the plaintiff, apparently with the defendant's co-operation. This was for the purposes of the hearing. Nevertheless, Counsel for the applicants referred the Court to certain parts of the Court Book on the application. I indicated to Counsel that he could do so, but should not assume that the Court would take any notice of parts of the 460 pages of the Court book unless the parties had expressly referred to it in argument. 10. The respondent did not rely upon evidence in opposition to the application. 11. Neither party supplied the Court with written submissions ahead of the hearing. Instead, both parties' relied upon the oral arguments of their legal representatives.